You’re Not One of Those Agitators, Are You?

Wednesday, 7 January 2004

Remember that scene in The Graduate, where the guy approaches Benjamin (Dustin Hoffman) with the key to the future?

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Well, I’ve got two words for you. Just two.

iPod Mini.

If you want to take a contrary-to-popular-opinion position that has a good chance of paying off down the road, tell people you think the iPod Minis are going to sell just fine.

An awful lot of people seem to think otherwise, including normally sensible guys like Todd Dominey and Macworld’s Christopher Breen. The near-consensus is that the Mini is simply too expensive.

Dominey writes:

Just when it looked like Apple might hit the ball out of the park and take over the portable mp3 player market, today they unveiled the iPod mini — a smaller, less expensive version of the regular iPod.

Smaller? Less expensive? Sounds great, right? Yes, unless you have more than an elementary school proficiency in basic arithmetic. The iPod mini retails for $249 — a mere $50 less than the entry level iPod. What does $50 off buy you? A hard drive that is nearly four times smaller (4 GB instead of 15 GB), which translates into 2700 less songs for you to listen to.

Where I think he goes wrong is at the very start. The iPod Mini is not about being a new low-end model — it’s a new small-end model. It was the rumor sites that planted this idea that the iPod Mini would be both smaller and cheaper. E.g., Think Secret’s report that prices would start at $100.

But this made no sense whatsoever. Making smaller gadgets requires better engineering and more expensive components. 37signals’ Jason Fried makes this point exquisitely:

Miniaturization requires more R&D and greater engineering precision. Apple has basically managed to re-issue the original 5 GB iPod, but shrink it down considerably (in all dimensions), keep the battery life around 8 hours (I know the original was 10, but 8 is plenty close for a much smaller unit), house it in a new durable aluminum case, provide color options, make it Firewire and USB 2 friendly (including charging via USB), make the same unit Mac and PC friendly, and price it lower than the original 5 GB iPod. To me that’s quite an achievement. And, when you look at the other competitors in the market, you’ll see that it’s priced right on target.

And it is priced right. Check out the Rio Cali, which sells for $149 and holds only 128 MB. Or, even more apt, the new Rio Nitrus, just announced yesterday, which holds 4 GB and costs exactly $249.

Everyone wants to focus on the $50 price difference between the iPod Mini and the 15 GB iPod. I agree that the $50 price difference between the Mini and 15 GB iPods is negligible. That’s exactly the point. Take it a step further and imagine if Apple cut another $50 off the price and sold the 15 GB iPod for the same $249 as the Mini. I say, even then, there would still be people who would choose the Mini. For roughly the same price, you get to choose between a significantly smaller footprint and 11 extra GB. If hard disk capacity were the only factor that mattered, we’d all be using brick-sized players from Creative Labs.

I’ve also seen it argued that the Mini isn’t even that much smaller than the standard iPods. But when you’re talking about pocket-sized objects, a few fractions of an inch in each dimension can add up to a big difference in volume. The iPod Mini weighs 33 percent less (104 vs. 158 grams) and takes up 41 percent less space (3.6 vs. 6.1 cubic inches).

I’m not arguing that the Mini’s success is a sure thing. I don’t think it’s too expensive, but it’s close. An awful lot of astute designers like Dominey think it’s going to bomb. Breen compares it to the ill-fated G4 Cube:

I’m withholding final judgment until I hold one in my hand, but at first blush, the iPod mini hints that much of Apple was on lunch break when the “Power Mac G4 Cube: Lessons Learned” memo circulated.

And in the interests of full disclosure, I should admit that I thought the Cube was going to be a successful product line. But the big difference here is that I’m convinced that the iPod Mini was designed based on more than just a Jobsian hunch. I think Apple has determined that there are a lot of people who think the regular iPods are too big and too heavy.