Flash Gordon

Speculation has been running rampant that Apple is on the verge of releasing a “flash-memory-based” iPod. This isn’t just rumor-site thumb-sucking — media outlets as mainstream as the Associated Press have picked up the story.

I’ve been skeptical of these rumors ever since they surfaced. Not because I think it’s flat-out unlikely that Apple would use flash memory for an iPod, but rather because none of the rumors even attempt to address the key issue: What is the intended appeal of these supposed flash-based iPods?

The problem is that all of this speculation hinges on the idea of product categories that don’t really exist. The idea is that there exist two categories of portable digital music player: hard-drive-based and flash-memory-based. And that since the iPod utterly dominates the hard-drive-based category, it makes sense that Apple will start producing flash-based iPods so they can dominate that category too.

E.g. this report from AppleInsider:

Despite comments from Apple chief executive Steve Jobs that flash-based digital music players are often received as gifts, rarely used, and “end up in a drawer,” market share figures speak for themselves. Although the iPod holds a whopping 92% slice of the pie for hard drive-based players, this figure shrinks to 65% when flash models are tallied as part of the mix.

Sales of flash players remain strong in the second half of 2004 and account for a larger percentage of digital music players than that of hard-drive music players when surveyed on a global basis. The introduction of an Apple-branded flash player is expected to increase Apple’s share of players in the far east, where the adoption rate for the iPod has been feeble.

(Arithmetical parenthetical: Similar numbers are tossed out by nearly everyone promoting this rumor, and, at first glance, they don’t add up. If Apple has 65 percent total market share, and every existing iPod is hard-drive-based — then how could flash-memory players “account for a larger percentage of digital music players than that of hard-drive players when surveyed on a global basis”? The key is the phrase “global basis” — the other numbers (92 percent hard-drive market share, 65 percent total market share) are specific to iPod sales in the U.S. The iPod’s world-wide market share doesn’t seem to be available.)

The problem with this logic is that “hard-drive players” and “flash-memory players” aren’t actually product categories. Storage mechanisms are implementation details, not features. I’d wager that the vast majority of iPod owners have no idea whether there’s a hard drive in their iPod.

There are differences between hard-drive and flash-memory players. Hard-drive players tend to have much higher storage capacities, but are heavier, larger, and more expensive. Flash-memory players tend to be lighter, smaller, and cheaper.

This is why when Steve Jobs introduced the iPod Mini, he claimed that it was positioned against the high-end of the flash-memory player market. Even though it uses a hard drive for storage, it’s as small and light as flash-based players, but offers 4 GB of storage capacity.

(Pedantic note: House style here at Daring Fireball is to capitalize the second words in “iPod Mini” and “iPod Photo”, on the basis that they’re proper names, despite the fact that Apple’s marketing style is to use lowercase.)

The main reason flash-memory players still hold 35% of the U.S. market and a majority share of the world-wide market is because they’re cheaper. Some of them are a lot cheaper: Amazon sells a bunch of 64, 128, and 256 MB flash-memory players that cost under $100, some priced as low as $50.

No one goes shopping for a music player and decides against an iPod because they want a “flash-memory player”. Many, however, decide they want a cheap music player, in which case they’re going to end up with a flash-memory player (at least in the current market).

Flash memory, in and of itself, is not a feature. Size, weight, and price — those are features. And so if Apple is planning to introduce a new iPod based on flash memory, it will be to achieve some specific purpose.

iPod Cheapy

The most obvious purpose would be to produce something that’s cheaper — to expand the iPod’s market share into the lower-end of the market. But how much cheaper? AppleInsider’s report claims:

The iPod flash will retail for below (US)$200 and sport a similar user interface to the company’s ubiquitous iPod and iPod Mini.

BusinessWeek Online columnist Alex Salkever draws the same $200 line in the sand:

The new flash Pod’s price will significantly undercut existing iPods and dip well below the $200 mark. That could bring in millions of new users who remain skittish at the higher prices on iPods and other hard-disk music players.

But “under $200” doesn’t seem like much of a shake-up. The iPod Mini has been priced at $249 since its debut last winter; it strikes me as quite possible that Apple will eventually cut the price of the 4 GB Mini to $199 (and perhaps introduce larger-capacity Minis at the $249 or $299 price points).

The iPod’s hook is that it offers a superior experience. Not just in the store, but long term. People love their iPods, and that word-of-mouth popularity is as big a part of the iPod’s explosive success as anything else.

Generous storage capacity is a major factor in the iPod experience. The idea that Apple would produce an iPod with only, say, 256 MB of storage strikes me as incredibly unlikely. Such a move would almost certainly generate a short-term spike in unit sales — but at the expense of the iPod brand. 256 MB just isn’t enough storage. Once you start talking about 512 MB or 1 GB of flash-memory storage, you’re looking at prices that bump up against the existing iPod Mini.

