iPod Price History: Will Apple Fight Or Lose?

I’ve been contemplating next week’s iPod announcement from Apple and wondering what that new iPod nano is going to cost. This is of great personal interest to me because I need a new MP3 player.

I came across an interesting article that compares iPod prices based on a per-gigabyte storage basis. While that’s helpful, what’s distressing to realize is that the basic price point hasn’t changed much. The price of entry dropped in dollar terms from $400-$500 to $300-$400. Sure, you get a hell of a lot more for that money, but the actual price of admission is still rather serious for a large iPod.

SanDisk is pricing their new Sansa Clip at $40 for 1GB and $60 for 2GB. To compare, the current iPod Shuffle is $80 for 1GB — and it lacks many of the features of Sansa’s Clip — such as a screen! — which will sell for half the price! The current iPod nano runs $149 for 2GB, $199 for 4GB, and a whopping $250 for 8GB.

Look at that: a 2GB Sansa Clip with more hardware features than a 2GB iPod nano — the prices are $60 versus $150!

The final paragraph of that iPod price history article is very prescient:

I predict Apple has at least 3 years (but up to 5 at the most) in which they can enjoy a de-facto monopoly in this space. After 5 years the price for components will have dropped to the point where almost anyone can, and will, compete with the iPod.

It looks like that day has arrived!

The question I have about next week: Is Apple going to fight to maintain its iPod supremacy by really cutting the nano’s price — or will it continue to stand alone and demand a premium price which now seems very exorbitant, snobbish, and nearly insulting?

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