Mac news from outside the reality distortion field
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February 19, 2008, 11:03 am

Apple revamps entry-level iPod line; drops Shuffle price to $49

ipod-shuffle.jpgTaking advantage of rapidly falling memory prices — and offering customers the lowest entry point in the iPod’s six year history — Apple (AAPL) today slashed the price of the 1GB iPod Shuffle from $79 to $49.

The 37.9% price cut is even steeper than the $200 (33%) cut in iPhone prices that Apple announced last September.

The company also announced today that a new, 2GB Shuffle will be available later this month for $69.

“At just $49, the iPod shuffle is the most affordable iPod ever,” said Apple VP Greg Joswiak in a press release issued this morning. “The new 2GB model lets music lovers bring even more songs everywhere they go in the impossibly small iPod shuffle.”

AppleInsider notes that the price cut comes amid analysts’ reports that blamed the lack of a refresh in the Shuffle line before the holidays for recent softness in iPod demand. It quotes Citigroup analyst Rich Gardner:

While virtually 100 percent of the unit shortfall was in the low-end iPod Shuffle, allowing Apple to beat consensus iPod revenue despite the unit shortfall. We believe the unit shortfall reflected the lack of a compelling update to the Shuffle product last Fall; the Shuffle simply was not the compelling ’stocking stuffer’ this year that it was last year. (link)

For more on this, see Analysts: Effect of iPod shuffle price cut is a wash

“Apple makes what they have work in tandem and work together well. Analyst and critics have been screaming that the Apple line is doomed, yet here we are”

But there is always people that say…

“I have much more flexibility in my products and am happy for it. The hip image associated with owning Apple’s Ipod doesn’t outweight the inferiority of their products. When people outgrow the status symbol of their products(apple), and look at functionality there product will crash bad.”

I say a big LOL to that. I use Apple because their stuff works really well and their products all work together really well also. My in laws were always on me to help them with their windows computer because it was always messed up, crashing or not working at all. I told them to get a Mac and now they don’t bug me anymore.

No functionality? What do you use your computer for JR. I have a business so I need a calendar that keeps track of all of my gigs and iCal does great. I need a address book that keeps all of my contacts. I need email. I use the web. I have a nice camera and iPhoto works really well for me. I make movies with my video camera and use iMovie and iDVD to make DVDs, I listen to music in iTunes. I use Pages to make my invoices. All of those Apple programs work with each other in a way windows people can only dream about. Besides aren’t they canning Vista and starting over because everybody hates it?

What’s even better is that when I purchased my iPhone and plugged it in I didn’t have to do squat. It put everything in for me without me having to do anything but tell it what I wanted on the iPhone. IP#s and all that crap. It knew it already. My bookmarks from Safari on my computer? It did it for me. Contacts? Done. Calendar? Done. I couldn’t get anything to work on my Treo 650.

I know you were mostly talking about mp3 players JR, but you lumped all Apple products into your speech.

Functionality? Are you kidding me? People buy Apple stuff because it’s eye candy? Are you sure you have ever owned a Mac because it doesn’t sound like it to me.

Posted By Nodack Phoenix, AZ : February 21, 2008 12:15 am

1 GB of memory holds about 35 hours @ 64 kbps or about 7 hours in “lossless” 320 kbps format.

Posted By Richard, Roslindale, MA : February 20, 2008 8:49 pm

Chris,

Then don’t short them, your choice; Apple to me has evolved into an gadget intensive company that places the MOST restrictions on it’s equipment; from their proprietary Itunes to their Iphone. I moved away from Apple about two years ago, and am glad I did. I have much more flexibility in my products and am happy for it. The hip image associated with owning Apple’s Ipod doesn’t outweight the inferiority of their products. When people outgrow the status symbol of their products(apple), and look at functionality there product will crash bad. Look back on history and there are dozens of similar outcomes. Going into a flat economy in the next few years will curtail permium expenses as folks will be looking for more value out of their products and not eye candy.

Posted By JR,Alhambra, CA : February 20, 2008 1:13 pm

JR,

How can you make the claim that we should short Apple? There have been MP3 players that preceded the iPod and had much more functionality than the iPod. That being said, look at their position in the marketplace now. If they were the better player or if they had the better music service then I could see your point.Steve Jobs said he is not adding FM radio and the ability to record voices,etc. He wants to make a good MP3 player and do it well.There are other companies that make what you speak of,if that’s the case buy their product and leave Apple on the shelf. Apple makes what they have work in tandem and work together well. Analyst and critics have been screaming that the Apple line is doomed, yet here we are.

