Cutting Off the Oxygen of iPod Rivals

That doesn't mean today's price cuts on the shuffle aren't big news. Indeed, they are very big news indeed, if you're in the unenviable position of having to compete with Apple in MP3 players.

Apple announced a 1-gig iPod nano today, for just $149, as well as price cuts that bring the price of the iPod shuffle's to just $69 and $99. Now, that's pricing "for the rest of us."

Now, I tend to agree with the folks at Engadget that this nano could be a huge seller. I think most people who really care about capacity--that want to carry all or most of their music with them at all times--aren't going to be happy with any of the nanos as their one and only iPod. But on the other hand, there's a huge audience for people who aren't such gigabyte hogs. And I think a huge swatch of those folks will gravitate to this $150 model.

And what about the more-affordable-than-ever shuffle? I doubt it's going to be generating many headlines for its vast sales--mostly because that doesn't seem to be Apple's intention. The poor old shuffle hardly gets any attention from Apple's marketing mavens.

But that doesn't mean today's price cuts on the shuffle aren't big news. Indeed, they are very big news indeed, if you're in the unenviable position of having to compete with Apple in MP3 players. Think back just a few years, when Apple was the new kid on the block with the laughably high prices (remember "Idiots Priced Our Devices"?). Not anymore. Now, it's using its huge volumes and distribution might like any good old-fashioned (near) monopolist: to put an economic squeeze on competitors that dare compete with it.

Just consider poor Dell? Just yesterday, it was reported that it has quietly killed its line of DJ hard-drive-equipped players. Instead, Dell will focus only on selling its flash-based Dell Ditty, which offers 512 MB for $99. That compares to a 512-MB iPod shuffle for just $69. Uh-oh.

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