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New Apple iPods priced for profit, not market share

Posted on Monday, September 18 2006 @ 19:42:38 CEST by

Playlistmag writes the new Apple iPod players are priced for better profit margins, not gaining market share.
Appleā€™s recent introduction of several new iPods shows the company is looking for better profit margins, not gaining market share, according to researcher Gartner. And the move could boost its rivals.

The top sign Apple is going for the green is its lack of aggressive pricing, according to Gartner analysts Joseph Unsworth and Jon Erensen in a Monday report. The second-generation iPod Shuffle, for example, could have been priced closer to US$49 to stimulate demand from users, since the cost of materials going into it amounts to only $30, the analysts said. Instead, the shuffle is priced at $79.

The company could have also priced the new 8GB product lower than $249, since its materials only cost $130, Gartner said, the same with its 4GB, which at $199 is far higher than the $90 worth of materials inside, and the 2GB version, which is $149 and is made from materials costing only $70.
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