Apple possibly canning iPod, Shuffle

[LOL_Wut_Axel]

I'm by no means an expert, but the capital costs to significantly increase production are pretty high. The iPad has only been around 18 months but has gobbled up a lot of production. Also look at SSDs. Strong growth amongst the AT Forums set and other early adopters (now even the mainstream MBA) but the cost curve isn't bending down quickly.

Apple is extremely protective of its market-leading gross margins. When the 4th gen touch arrived, they even raised the base MSRP from $199 to $229! With a virtual monopoly in DMPs, they've had no business reason to raise iPod touch memory capacities.

Seems like the main way for flash memory prices to go down is process shrinkage, which happens over time. Meanwhile demand in smartphones and tablets is still growing.

Economies of scale and lower manufacturing costs still dictate that prices will be significantly lower even with much higher production, especially since the memory has been manufactured for two years. Apple is getting significantly more margin from the current one than the model in 2009. Flash memory has gone down because of those two things I mentioned; die shrinks are part of what cause lower manufacturing costs. Flash memory is produced in much higher quantity than SSDs, and also costs a lot less to manufacture.

Apple hasn't really ever cared that much for high profit margins with their iPods. They're priced to sell in huge quantities, and if Apple raises prices the small 8% revenue it makes for them as a whole will shrink even more. Given they've had the already-overpriced 64GB model for $400 for two years, I think they could very well take it down to $300 and make a 128GB model the $400 one. Apple still knows there's a market for media collectors, which is why it's still selling the iPod classic. They'll eliminate it to streamline their product line, but I'd be surprised if they don't come to market with a capacity of 128GB to still provide those people an option.

 

[manly]

correct me if I'm wrong, but you're merely arguing what you as a consumer thinks Apple should do. Having watched Apple for many years, they march to their own beat. Given a choice between margin or being "consumer-friendly" they usually pick the former. It's the old saying where they give you 98% of what you want, so that they can sell you its replacement. I have great respect for Apple, Inc. and their shareholders have been rewarded handsomely by their execution.

I can't find the price curve of flash memory going back to 2008, but you're right that it's trended down. I did see an article that said after the 2008 crisis and inventory clearing, prices actually went up and were fairly stable through mid-2010. This correlates with my recollection of DRAM pricing also from the 2008-present period. You're only addressing the supply-side of the equation, but there's no doubt smartphone and tablets have eaten up tons of flash memory in recent quarters. Aren't PC SSDs derived from NAND flash? I don't know the constituent cost of the controllers, but I'm arguing it's another case where rising demand is supporting (declining) price levels. I'm certainly not saying Moore's Law doesn't hold, but that there are business reasons why a 128GB iPod touch hasn't landed yet.

I do think you're wrong on margins, on the one hand you say Apple prices iPods to move units, but on the other hand you're adamantly arguing the 64GB iPod touch is overpriced. Which is it? I'd argue strong gross margins is part of Apple's DNA, perhaps back to its inception (Woz wanted to somewhat liberally put out the first design, Jobs convinced him to build a business around it). When Apple was first an iPod company with a solid but unspectacular PowerPC-based Mac business, they had healthy margins a little lower than today's. It's ridiculous now, but the first color iPods sold for about $600.

 

[LOL_Wut_Axel]

correct me if I'm wrong, but you're merely arguing what you as a consumer thinks Apple should do. Having watched Apple for many years, they march to their own beat. Given a choice between margin or being "consumer-friendly" they usually pick the former. It's the old saying where they give you 98% of what you want, so that they can sell you its replacement. I have great respect for Apple, Inc. and their shareholders have been rewarded handsomely by their execution.

I can't find the price curve of flash memory going back to 2008, but you're right that it's trended down. I did see an article that said after the 2008 crisis and inventory clearing, prices actually went up and were fairly stable through mid-2010. This correlates with my recollection of DRAM pricing also from the 2008-present period. You're only addressing the supply-side of the equation, but there's no doubt smartphone and tablets have eaten up tons of flash memory in recent quarters. Aren't PC SSDs derived from NAND flash? I don't know the constituent cost of the controllers, but I'm arguing it's another case where rising demand is supporting (declining) price levels. I'm certainly not saying Moore's Law doesn't hold, but that there are business reasons why a 128GB iPod touch hasn't landed yet.

