Last Wednesday, Apple made several announcement regarding their iPod line of products. The announcement ran from new Shuffle colors, all the way to the iPod Touch. At the end of the event, Steve Jobs (Apple’s CEO) made a surprise announcement. He dropped the price of the 8GB iPhone which had been sitting at $599 since its launch, to $399. That is a two hundred dollar price drop for those that are like me and bad at math. This incredibly strategic move by Apple shows why they are an industry leader and remain so when it comes the mp3 player market.
The reason that Apple stays the leader in the mp3 player market is because first and foremost, they put a huge emphasis on the product rather than on features. Apple does not try to see how many features they can cram into their portable music player, instead they make a great product that is so easy that even grandmothers can use it with ease and feel hip. Sure over the years Apple has added features to their iPod line, but the focus has always been on making sure it “just works” first. The iPod for example, started out as just simply a music player, eventually becoming something that occasionally plays videos as well. The evolution came slowly, taking four years to get from just a music player to a full fledged multimedia device that could play music, movies, and display photos. The iPod Nano is in a similar boat, taking exactly 2 years to go from music only to finally getting video last week.
However, the main function of the iPod has not changed since its inception. It is still probably the best mp3 player on the market today. It still plays music just as good as the day the first generation hit the Apple Store shelves. Apple does not have to worry about beating anyone but itself and they can take all the time in the world to do so. While they continue to attempt and push the bar on their devices (see the iPod Touch), they keep in mind what the device needs to do and ensure that it handles that task well.
So why is the $200 price drop the key? Why is that so important? Easy, it shows they are willing to take the loss when they know they have the product. But it is more than that. By lowering the price point on the hottest selling iPhone (not to mention phone in general), you make it that much more accessible to the general market. People like their cool phones, and the iPhone is most definitely the “it” phone right now. Lowering the price on the hottest model is a sure fire way to ensure it stays a hot seller through the upcoming holiday season not to mention get an early boost in sales prior to that season.
Apple really continues to innovate how people interact with their media. The iPhone and iPod Touch are just two of the more recent examples of this behavior. With moves like this, I really am curious as to what they are going to do next.