Apparently trying to secure a Jackass of the Week nomination from Daring Fireball, Ary Daquiwag of Stock Market Opinion & Analysis site SeekingAlpha says the introduction of the iPhone might trigger a billion dollar loss for Apple because it will eat away at the sales of all existing iPod models.
What is going to happen to iPod sales (i.e., iPod Nano, video and the micromini version)? These Apple products will probably become irrelevant to a big chunk of Apple’s target iPhone market upon its release.
If Apple’s target iPhone market is the same as its target micromini iPod market, then I guess there might be a problem. But getting beyond the fact that Daquiwag doesn’t know the name of the iPod shuffle, he doesn’t seem to understand the differences between the devices. The regular iPod with video capabilities has 30-80GB storage capacity compared to the iPhone’s 4-8GB. Are those who need tens of gigabytes of space really going to find the iPhone capacious enough? As for the Nano, the small size of the device itself is a major draw and the iPhone is much larger (it’s pretty easy to tell, since the iPhone publicity photo includes a hand). The biggest disparity exists between the Shuffle and the iPhone. Does Daquiwag truly believe that those who like jogging or exercising with the Shuffle will find the iPhone a suitable replacement?
But the worst part may be the advice to Apple to solve this impending crisis: make the iPhone more expensive than iPods.
Apple could take the path of letting the iPhone be a high end product by making its price high and letting the iPods become a cheaper option.
Wow, Apple could make the price of the iPhone high and the price of its iPods cheaper! Can you imagine such a world?! Let’s see, how about the price of the iPhone being $499-$599 and the price of the iPods $79-$249. (Note to SeekingAlpha: that’s what they currently are…)
That’s not enough, you say? You want more ridiculous advice? How about this:
Or Apple could just go for the easy way out by selling all the necessary rights and production facilities of its iPods and focusing more on the production and promotions of its iPhone and its other products, which are not direct competitors of the iPhone.
Right… the “easy way out.” Well, you heard him Apple, better start selling those Chinese production facilities and let someone else make iPods.
The iPhone Effect: What Will Happen to Apple’s Other Products?
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