I do think you're wrong on margins, on the one hand you say Apple prices iPods to move units, but on the other hand you're adamantly arguing the 64GB iPod touch is overpriced. Which is it? I'd argue strong gross margins is part of Apple's DNA, perhaps back to its inception (Woz wanted to somewhat liberally put out the first design, Jobs convinced him to build a business around it). When Apple was first an iPod company with a solid but unspectacular PowerPC-based Mac business, they had healthy margins a little lower than today's. It's ridiculous now, but the first color iPods sold for about $600.

The "consumer-friendly" option would be making a new 128GB model, and if they drop the iPod classic from their product lines and don't make one, they won't sell you its replacement to begin with.

As for them pricing them to sell or being overpriced, the 64GB one is overpriced; the others are priced to sell, including the classic. If they don't replace it, they don't have anything to sell to media junkies.

Apple loves high margins, but the iPod was never a product from which they'd get that. It was made to be a gateway device for other Apple products, so it's priced accordingly. Apple has the iPhone, iPad, and Mac for high margins. That's where they get most of their money. Considering that, it makes sense to replace the model and give the new iPod touch a 128GB capacity for the same price point as the old. Flash memory pricing has gone down significantly from two years ago to now.

 

[manly]

The "consumer-friendly" option would be making a new 128GB model, and if they drop the iPod classic from their product lines and don't make one, they won't sell you its replacement to begin with.

As for them pricing them to sell or being overpriced, the 64GB one is overpriced; the others are priced to sell, including the classic. If they don't replace it, they don't have anything to sell to media junkies.

Apple loves high margins, but the iPod was never a product from which they'd get that. It was made to be a gateway device for other Apple products, so it's priced accordingly. Apple has the iPhone, iPad, and Mac for high margins. That's where they get most of their money. Considering that, it makes sense to replace the model and give the new iPod touch a 128GB capacity for the same price point as the old. Flash memory pricing has gone down significantly from two years ago to now.

I wouldn't hold my breath that they'd choose "consumer-friendly" over margin.

Would like to see some sourcing, but I'm not convinced NAND flash components are as cheap as you believe.
iPhone 3Gs bill of materials
HP TouchPad bill of materials

That's about a 2-year period into this summer.

Look, everybody knows iPod is their 4th most important product line and declining. To say margins were never important in iPods is just incorrect. Like I said, 5 years ago when iPods transformed Apple into a CE giant, overall gross margins were great. At the time, it was arguably a more important business than Macs and not just a low-margin gateway device as you suggest. Nor have iPods gotten any cheaper in a couple years, so overall iPod margin is likely still healthy. If anything, it was the $499 iPad and $999 MBA price points that surprised analysts on competitiveness but knowing Apple as we do, there's still plenty of profit built in.

Again, I'm not arguing against what's important to you as a discerning consumer. But media junkies are a tiny part of a business in relative decline, and it's not something they have to actively chase if there's been zero competition until Samsung's entry. They'll certainly eventually get to 32/64/128GB flash iPods, but I wouldn't expect that for next week.

 

[LOL_Wut_Axel]

I wouldn't hold my breath that they'd choose "consumer-friendly" over margin.

Would like to see some sourcing, but I'm not convinced NAND flash components are as cheap as you believe.
iPhone 3Gs bill of materials
HP TouchPad bill of materials

That's about a 2-year period into this summer.

Look, everybody knows iPod is their 4th most important product line and declining. To say margins were never important in iPods is just incorrect. Like I said, 5 years ago when iPods transformed Apple into a CE giant, overall gross margins were great. At the time, it was arguably a more important business than Macs and not just a low-margin gateway device as you suggest. Nor have iPods gotten any cheaper in a couple years, so overall iPod margin is likely still healthy. If anything, it was the $499 iPad and $999 MBA price points that surprised analysts on competitiveness but knowing Apple as we do, there's still plenty of profit built in.

