New Apple Devices

I love it when competition is allowed to work. While the Zune is arguable a flop it had an affect on Apple. Steve Job's announced new iPods yesterday and you can watch the keynote. If you don't have two hours read on.

State of iTunes

The first thing is the state of iTunes. iTunes is what makes Apple so successful with the iPod. Other companies came out with MP3 players but Apple was the first to treat the whole experience as the product. And boy has it paid off.

• Distributed over 600 million copies of iTunes
• #1 on-line retailer in the 22 countries where it is available
• Catalog has grown from 250,000 to 6 million songs
• 6 billion songs sold
• 95,000,000 million videos sold
• #3 music retailer in the US. Apple even beat Amazon in the music space.

And this next statistic I agree with Steve. OMG - 32% of music releases in the US in 2006 were digital only - NO CDs!

iTunes newest feature is for the iPhone, duh! You will be allow to take certain songs you have bought from iTunes and turn it into a ring tone. 1/2 million songs are available to turn in to a ring tone. The cost is 99 cents for the song which you keep or have already bought from iTunes. Then an addition 99 cents it is turned into a ring tone. Total cost $1.98 vs $2.50 or more at competitors. You can then assign the ring tone to various callers. Ring tones will be turned on next week and you will need the latest version just released.

iPod

The iPod product line has been refreshed and expanded. Across the entire line they have upgraded the software. And for iPods with a screen you get Video, Cover Flow, and games. In addition, the Now Playing screen will include cover art etc.

First the Shuffle is getting a new colors including a Red Shuffle that some of the proceeds go to fight AIDS in Africa.

The Nano is their most popular iPod. It is much smaller and shorter. The screen is 320x240 and 204 pixels per inch! 24 hours of audio playback and 5 hours of video playback on the battery. It will ship with 3 games. It is available in 5 colors including a Red one. The memory has been doubled to 4 gig and 8 gig versions. It should be available by the weekend.

Next is the original iPod now renamed to iPod Classic. It has the software enhancements of the Nano. They are much thinner and all metal case. Battery life for the 80 gig version is 30 hours of audio and 5 hours of video. The 160 gig version battery life is 40 hours of audio and 7 hours of video.

But wait there is more, how about an iPhone without the phone! The iPod Touch is 8 mm thick. It literally is an iPhone without the cellphone stack. It also includes a standard iPod connector. There is a 16 gig iPod Touch and 8 gig iPod Touch. It plays audio, video and photos. It even does WiFi and includes the Safari browser and YouTube. The battery life is 22 hours of audio and 5 hours of video. It is being released world wide in 17 languages including Japanese, Chinese, Russian, Polish, Spanish, and French to name a few.

iTunes  Wireless

Steve Jobs then introduce yet one more thing. A wireless version of iTunes. You will be able to download music and videos wirelessly. You can preview music and video free wirelessly. When you buy something the next time you dock it, the new content will sync up with your PC. It will be available in the 22 countries that iTunes operators. There will even be an iPhone update to incorporate in the wireless iTunes.

Starbucks?

Finally Starbucks and Apple have teamed up in the wireless iTunes. When you are on a Starbucks WiFi an additional button appears. This button will let you see what is playing currently and see the last 10 songs that the store has played. You can also immediately buy the songs right then while in the line for coffee.

Apple gets a huge audience. Starbucks has over 14,000 in 42 countries, 5800 are WiFi enabled. Starbucks serves  50 million customers a week. They are the most visited retailer with average customer visiting 18 times a month. They are opening 7 stores a day. Starbucks works hard to create a unique experience for coffee drinkers. Starbucks also is into music and has produced several albums and has even won Grammy awards! They also get hot spots all over for free access via iTouch and iPhone.

So what does Starbucks get out of the deal. Starbucks hopes to get additional traffic. But more specifically it will help with answering the number one question customers have for employees. What song is that playing in the store? Wireless iTunes will answer that question. In addition, they will get some revenue if the customer buys the song.

The roll out will start in NY and Seattle in October 2007. San Francisco will be the last area in 2007 to be enabled due to the holiday season. That will cover around one thousand stores. The rest of the major metropolitan areas will be completed by end of 2008. The rest of the stores will be complete by 2009.

iPhone

iPhone sales are strong. They should be able to sell their millionth iPhone by the end of September. The 8gig byte model outsells the 4gig so much that the 4gig will be discounted. Finally to accelerate adoption the price has been cut from $599 to $399! I will only say that you cut prices to expand demand, support flagging sales, or move inventory to make way for a new product. I suspect that it is about expanding sales but not in the US. I think the price was too high for overseas. So as they introduce the phone in other markets a price cut was needed. It also shows how much profit was built into the phone. Only time will tell if the iPhone does for the cellphone market what the iPod did for the MP3 player market.