Apple CEO Steve Jobs introduced the first iPod on 23 October 2001. He announced it as a Mac-compatible product with a 5 GB hard drive that put “1,000 songs in your pocket.” The software bundled with the first generation iPod was Macintosh-only, so Windows users had to use third-party software like ephPod or XPlay to manage their music.
It is quite funny to read the Cnet article by Ina Fried about this event and all the reactions of the experts:
IDC analyst Bryan Ma said Apple may take some heat for entering the consumer electronics market, which typically has lower profit margins than Apple gets from its computers. But, he added, the iPod could serve an important function: convincing people to buy a Mac instead of a PC.
“It’s another incentive for them that can convince people to buy a Mac,” Ma said.
The iPod does cost considerably more than the nearest competitor with a portable hard drive–the $249 6GB Nomad Jukebox from Creative Labs. But Ma said the iPod has significant advantages in terms of its size, battery life and anti-skip protection.
“They’ve totally polished…the product,” Ma said of Apple. “If I were an engineer at Creative Labs, I’d be scrambling.”
Technology Business Research analyst Tim Deal dinged the $399 price as “a little high.” But he noted that the iPod’s FireWire connectivity allows for faster song downloading than USB. The iPod also sports “a significant battery life and a fast recharge speed,” he said.
Deal also praised that fact that the iPod fits into Apple’s digital hub strategy. “However, I question the company’s ability to sell into a tight consumer market right now at the iPod’s current price.”
The iPod is another stab at Sony’s success in the consumer market, Deal noted.
“Clearly Apple is following Sony’s lead by integrating consumer electronics devices into its marketing strategy, but Apple lacks the richness of Sony’s product offering. And introducing new consumer products right now is risky, especially if they cannot be priced attractively,” Deal said.
Stephen Baker, an analyst at NPD Intelect, said that the iPod will likely stand out for its large storage capacity but predicted that the device may have trouble digging out a niche in the market.
The most expensive MP3 players that use flash memory sell for around $249 right now, with the average player selling for less. Many are also adding features for playing mini-CDs. Sonicblue’s Rio 600, for instance, sells for $199. It comes with 64MB of flash memory for storage. Apple’s new device has far more storage–enough for 50 hours of music–but it costs twice as much.
The iPod has “good features, but this is a pretty competitive category,” Baker said. “The question is whether people want that robust of a feature set with that high of a price.”