Again, I'm not arguing against what's important to you as a discerning consumer. But media junkies are a tiny part of a business in relative decline, and it's not something they have to actively chase if there's been zero competition until Samsung's entry. They'll certainly eventually get to 32/64/128GB flash iPods, but I wouldn't expect that for next week.

The margins they get in everything else is huge, and given the fact that the iPod touch sells a lot yet iPods in general only make 8% of Apple's revenue should tell you as much. They're not made to be high-margin devices; they never were. Years ago, they weren't. Apple got what they wanted because they sold more than 100 million on them at margins much lower than they're used to. They got profits from selling massive quantities of them. That allowed them to produce the iPhone and iPad as well as make several new Macs, products made for high margins.

Also, you seem to think that the Flash memory on the iPod touch is very expensive like that on SSDs. It's more expensive relative to 1.8" Hard Drives, but it's not even close to being the price of SSDs to manufacture.

 

[TheStu]

The margins they get in everything else is huge, and given the fact that the iPod touch sells a lot yet iPods in general only make 8% of Apple's revenue should tell you as much. They're not made to be high-margin devices; they never were. Years ago, they weren't. Apple got what they wanted because they sold more than 100 million on them at margins much lower than they're used to. They got profits from selling massive quantities of them. That allowed them to produce the iPhone and iPad as well as make several new Macs, products made for high margins.

Also, you seem to think that the Flash memory on the iPod touch is very expensive like that on SSDs. It's more expensive relative to 1.8" Hard Drives, but it's not even close to being the price of SSDs to manufacture.

It appears that the 4th generation iPod Touch is using a single NAND chip for storage. That means that 64GB NAND exists (I wasn't sure if it was) but it might be prohibitively expensive to drop the price while maintaining margins. They might also price it artificially high if yields on 64GB NAND is too low, which would also explain the absence of a 64GB iPhone since that uses 1 NAND as well.

As for a 128GB Touch... they would need to either drop in another NAND chip (which is a large footprint relative to the touch) or if 128GB NAND exists, expect it to be stupidly expensive as well.

 

[manly]

The margins they get in everything else is huge, and given the fact that the iPod touch sells a lot yet iPods in general only make 8% of Apple's revenue should tell you as much. They're not made to be high-margin devices; they never were. Years ago, they weren't. Apple got what they wanted because they sold more than 100 million on them at margins much lower than they're used to. They got profits from selling massive quantities of them. That allowed them to produce the iPhone and iPad as well as make several new Macs, products made for high margins.

Also, you seem to think that the Flash memory on the iPod touch is very expensive like that on SSDs. It's more expensive relative to 1.8" Hard Drives, but it's not even close to being the price of SSDs to manufacture.

sorry, but you're just wrong on iPod margins then and now. When the iPod peaked in financial importance around 2007, it contributed nearly half of Apple's sales and to overall gross margin of 33%. In the previous full fiscal years (2005, 2006), gross margin was 29% so clearly iPods were beneficial to Apple's profit margins. You're looking at the last year or two when the iPhone has essentially replaced the iPod to incorrectly conclude current iPod margins are "much lower" than normal for Apple. GM now pushes high-30s mainly because the iPhone is immensely profitable; but each of the 4 major business segments has gross margin in line with their historical norms for Apple hardware.

I never said flash memory is priced similarly to SSDs, but I did assert SSDs are built from NAND flash. The parallel I draw in both is that burgeoning demand offsets supply growth and lower manufacturing costs. Surprisingly, the iSuppli BOMs I referenced suggest 16GB component prices have hardly descended in 2 years. If accurate, that explains why 16GB smartphones and tablets still rule the roost. Maybe you're referencing manufacturer's marginal cost of production on existing lines, but what matters to systems integrators is market price. It's basically why Apple spends billions to secure long-term contracts from its suppliers; their hit products consume massive amounts of flash and can certainly influence market prices throughout the industry. Again, if there's a price chart for flash memory over the past few years, I wouldn't mind seeing it.

I think you're starting with a reasonable conclusion of kill the classic and replace it with a 128GB touch, then building the business arguments to support that conclusion. TheStu mentioned some key technical factors that I wasn't previously familiar with, but also helps to explain why 64GB has been the upper limit for a while.

