The Apple Announcements today

Today Apple announced a series of changes in their Phone and iPod product lines. From my perspective the best new announcement was the new Nano.

A lot of the blogs are grumping about the $200 reduction in price on the iPhone. My response? So what. It will help to get more product out into the market and the elimination of the 4 gig model is confirming the market. Most buyers simply did not want the smaller model. I've had the product for two months and would expect to pay a premium for what I consider to be the best phone I have ever had. I keep finding new things about the product after the two months I've had it. I bought David Pogue's book and as usual he does a pretty good methodical job of explaining things you can do with it. The company looks on track to hit 1 million phones by October 1. That is outselling the LG Chocolate phone. The announcement also includes a 99¢ ringtone based on music that you download. That sounds like a pretty good deal. You need a new version of iTunes which should be available by tomorrow on the iTunes site. But what about the other product announcements?

Jobs' announcement also included some numbers - music - 32% of the music released in 2006 was released only in digital form. That suggests a longer term trend which Apple continues to ride. The cross marketing with Starbucks (which was another annoucement) is an interesting feature but without a full integration with the Hot Spots that T-Mobile offers - there is only limited utility. I have kept my Hot Spots account with T-Mobile which I find to be very useful when I am traveling. If I were the big labels I would be worried - the trends are against their business model. Hooray.

The new iPods are a mixed bag. They've sold 110 million units from the first generation model (which was a 5 GIG one) - which is about four years of sales. The biggest new product is the iTouch. What is now called the Classic iPod is an incremental step forward. The largest(classic) model is now twice the capacity for about the same price (that would hold all of my music and the 11,000 photos on my hard disk. 160 gigs is a pretty huge device. But for people that have the 80 gig model I am not sure that is an easy buy. The new Nano (some people have called this the Fatboy) is wonderful and a fundamental redesign from the last Nano models - you might look at this as a third new offering. I think it may be the most important "new" product. It looks like the ideal personal video viewer. The screen is a 2" (or about .5' less) with a 320X240 screen. The pricepoint for the larger model is $199.

The iTouch is basically an iPhone without the phone. It comes in a 16 gigabyte model. In comparison to the Nano for $200 more you get double the capacity and a larger screen. You also get WIFI for the iTouch - which is an addition. I am not sure, with an iPhone already, that I am likely to buy an iTouch. The addition to the iPod product line is the WIFI, but that is already present on the iPhone. The screen is the same as the iPhone. Put another way the iTouch plus $100 gets you an phone. There should be a market here and compared to the non-selling Zune - it is a better product. In May, the Zune, after being out for six months, had just under a million sales.

One would expect that the next generation of iPhones will be offered with the 16 GIG capacity and (hopefully) 3G wireless. My expectation is that the new model will come to market in Q1 of 2008. The best line of the day was the artist (KT Tunstall) who ended the show - who said "Steve Jobs is actually making it more fun to pay for it than to steal it."