The idea that Apple can just slap the iPod brand on a low-capacity, low-cost player and “make it work” is backwards. The iPod isn’t popular because it’s cool — it’s cool because it’s so well-designed.

I do think Apple will move toward the lower-end of the market — but it seems more likely to me that this will happen with lower-priced hard drives than with lower-storage-capacity flash memory.

Demand for lower-cost iPods exists. But, duh, demand for lower-cost everything exists. Perhaps you’d like to see a $15,000 BMW 3-series model, but you’re not going to get one.

iPod Tiny

If not purely based on price, another reason I can think of for Apple to use flash memory would be to make an even smaller iPod.

But how much smaller than the Mini could it get? In addition to the iPod’s generous storage capacity, the other primary factors that define the iPod experience are its larger screen (compared to most other music players), scrollwheel input, and intuitive on-screen interface.

Thinner and lighter, I suppose, are possible. But in terms of height and width, I don’t see how much smaller an iPod could get than the Mini, without an entirely different interface. It’s possible that that’s the hook — something even smaller than the Mini sporting some sort of revolutionary interface. But I can’t imagine the screen getting any smaller than the Mini’s — even with its smaller Espy Sans system font, the Mini only displays five lines at a time in scrolling lists, compared to six lines on regular iPods and seven on the iPod Photo.

Apple could replace the clickwheel with something smaller — but such a hypothetical input device would need to offer roughly equivalent usability to a clickwheel (which I suspect isn’t even possible) or else result in a total footprint so dramatically smaller that the trade-off would be worthwhile.

Recall last year, when rumor-mill speculation surrounding the then-upcoming iPod Mini included price points in the $150 range. When the iPod Mini was unveiled at $250, the chorus cried out that $250 was too high for a “lower-cost” iPod. But the Mini wasn’t intended as a lower-cost iPod, it was intended as a smaller iPod.

The name “Mini”, one would think, was a bit of clue. Which of course leads to this: if Apple intends to produce iPods even smaller than the Mini, what will they call them? iPod Tiny? Its name suggests that the Mini already is Apple’s smaller-sized model. And it strikes me as unlikely that Apple would re-use the “Mini” name for a flash-memory model with significantly less storage capacity. As stated previously, it seems much more likely and a better idea to lower the price of the existing hard-drive-based Mini than to compromise on storage with 512 MB or 1 GB flash-based Minis.

iPod Sport

One other difference between flash-memory and hard-drive based players is that because it’s a solid state technology (i.e. no moving parts), flash-memory players are skip resistant and less prone to break if dropped. Thus, a flash-memory iPod might conceivably be targeted as a workout companion. Lower weight would also be a plus in this market. But if this is the case, I see even less reason to expect that such models would cost less than existing models.

What About SigmaTel?

The one sourced bit of actual information backing up the flash-memory iPod rumor is attributable to the Wall Street analyst Jason Pflaum, who issued a much-publicized report in October stating that semiconductor manufacturer SigmaTel had been contracted to produce flash-memory music player chipsets for Apple. SigmaTel already produces such chipsets for companies such as Creative and Rio.

From an interview with Brad Gibson at The Mac Observer:

[…] Mr. Pflaum cited various sources in Asia for his continued confidence that Apple will release a flash-based player.

“I recently spent two weeks in Asia meeting with a number of folks who are in a position to know details of SigmaTel’s supply chain,” he said in an exclusive interview with TMO. “Based on our industry contacts, we are confident that one, Apple is planning to launch a flash-based player, and two, SigmaTel is the provider of controller chip for that device.

This is certainly specific enough to lend credence to the rumor — as opposed to most other analysts projecting a flash-based iPod, who do so based purely on conjecture and the idea that since people are buying “flash-memory” players, Apple should make one.

But the clock is already ticking on Pflaum’s claims:

Mr. Pflaum believes the product is already in production and will be released by Apple for the Christmas buying season.

“It’s a very tight supply chain, but I think this product from Apple will come out by the end of the year,” he said. “That could obviously change, but we’re pretty confident this will happen and you’ll see product on the shelves in December.”

Somehow I doubt Apple plans to release a new iPod model in the middle of the holiday shopping season — a more likely near-future debut would be Macworld Expo in the second week of January.

Summary

The point of this is to emphasize that “flash-memory-based”, in and of itself, is not a feature. If Apple is making an iPod significantly smaller than even the Mini, it might not be particularly cheap. And if they’re making a cheaper iPod with significantly lower storage capacity, they’re risking the iPod’s hard-earned reputation as a terrific gadget. Apple has never indicated that they intend to corner the entire market for MP3 players — just the market for good ones.

No matter what the case, if there is a flash memory iPod in the pipeline, the fact that it uses flash memory is the least interesting part of the story.

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