A related teardown analysis (post #22, #24), albeit from a year ago:
http://forums.macrumors.com/showthread.php?t=1003125

In short, if you find iSuppli reputable, you'll conclude Apple makes a solid profit on each of the iPod touch models and that switching to 2x64GB NAND at $400 destroys its profit margin.

 

[LOL_Wut_Axel]

It appears that the 4th generation iPod Touch is using a single NAND chip for storage. That means that 64GB NAND exists (I wasn't sure if it was) but it might be prohibitively expensive to drop the price while maintaining margins. They might also price it artificially high if yields on 64GB NAND is too low, which would also explain the absence of a 64GB iPhone since that uses 1 NAND as well.

As for a 128GB Touch... they would need to either drop in another NAND chip (which is a large footprint relative to the touch) or if 128GB NAND exists, expect it to be stupidly expensive as well.

It's been two years since the 64GB model has been at $400. I HIGHLY doubt that Flash memory pricing hasn't decreased, especially since it's had a huge adoption and manufacturing costs have gone considerably down.

 

[LOL_Wut_Axel]

sorry, but you're just wrong on iPod margins then and now. When the iPod peaked in financial importance around 2007, it contributed nearly half of Apple's sales and to overall gross margin of 33%. In the previous full fiscal years (2005, 2006), gross margin was 29% so clearly iPods were beneficial to Apple's profit margins. You're looking at the last year or two when the iPhone has essentially replaced the iPod to incorrectly conclude current iPod margins are "much lower" than normal for Apple. GM now pushes high-30s mainly because the iPhone is immensely profitable; but each of the 4 major business segments has gross margin in line with their historical norms for Apple hardware.

I never said flash memory is priced similarly to SSDs, but I did assert SSDs are built from NAND flash. The parallel I draw in both is that burgeoning demand offsets supply growth and lower manufacturing costs. Surprisingly, the iSuppli BOMs I referenced suggest 16GB component prices have hardly descended in 2 years. If accurate, that explains why 16GB smartphones and tablets still rule the roost. Maybe you're referencing manufacturer's marginal cost of production on existing lines, but what matters to systems integrators is market price. It's basically why Apple spends billions to secure long-term contracts from its suppliers; their hit products consume massive amounts of flash and can certainly influence market prices throughout the industry. Again, if there's a price chart for flash memory over the past few years, I wouldn't mind seeing it.

I think you're starting with a reasonable conclusion of kill the classic and replace it with a 128GB touch, then building the business arguments to support that conclusion. TheStu mentioned some key technical factors that I wasn't previously familiar with, but also helps to explain why 64GB has been the upper limit for a while.

A related teardown analysis (post #22, #24), albeit from a year ago:
http://forums.macrumors.com/showthread.php?t=1003125

In short, if you find iSuppli reputable, you'll conclude Apple makes a solid profit on each of the iPod touch models and that switching to 2x64GB NAND at $400 destroys its profit margin.

Ding, ding, ding. The margins Apple gets on their iPods are much lower than they get on their other products.

Also, using figures from one year ago should be a red flag. This year has been the one where we've seen memory pricing go down the most compared to the past three years or so.

 

[shortylickens]

That makes sense. iPhones and even used iPhones are much more popular. I see people using older models without service just because they're so flexible.

 

[TheStu]

It's been two years since the 64GB model has been at $400. I HIGHLY doubt that Flash memory pricing hasn't decreased, especially since it's had a huge adoption and manufacturing costs have gone considerably down.

The 3rd generation and earlier iPod Touches were using 2 NAND chips, the 4th moved to a single NAND chip. So the 3rd generation achieved 64GB with 2*32GB NAND, and it was released in Sept '09. The 4th generation uses 1 NAND chip and it was released in Sept '10.

If I recall correctly from a previous googling, 64GB NAND was announced by both Toshiba and Samsung in Winter '09. The iPhone 4 came out in June '10.

So, unless Apple moves back to a 2 NAND design for the 5th gen iPod Touch I don't expect that we will see a 128GB Touch. They might have to though if they want to kill off the Classic.

 

[manly]

Ding, ding, ding. The margins Apple gets on their iPods are much lower than they get on their other products.