Posted By Chris West Baltimore MD : February 19, 2008 8:46 pm

Great words XamaX, could not have said it better myself. They can take all the negative comments and stick them where the sun doesn’t shine, real close to their brains. Lets sit back and watch Apple make $billions!!!

Posted By Mike, Cleveland Ohio : February 19, 2008 6:06 pm

Here in the EU we have 15 days to return any product, some companies - like french FNAC - will take it no questions asked.

If you don’t get to do it, blame it on the government or God, anything other than taking responsability for your actions. At least, that’s what Philip will expect of you so that he can write a nice article bashing Apple for lowering prices. But he would anyway, if not for loering prices, for not lowering prices. It really doesn’t matter as long as he bashes Apple. And then Fortune calls it skepticism. It was funny to read the update for his last piece, he ended up bashing Apple over a lie produced by someone that doesn’t even sign up his name and nobody knows. Not to mention how unprofessional and immature. Anything goes. As long as Apple is bashed.

I’m sure Philip invests in the stock market along with that other dimwitt kramer, they play the news/article game to lower the stock, buy shares then praise it to get them higher etc. Nice.

Posted By XamaX, Lisboa, Portugal : February 19, 2008 3:03 pm

Brad, buy a new one from same store and return it with your receipt from last week and get your money ($79) back.

Posted By Steve, Charlotte NC : February 19, 2008 2:53 pm

What apple is failing to realize is that people want a low end player that can receive FM transmissions and has more features, as found on a small LCD/LED screen. The ability to change equalizer settings, shuffle/straight play, switch to radio record are all features not found on the apple and found on other players. Couple that with Itunes and it’s very rigid proprietary structure will spell ultimate doom for the apple line. The competition has caught up in funtionality, not in aesthetics…they are very close.

Time to short apple.

Posted By JR,Alhambra, CA : February 19, 2008 2:51 pm

why should they? Is the same thing as in the iPhone’s sudden price drop, which I still question because early adopters pay more for being early. Tough break on your purchase, but business is business.

Posted By Josh, NY, NY : February 19, 2008 2:40 pm

i would just bring your receipt back to where you bought it from and state you want to be credited…most stores have a 30 day policy on pricing…i did that with a phone at verizon we just got for my girlfriend.

Posted By chris b. bayville nj : February 19, 2008 2:38 pm

get arefund and buy it again it’s easier

Posted By dan miami fl : February 19, 2008 2:35 pm

Brad,

I had the same thing happen to me a few years back on a Shuffle and Apple did right by me.

Check out this link:
http://www.apple.com/legal/sales_policies/retail_us.html

There you go.

Posted By Nate S., Minneapolis, MN : February 19, 2008 2:05 pm

Why do people think they deserve rebates when companies lower prices on thier products? If people, in a free market with no pressure outside their own desire to won an iPod shuffle, want to spend $79 one week and think that is a good value for them, then they should just be happy with their purchase. Chaulk it up to a lost opportunity. I must say that no company should have to or be compelled to offer refunds to early purchasers when they decide to lower prices. Isn’t this the same as someone complaining that they missed last weeks sales but they should force the store to continue the sale anyway? Take responsibility for your own decision to purchase the iPod (you thought it was a good value last week), and just enjoy it.

Posted By Mike, West Simsbury CT : February 19, 2008 2:03 pm

How many songs does 1GB hold

Posted By John N. Lincoln Park, NJ : February 19, 2008 1:56 pm

All sales typically have a 14-30 day money back guarantee. You should be able to get the refund by going to the store. If the store doesn’t honor the refund and you did pay by credit card, you can always dispute it through your credit card company. However, I would be surprised if you have to go that route.

Posted By Sid Rastogi, St. Louis, MO : February 19, 2008 1:56 pm

I hope not.

Posted By Anonymous : February 19, 2008 1:53 pm

Does anyone know if they will be giving credits if you recently purchase a shuffle? I just bought the 1GB shuffle last week.

Posted By Brad Olsen Washington, DC : February 19, 2008 1:12 pm
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Philip Elmer-DeWittSilicon Valley veterans like to joke that Steve Jobs must be surrounded by a reality distortion field; if you get too close to him, you start to believe what he's saying. Thanks to the success of the iPod, the launch of the iPhone and the renewed interest in the Mac, Apple has made believers out of millions of customers - and made a lot of investors rich. But Philip Elmer-DeWitt believes that an ounce of skepticism never hurts when writing about the company. He should know. He's been covering Apple - and watching Steve Jobs operate - since 1982, first for Time Magazine, then for Business 2.0, and now for Fortune.
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