Apple Updates iPod Line – Planet Rejoices


Actually, these updates are very well thought out and the timing is impeccable.  Refreshing the colors on the unchanged Shuffle line is a good plan for the product that is clearly a fashion item.  The new Nano line seems to be a great improvement in functionality and I think the new shape will be a hit once people get used to it.  The ‘iPod Classic’ has nice bumps in storage and battery life, and the ‘iPod Touch’ is a new product that should sell like hotcakes this year.

People who already have a cellphone that they like or who can’t use the iPhone because of contract/coverage/business requirements but would like the non-phone features can get one with tons of storage and still have the wifi browsing experience.  Very very cool.

Dropping the 4gb iPhone and lowering the price on the 8gb model are great examples of what sets the Apple of 2007 apart from the company in the past.  They’re not afraid to admit that they misjudged a market condition and modify their strategy to achieve a long term business goal.  This is a significant change from past company policy and should be recognized and applauded by investors.  Curiously to me, there was a selloff this afternoon and the analysis I’ve read is that it reflects fears that senior management was sacrificing too much profit.  I think that the analysts are missing the point which is that Apple has just sucked all the oxygen out of the room for any competing music player and any competing ‘smartphone’ product.

The aggressive improvements in capacity and feature set should keep the iPod line flying off the shelves, and the price drop on the iPhone should lead to a huge increase in sales.  More iPhones in the hands of consumers will cement the leadership role of the company heading into the spring quarter.  The new wifi downloads and Starbucks cross promotion will lead to increases in incremental revenue and even more visibility.  For the iPhone, it’s a game of market share right now.  Apple is taking a short term reduction in profit to ensure the long term strength of the line.  I think they’ve made the right call.

In the interests of fairness, I will disclose that I have a significant position in Apple stock that I ain’t parting with anytime soon.


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