APPLE INTRODUCES $149 NANO, LOWERS PRICE OF SHUFFLE

Move May Attract Younger Buyers, Parents

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YORK, Pa. (AdAge.com) -- Apple opened the door to widespread iPod ownership today, moving even further down the price scale by introducing a Nano priced less than $150 and slashing prices on its existing iPod Shuffle.
The new 1 gigabyte Nano holds up to 240 songs or 150 photos and retails for $149
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The new Nano has a color screen, comes in black or white, and at 1 gigabyte can hold up to 240 songs or 150 photos. The 1GB Nano retails for $149 vs. its larger 2GB and 4GB siblings at $199 and $249, respectively.

Shift in accessibility
The less expensive iPods could appeal to younger consumers -- and their parents -- who may have been stymied for funds or reasons for a $200 (or more) player may be better able to make the case at the lower prices.

“Now everyone can afford an iPod Nano,” Greg Joswiak, Apple VP-worldwide iPod product marketing, said in a statement.

Analyst Rob Enderle of Enderle Group said, “A sub-$150 price makes the Nano much more palatable to consumers, and they’ll definitely get a lot more buyers at that price. And because Apple is now touching a lot more consumers at retail and online, it gives them a real opportunity to upsell. … For just a little bit more money, you can get this or that, and then for just a little bit more, and so on and so on.”

The lowered Shuffle price marks the first time Apple has cut prices on an existing iPod hardware device, signaling -- at least on this product -- a willingness to make deals to move the product. Analysts guessed the company would initially lose money on the cheaper Shuffles but probably counts on making up the difference in volume.

An even younger demo
“IPods have always been cool for teens, but even that market is getting saturated. This shows that they’re really trying to deal with, and attract, that even younger demographic,” Mr. Enderle said.

And of course, every iPod owner is a potential iTunes Music Store customer. To that end, Apple also added its first premium cable content from Showtime today, including the highly rated series “Sleeper Cell” and “Weeds.”

Apple iTunes also kicked off a promotional countdown to 1 billion songs sold on iTunes with giveaways of a 4GB black Nano and $100 gift certificate. The billion download winner will get a 20-inch iMac, 10 60GB iPods, a $10,000 iTunes music card, and the creation of a full four-year scholarship bearing the winner’s name to a “world-renowned” music school of Apple’s choosing.

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