The missing piece appears?

[mmcirvin]

To recap, the rumors of low-cost mini-iPods don't make any sense unless Apple can find some radically lower-cost manufacturer of tiny hard drives with capacities of a few gigabytes.

Today, a company called Cornice announced a 2GB mini-drive (excuse me, "Storage Element") for a per-unit cost of $70 in gigantic quantities. I don't know if you could make money selling a $100 MP3 player based on such a thing, but it would certainly make possible a device smaller and much cheaper than a current iPod in the rumored low-end capacity.

Cornice's older devices are already used in some MP3 players (and other things, such as video cameras) and have been a focus of rumorological speculation, but they were slightly smaller in capacity, and, I think, somewhat more expensive; the players based on them haven't been all that attractively priced.

The announcement comes one day before the San Francisco Macworld keynote, but this could just be a coincidence, since the press release talks about CES, which is also coming up in a few days.

Update: Apparently Cornice's earlier drive wasn't more expensive, just smaller. $100 retail still seems low.

Comments

[kerri9494.livejournal.com]

Well, I guess they announced the $250 4GB model today...http://www.macmall.com/macmall/families/ipod/

What I don't understand is why someone would buy the 4GB one when the 15GB is only $50 more...?

[mmcirvin.livejournal.com]

Yeah, it turned out to be priced about as high as a pretty conservative analyst would say it had to be, which means it's hard to figure out who would buy one. My guess is that they're trying to position it as a fashion accessory.

The rumors were of two models, and this one was pretty much the one described as the high-end model. My guess is that they prototyped the 2GB one and then figured out there was no way to sell it for a price people would pay.

[mmcirvin.livejournal.com]

And, of course, Apple has been smarter than me before; when the original iPod was announced way back when, I was in the "so? it's just a really expensive MP3 player" camp. And (as As The Apple Turns just said) this bugger is really pretty similar to the original iPod in a lot of ways. Of course back then there weren't far better deals just adjacent to it in the product space.

[mmcirvin.livejournal.com]

By the way, the minis don't use the Cornice drive at all; they use Hitachi drives.

I'm thinking that Apple's going to try to price these lower once the manufacturing costs go down a bit, as they ought to. For now the only real draw of the things is size and appearance, which should be significant for some people.

The really interesting news is that they're willing to license the regular iPod to at least one third party.