Also, using figures from one year ago should be a red flag. This year has been the one where we've seen memory pricing go down the most compared to the past three years or so.

No what should be a red flag is you doubt flash memory pricing has been relatively stable, but can't prove that assertion beyond stating "lower manufacturing costs". Nor prove the assertion that iPods are a low-margin business, which is untrue throughout its history. When iPod sales peaked in 2007 at about half of Apple's business, overall GM had improved 4% YoY. I referenced a TouchPad teardown analysis from just this summer showing a 16GB part is not incredibly lower in price than a year ago. If you choose to ignore credible information from Apple's own SEC reports and iSuppli, that's your prerogative.

Again you're approaching this from a customer perspective of what benefit would drive a $400 iPod touch sale to replace a pre-existing iPod classic. That's fine but media junkies are not even a large segment of the market, and Apple has other business concerns to base its decision. If the 64GB chip is as expensive as it seems, they're going to stand pat. It actually makes a lot more business sense to cram the next iPad with 128GB storage than the next iPod touch.

Anyway, it's not worth arguing about. You have preconceived notions about an overpriced SKU and that's driving your viewpoints. If next week's show showcases iPhone and iOS5, Apple may not even mention the iPod classic.

 

[Patranus]

I love the iPod classic.

Have one that I just leave in the car and it is great.
I don't need an iPod touch to manage my car music.

 

[LOL_Wut_Axel]

The 3rd generation and earlier iPod Touches were using 2 NAND chips, the 4th moved to a single NAND chip. So the 3rd generation achieved 64GB with 2*32GB NAND, and it was released in Sept '09. The 4th generation uses 1 NAND chip and it was released in Sept '10.

If I recall correctly from a previous googling, 64GB NAND was announced by both Toshiba and Samsung in Winter '09. The iPhone 4 came out in June '10.

So, unless Apple moves back to a 2 NAND design for the 5th gen iPod Touch I don't expect that we will see a 128GB Touch. They might have to though if they want to kill off the Classic.

Pretty much, yes. I'm sure they won't be stuck with the max being a 64GB player.

manly,

This illustrates my point better:

The Company posted revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share. These results compare to revenue of $4.36 billion and net quarterly profit of $410 million, or $.47 per diluted share, in the year-ago quarter. Gross margin was 35.1 percent, up from 29.8 percent in the year-ago quarter. International sales accounted for 43 percent of the quarter’s revenue. Apple shipped 1,517,000 Macintosh® computers and 10,549,000 iPods during the quarter, representing 36 percent growth in Macs and 24 percent growth in iPods over the year-ago quarter.

Most of their revenue came from iPods, but most of their margins came from Macs.

 

[manly]

I think we should agree to disagree. Wish the forums would nest quotes for us.

manly,

This illustrates my point better:

The Company posted revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share. These results compare to revenue of $4.36 billion and net quarterly profit of $410 million, or $.47 per diluted share, in the year-ago quarter. Gross margin was 35.1 percent, up from 29.8 percent in the year-ago quarter. International sales accounted for 43 percent of the quarter’s revenue. Apple shipped 1,517,000 Macintosh® computers and 10,549,000 iPods during the quarter, representing 36 percent growth in Macs and 24 percent growth in iPods over the year-ago quarter.

Most of their revenue came from iPods, but most of their margins came from Macs.

Conclusion not supported by the facts. From FY2005 to FY2007 iPod units sold went from 22.5M to 51.6M . The quarter you chose shows extremely high YoY Mac sales growth; without looking it up, I'd guess BTS FY2007 Q4. But if iPods had meager margins, Apple's overall annual GM wouldn't have gone from 29% to 33% as iPod sales exploded. If I had to dig up annual Mac sales growth for the same period, I know it was increasing consistently but nowhere nearly as strong as iPod units.

Have a great weekend folks, we've hijacked this thread long enough.

 

[Zaap]

I don't know how representative I am of the consumer population, but I've started to see the whole concept of a portable music player in a different light.

I used to want a portable device with tons of internal storage in order to keep as much of my extremely large (multi-terabyte) music collection with me in the car, while traveling, at the gym, etc.

