February 26, 2004
The more I think about it, the more the economics of the iPod mini don't make sense to me. Besides the fact you can get an extra 11 gigs for only $50 more, the rest of the mini picture seems crazy.
Even if Apple was purchasing the MicroDrives from Hitachi for $50, they're not recouping the cost of the player after the costs of the remaining hardware, advertising and packaging are included. If they ARE getting them for $50 then how is Hitatchi justifying the $480 MicroDrive retail price? Add this to the fact that the iTunes Music Store is a loss leader. What's the strategy here? They can't be converting enough windows users to make up the loss with G5 sales.
It seems so 90s... heavily hype a money losing service to gain marketshare. Lose tons on the hardware you're selling to support the service. They just need to figure out how to get free shipping in the equation and they'll have the dot-com trifecta. Can someone explain to me how this works? Even if they are making money on the mini- the margin has to be paper thin (90s again: "well make it up on volume").
well... you know what, i thought the same thing. i bought an iPod mini to try to take the disk out of it for my camera... but i am in love with this thing. i have a 40GB iPod and i almost want to ditch it for the mini. the small form factor and industrial design warrant the price. it is beautiful.
wow, you knock it; yet you buy it. sign of a true technophile!
solely for educational purposes. If the MicroDrive extraction works then it's a huge score, if not, it's headed to ebay.
-hudson
start putting together the auction template... it's not going to work... 99% certain at this point.
apple is definitely making money on these things. the cost of goods is probably less than $150 for a mini, based on EE times' estimate of $150 cost-of-goods for the 30GB 3rd gen ipod. yes they are probably getting the 4GB microdrive for $50 or less. the difference between the hitachi retail price and this price is not so tough to understand; apple had moved 1.2 million iPods up to October 2003. apple probably comitted to 500,000 microdrives; hitachi can probably make money on that many drives at $50 each. apple will probably easily sell 1 million iPod minis this year.