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Apple’s iPod Player Cool, But Pricey

Apple’s iPod digital music player definitely has a high enough “cool factor” to be a hit, but the device’s $399 price tag might take a bite out of its sales potential, industry insiders said.

Retailers and analysts were impressed with the iPod’s industrial design and expect the player to attract the Apple faithful. However, the iPod is entering an extremely competitive and changing field.

“The iPod seems to be the type of product that Apple does very well,” said NPD Intelect analyst Steve Baker. “However, I think the category they have targeted is the wrong one for them. Prices are falling, there is significant competition and the trend in these products is to add multiple storage to allow listening from a variety of removable storage options and not limit customers to one way to listen.”

Geoff Westerfield, merchandising VP for the Mac-specialty chain ComputerWare By Elite Computers, said there is some rumbling in the market over the $399 price tag, though the iPod does fit in well with Apple’s strategy of making the Mac the focal point of a home’s entertainment system.

“I think sales will be strong at first regardless, but the price point may keep the product from sustaining a high rate of sales,” he said.

The cellphone-size iPod uses an internal 5GB hard drive to store up to 1,000 songs and connects and can download an entire CD through a Firewire port in less than 10 seconds. The lithium battery can play for 10 hours on one charge and the device is equipped with a small, backlit LCD. The iPod, which will only work in conjunction with a Macintosh computer using its iTunes music software, hit stores on Nov. 10 with a $399 suggested retail price.

The iPod can play back MP3, MP3 VBR, AIFF and WAV formats and it can act as a portable storage device allowing users to store non-music data on the hard drive which can be downloaded onto a Mac through the iPod’s docking station.