• Ad Age, Thursday, February 9, 2006 11:46 AM

The marketing juggernaut that is iPod has taken yet another giant step forward with a new product that is expected to appeal to music lovers on a tight budget. iPod parent Apple has introduced a new Nano for less than $150, and is also cutting prices on its iPod Shuffle model. 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. It retails for $149 vs. its larger 2GB and 4GB siblings at $199 and $249, respectively. "Now everyone can afford an iPod Nano," said Greg Joswiak, Apple vice president-worldwide iPod product marketing. The move was hailed by industry observers. "A sub-$150 price makes the Nano much more palatable to consumers, and they'll definitely get a lot more buyers at that price," said analyst Rob Enderle of Enderle Group. "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." Regarding the Shuffle price cut, it marks the first time Apple has cut prices on an existing iPod hardware device. Analysts guessed the company would initially lose money on the cheaper Shuffles, but probably counts on making up the difference in volume.

Read the whole story at Ad Age »