Now I find I don't want to worry about the storage capacity of my portable device - I want it connected via 3G or Wifi and able to access MY ENTIRE collection, not just a copy of whatever segment of it I've crammed onto the internal storage.

That's why for me, my cellphone has become the player of choice. I don't have to compromise about what to take with me from my home collection- access to any track in my entire collection is now in my pocket. For the few times I'm outside of a connection area for either Wifi or 3G, around 32GB of internal storage is more than enough for a fallback.

Granted, my current preference (used remotely) hinges on an unlimited data plan, and we all know that cell carriers are anxious to cut us off from those. So I'll probably have my 'anywhere access' cut out from under me. But even so, I'll still just plan my music outings around the nearest wifi locations I use, and that'd still make more sense to me than a larger amount of internal storage.

As a bonus, I've also got movies, games, apps and other types of entertainment in the same device- no carrying around multiple devices.

The non-touchscreen iPods do have one clear advantage: battery life. I have a 4th gen 32GB iPod Touch and find the battery life completely unacceptable. It can barely make it through a day of heavy use before it needs a charge. Other non-touch screen iPods I've owned would go for days between charges.

If Apple caters to people with needs like mine, then the ultimate device would be cloud connection free of a third party, and a quantum leap in battery life while maintaining the touch screen. I won't hold my breath waiting.

 

[alkemyst]

You are the model the unlimited data plans are trying to cut out.

Seriously, most owning multi-terabyte music collections (I don't and I buy a lot of music) wouldn't be too upset paying more. The shift comes through those that got their music free and now want to listen to it.

Same with a movie collection.

I am willing to bet there are 'niche' devices that can do all you want though. Chances are they are about $10k+.

 

[LOL_Wut_Axel]

I don't know how representative I am of the consumer population, but I've started to see the whole concept of a portable music player in a different light.

I used to want a portable device with tons of internal storage in order to keep as much of my extremely large (multi-terabyte) music collection with me in the car, while traveling, at the gym, etc.

Now I find I don't want to worry about the storage capacity of my portable device - I want it connected via 3G or Wifi and able to access MY ENTIRE collection, not just a copy of whatever segment of it I've crammed onto the internal storage.

That's why for me, my cellphone has become the player of choice. I don't have to compromise about what to take with me from my home collection- access to any track in my entire collection is now in my pocket. For the few times I'm outside of a connection area for either Wifi or 3G, around 32GB of internal storage is more than enough for a fallback.

Granted, my current preference (used remotely) hinges on an unlimited data plan, and we all know that cell carriers are anxious to cut us off from those. So I'll probably have my 'anywhere access' cut out from under me. But even so, I'll still just plan my music outings around the nearest wifi locations I use, and that'd still make more sense to me than a larger amount of internal storage.

As a bonus, I've also got movies, games, apps and other types of entertainment in the same device- no carrying around multiple devices.

The non-touchscreen iPods do have one clear advantage: battery life. I have a 4th gen 32GB iPod Touch and find the battery life completely unacceptable. It can barely make it through a day of heavy use before it needs a charge. Other non-touch screen iPods I've owned would go for days between charges.

If Apple caters to people with needs like mine, then the ultimate device would be cloud connection free of a third party, and a quantum leap in battery life while maintaining the touch screen. I won't hold my breath waiting.

Because you can't do something anywhere near as intensive on them, nor would you want to given their limitations. Apple underestimates their playback figures, but they rate the continuous music playback time at 40 hours for the touch and 36 hours for the classic. They both reach about 45 hours if you follow Apple's guidelines.

 

[Karl Agathon]

That would suck. I have the iPod Classic and have no need/desire for a smart phone or iPad. I just want a music player.

+1 Still running strong on my 5.5 gen classic.

 

[TheStu]

I haven't even turned on my 30GB 'Classic' in almost a year, I started using my phone since the battery was going out on it (the iPod).

I can do two directional (in non-specific locations) swipes to unlock and then change the track on my phone which makes it almost as convenient as the iPod click wheel. Plus the latest update gave it automatic playlist generation that would pull songs from the marketplace dynamically.

