Apple to begin manufacturing flash-based iPod next month

[James Fee]

<div class='os_post_top_link'><a href='http://www.appleinsider.com/article.php?id=744' target='_blank'>http://www.appleinsider.com/article.php?id=744</a><br /><br /></div><i>"According to contacts in Asia, the computer company will build a stock-pile of approximately 2 million flash iPods before the product begins shipping world-wide in late-January or early February. The new players are slated to be announced at the annual Macworld trade show in San Francisco during the second week of January. Though precise specifications were not readily available, the flash iPod will reportedly use controller chips from Austin, TX-based SigmaTel, and feature a storage capacity in the range of 256 Megabytes to 1 Gigabyte. Sources were unable to confirm if the player would be released in more than one configuration. The iPod flash will retail for below (US)$200 and sport a similar user interface to the company's ubiquitous iPod and iPod mini. Despite comments from Apple chief executive Steve Jobs that flash-based digital music players are often received as gifts, rarely used, and "end up in a drawer," market share figures speak for themselves. Although the iPod holds a whopping 92% slice of the pie for hard drive-based players, this figure shrinks to 65% when flash models are tallied as part of the mix."</i><br /><br />I guess lock them into iTunes at a lower pricepoint and keep them from buying music on Napster or MSN Music... Seems like a step back to me, but then again, I've never owned a flash based player.

[Kent Pribbernow]

I've been saying Apple needed to do this for a long time. As great as the iPod is, the reality is that a relatively smaller percentage of the consumer market can afford such luxury items. If Apple wants to sell its iTunes Music Store and make it ubiquitous, it needs low cost media players in order to sell the service. And that means $199 or less hardware...preferably $99. Without that, iTunes doesn't stand a chance against Microsoft's "Plays for sure" Windows Media platform.

It's also interesting to note such a product would mark the third time in recent years that Steve Jobs went back on his word regarding Apple product strategies. First it was his proclamation that the CRT was dead at the launch of the G4 iMac, when just weeks later he introduced the CRT-based eMac. His second was the more recent fumble with the G5 iMac which features a vertical I/O drive enclosure that Jobs originally said was an inferior design. And now we have Flash memory-based MP3 players that Jobs again said nobody used and those that were purchased ultimately ended up collecting dust in desk drawers. Well, Steve...will your new digital audio player end up collecting dust as well? Hmm? :roll:

[Jason Dunn]

Very interesting...this will certainly expand the reach of Apple and make them even more dangerous in this market. 8O