David Richards and Wire ServicesThe power of the Apple marketing machine is hurting companies like Sony, Samsung and Creative more than any breakthrough product innovation. And what’s even more galling for the company is that it’s all free publicity that is driving millions in sales.
What Apple has perfected is how to create a media frenzy and this is no more evident than the release last night of what has turned out to be two or three simple product innovations.
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All Apple had to do was book a conference venue the size of Darling Harbour. Send out invitations claiming that “The Beat Goes On” and the rest was pure Apple academic as the tech, business and mass media went ga ga hyping up the event to the point that one would believe something earth shattering was about to happen. What they got prior to the event was front pages of mass market newspages and web sites, segments on TV shows prior to the event and thousands of gullable US media turning up for the event to drool on everything that Apple CEO Steve Jobs uttered.
But all Apple did was unveil new versions of its best-selling iPod media player with touch screens and video games, giving Apple new gadgets to entice buyers during the peak pre Xmas shopping season.
The company will add a new iPod Shuffle and a smaller iPod Nano, Steve Jobs Apple’s Chief Executive, 52, said today at an event billed as “The Beat Goes On” in San Francisco. The new Nano, available in five colours, will play games such as a Sudoko program developed by Electronic Arts.
The company has also built on the success of its iPhone which is set to be released in Australia next year by introducing an iPod with the same touch- screen technology. The new iPod Touch has the same 3.5-inch display as the iPhone, built into a thinner package, and can connect to a wireless network. Like the iPhone, it can play videos from Google’s YouTube service.
Jobs typically releases new iPods to spur orders in the last three months of the year. The iPod, along with sales of songs and videos through the company’s iTunes store, accounted for more than a third of revenue last quarter. Aside from the iPhone, which combines the media player and a mobile phone, Apple hadn’t updated the iPod in almost a year.
“This is an incredible iPod line-up for the holiday season,” said Jobs, who wore his trademark black turtleneck and jeans.
Apple also said it would update its iTunes software. Customers will now be able to buy ring tones for 99 cents and add them to their iPhones. Computer users have downloaded more than 600 million copies of iTunes, Jobs said.
IPod Classic
The company also updated its video player, renaming the device iPod Classic.
“Over the up coming months, the iPod and accessories can contribute as much as half of their revenue or more,” said Shaw Wu, an analyst with American Technology Research in San Francisco. He rates Apple shares “buy” and doesn’t own them. “New models are important because the iPod is such a material part of their business over the holidays.”
Apple’s introduction of the clip-on iPod Shuffle in October helped drive iPod shipments to a record 21.1 million units during the 2006 holiday season.
At 8 millimeters thick, the touchscreen iPod is thinner than the iPhone but has a similar set of controls that allow consumers to use the heat of their fingers to flip through songs or albums to choose what to play. It comes with built-in Wi-Fi wireless capability that could be used to download music.
The iPod touchscreen also adds a Safari Web browser connection that allows users to connect to the Internet. Google and Yahoo search services, plus YouTube videos, are built in to the Web browser. Versions of the new iPod Touch run $299 and $399 for 8-gigabyte and 16-gigabytes respectively.
“We think it’s one of the seven wonders of the world,” Jobs enthused at a news conference on Wednesday in San Francisco. “If you have used an iPhone you will feel very much at home.”
Apple’s shares fell $1.49, or 1 percent, to $142.67 at 1:44 p.m. New York time in Nasdaq Stock Market trading. Before today, shares of the Cupertino, California-based company had increased 70 percent.
Apple has sold more than 100 million iPods since their debut in 2001. It’s the best-selling digital media player in the U.S., with about a 70 percent share of the market, according research Company the NPD Group. ITunes is the most popular site for legal music downloads, NPD said.