Sources Reveal Insight into Future iPod Lineup

      Apple CFO Peter Oppenheimer offered a rare glimpse into Cupertino’s product development roadmap during his company’s Q3 conference call in mid 2007 by referring to an ongoing “product transition”. Evidence is mounting that the iPod roadmap is what he specifically had in mind. According to my sources close to the iPod product division, Apple may reveal no less than 5 models this Fall in an effort to facilitate the iPod transition to the touch platform, only to consolidate iPods into the traditional 3-tier lineup a year later. It seems that the problems Apple is facing centers around the saturating iPod market penetration in the US and lower consumer confidence due to the looming prospects of a major economic slowdown. Apple is concerned that the sharper than expected fall in the sales of digital media players during the fourth calendar quarter of 2007 could spell the same for its iPods resulting in significantly lower revenues from the profitable unit. Apple is expected to counter these problems by introducing new lower end models based on the touch platform, hence enticing new buyers and necessitating an upgrade for the existing iPod user base. What follows is a description of iPod’s future based on tips provided by my sources reflecting the roadmap as of late January ‘08.

     My sources tell me that the 1GB Shuffle will be discontinued once the current inventory runs out. A razor thin profit margin due to the recent price cut is apparently the culprit. The 2GB version will appear in the Fall ‘08 lineup but no major redesign is expected. A new 2 and 4GB iPod model featuring a screen and a smaller profile than current nanos will be introduced. Nanos will sport the same design plus the usual yearly feature improvements and a new 16GB model is expected, alongside the existing 8GB unit. The exciting news for the nano, however, is a new generation of Click-Wheel Apple is working on which offers improved usability comparable to the jump from third to fourth generation models. The nano is expected to be discontinued in 2009 paving the way for a similarly sized touch based model, although both nano and its replacement may be offered side by side in order to gain traction for the newer model ( similar to Classic and Touch last year ). The 80GB Classic will be discontinued and the 160GB model will get the ax in ‘09. A Touch 64GB model will appear this Fall along with the existing 32GB version. I was also told the sharply lower demand for flash chips so far this year and the consequential drop in their lot prices will mean more iPod price cuts are on the way and it may facilitate Apple’s plan to introduce higher capacity flash models earlier than expected. Stay tuned as I’ll have more details on specific models a little later.

D.S.

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