Apple Computer Inc. on Wednesday introduced new versions of its hugely popular digital music player, including an iPod mini that can store more songs, and it cut the price of the current iPod mini model in a bid to boost its share of the market.
Apple now has a range of iPods addressing the full spectrum of the digital music player market, from its $99 iPod Shuffle player to its $449 iPod photo model with a color screen.
Cupertino, Calif.-based Apple unveiled a new “iPod mini” that holds 6 gigabytes of music -- or about 1,500 songs -- and will sell for about $250, while it cut the price of its 4 gigabyte or 1,000-song model, introduced about one year ago, to about $200.
The company said the 4 gigabyte model’s $200 price, down from its previous price of about $250, will appeal more broadly to consumers. The new mini also has improved battery life of up to 18 hours, the company said.
Some analysts have expressed concern that with an increasing percentage of total sales coming from iPod sales, it could hurt Apple’s profit margins because the iPods are less profitable than its signature Macintosh computers.
But others have said overall margins should remain steady, helped by declining component costs. In Apple’s most recent quarter, sales of the iPod, songs from its iTunes online music store and iPod accessories accounted for 40 percent of total sales.
“We believe Apple should maintain approximately 20 percent (gross margins) on (4 gigabyte) Minis as it rides the component cost curve,” wrote Banc of America Securities analyst Keith Bachman in a note to clients.
Apple also introduced an “iPod photo” model with 30 gigabytes of memory at around $350, and offered an add-on that allows users to transfer pictures from a digital camera directly into the music player, which has a color screen.
Apple is the No. 1 seller of portable digital music players -- often called MP3 players -- that allow users to carry thousands of songs on a device smaller than a wallet. According to Banc of America Securities, Apple’s share of the MP3 player market rose to 40.2 percent in the December quarter, up from 37.5 percent in the September quarter.
While Apple doubled its market share in the last year to about 60 percent from about 30 percent, according to market research firm NPD Group, the market is becoming ever more crowded and competitive, an Apple executive said.
“The market continues to get more competitive,” Phil Schiller, Apple’s head of worldwide marketing, said in a telephone interview. “Everybody’s playing in this space and we’re just working really hard to stay ahead.”
Apple also debuted an iPod Camera Connector, to sell for about $30, that transfers digital photographs from a camera to the iPod.
The iPod works with Apple’s iTunes software, which is available on both Macintosh and Windows personal computers, and is designed to work only with its iTunes online music store, which is the No. 1 online music store.
On the Macintosh platform, iTunes is also part of its iLife software, which lets users edit and create movies, store and edit photos, make music and other functions.
“We’re in a digital age now and that requires software,” said Greg Joswiak, head of Apple hardware product marketing.