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Apple releases new iPods while cutting prices

By MAY WONG
The Associated Press

SAN JOSE, Calif., Feb. 23 -- Apple Computer Inc. released new versions of its popular iPod digital music player Wednesday, cutting prices and expanding memory capacities.

Gabriel Lewenstein, left, and his brother Ari,10, pose for a photograph with iPod minis outside the Apple Store in Palo Alto, Calif. on Wednesday, Feb. 23, 2005. Apple unveiled the second generation iPod mini lineup Wednesday with a new 4GB model priced at $199 and a new 6GB model priced at $249.(AP Photo/Marcio Jose Sanchez)

Along with bringing out the 6GB Mini, which costs $249, Apple lowered the price of its 4GB Mini to $199. The 4GB Mini had debuted in January 2004 at $249.

The battery life of the second-generation mini models has also been improved. The playback time on a single charge is now 18 hours, up from 8 hours of previous models.

The 60-gigabyte "iPod photo," first introduced in October, which can display photos on its small color screen or when connected to a TV set, was cut from $599 to $449. The 30GB iPod Photo costs $349 and replaces a 40-gigabyte version which previously sold for $499.

Apple also said it expects to start selling a cable that allows the transfer of photos straight from a digital camera to an iPod photo, eliminating the need for a computer. The iPod Camera Connector is expected to be available in late March for $29.

Apple officials said a free software update will be available so owners of older iPod photo models can also use the Camera Connector.

The iPod has helped boost Apple's fortunes and remains the top-selling portable music player despite increased competition. The slim and colorful line of minis, first introduced in January 2004, played a key role last year in doubling Apple's share in the portable music player market from 30 percent to 60 percent, said Greg Joswiak, Apple's vice president of hardware product marketing.

In all, more than 10 million iPods have been sold since its debut in October 2001. The portable devices work with both Macintosh and Windows-based PCs.

"We've done very well, but we're not resting on our laurels," Joswiak said. "And we're going to continue to be very aggressive in this market."

The new models expand the range of Apple's popular hard drive-based music players and increase the product line's capabilities in digital photography. A $29 camera adapter for the iPod Photo answers the call for connecting the player directly to cameras without the need for a computer as a go-between.

The sharp price cut to the iPod Photo line moves the color screen from a premium feature to something that's practically standard--showing up on all but the lowest-end $299 iPod model. Apple Vice President Greg Joswiak said in an interview that he expects many iPod buyers will pay $50 more to get a device with a 50 percent larger hard drive and color screen.

"I have little doubt this will be a very popular model," said Joswiak, who heads iPod product marketing. "Just like you saw with PDAs and cell phones, everything gets better in color."

Apple has been on a low-price tear recently in an effort to reach more consumers. In January, it introduced the flash-based iPod Shuffle, which starts at $99, along with a Mac Mini desktop PC designed to appeal to bargain hunters.

Apple's iPod line has already achieved totemic status in American pop culture and is the clear market leader among portable music players. Moreover, the music player segment overall is enjoying healthy growth. A recent study revealed that 22 million adults in the United States, or 11 percent of the population, own an iPod or other MP3 player.

Apple is clearly out to build on its success, said one analyst.

"If you combine (the $199 iPod Mini) with the Shuffle, it really says Apple is shooting for the moon here," The NPD Group analyst Steve Baker said. The company is "really going after getting as much of this market as it can."

Apple shares rose $2.58, or 3 percent, to $87.87 in afternoon trading Wednesday on the Nasdaq Stock Market.

Story Produced by: Doug Bell

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