 

[gmaster456]

I'm disappointed but not surprised. Part of the reason I think the classic isn't selling well is because its hard for people to justify spending 250 smackers on a hard disk based music player. If it were $199, maybe they would sell more. As long as apple puts out a 128gb touch I think they will be fine.

 

[Karl Agathon]

I'm disappointed but not surprised. Part of the reason I think the classic isn't selling well is because its hard for people to justify spending 250 smackers on a hard disk based music player. If it were $199, maybe they would sell more. As long as apple puts out a 128gb touch I think they will be fine.

I have to concur with you there, $250 is a bit steep of a price point. I guess its priced up like that because its a 160 giger maybe? I think $199 would be a good price point. Or even maybe $179. I dont need all the extra bells and whistles of an ipod touch. I just want a general music player.

 

[LOL_Wut_Axel]

I have to concur with you there, $250 is a bit steep of a price point. I guess its priced up like that because its a 160 giger maybe? I think $199 would be a good price point. Or even maybe $179. I dont need all the extra bells and whistles of an ipod touch. I just want a general music player.

Perhaps it's just me, but I've never trusted 1.8" Hard Drives, especially when they're on such thin enclosures with very little in the way of protection.

I bought a Zune 120GB two years ago. I babied it, but it fell from about three feet onto tile flooring. This was about six months after owning it. I said "okay, no big deal." The only thing visible was that a tiny bit of the painted aluminum on the bottom right corner came off, but it didn't even dent. It continued to work fine for a month, and hadn't fallen since.

One day, I return home after been listening to music for some time. I plug it in, just like normal until it completes syncing. Unplug it, start listening to music in my house, and all of a sudden it goes bats**t crazy and starts skipping songs by itself. I tried to get it to stop, toggling the hold switch and trying to pause and sleep to no avail. I force it to restart. When restarting, the Hard Drive is noticeably louder than normal, and all of a sudden starts clicking: head crash. Wonderful. I tried to restart it two times, all of which it told me to reinstall the firmware. Restore the firmware three times, and it works. The problem is that when booting I had the same issue. I call Zune support and talked to a lady who tried talking me through some steps, all of which I had done before and ultimately lead to me giving her my contact info and since I'm in PR I had to pay USPS for sending it to their facilities in Texas.

Two weeks later, a refurb unit arrives. I'm already noticing bad signs: the hold toggle didn't work and you'd have to open it and relocate the switch inside the unit so it works. It had two scratches, as well. I boot it up, starts fine. Install the newest firmware, fine. Then I start with the process of putting around 40GBs of media on it, and I always got an error on the software when it got to around 1GB. Deleted software and firmware completely and reinstalled. Worked fine, but again I got the same problem. It turns out the Hard Drive in the supposedly "fully-functional" unit they sent me had bad sectors, hence why it would only sync up to a certain point and would then have errors.

Sent it in, got an apology and was escalated so someone else higher up would take care of it and a new unit which actually did work completely with no problems for the year and three months I had it came, even though it fell similarly to the first Zune (only two times, though). It got stolen from my college dorm, along with my roomate's laptop. Excellent.

Cliffs:

• Bought Zune 120
• Works for six months fine; a Hard Drive head crash occurs and I need to send it in for replacement
• Refurbed unit comes and has problems syncing my media; turns out the Hard Drive had bad sectors
• New unit is sent to me and works perfectly for a year and three months, then gets stolen.

1.8" Hard Drives are the devil.

 

[Zaap]

You are the model the unlimited data plans are trying to cut out.

I, like a lot of people, aren't fooled by any of these corporations' nonsense that bandwidth is a limited commodity. It isn't, and bandwidth is actually getting cheaper by the day for ISPs and carriers.

That said, I'm not actually using any more data than most people.

The person with 150GB locally probably only listens to a couple hundred megabytes worth of that storage potential at a time. Likewise, I'm not actually pulling down multiple terabytes- just whatever I listen to during a given time. It's just that I can select from ANY track I own from a massive library bigger than any portable device could ever have, without having the limits of a puny local storage scheme.

I'm hoping Apple and others understand this shift. So far, iCloud and iOS 5 look interesting. I'm one that hates the idea of 'the cloud' for desktop apps and such, but for media it makes sense.