Analyst: iPod and phone a one-two punch for Apple

Apple Computer Inc. at a special event in San Francisco on Wednesday delivered what one analyst called a one-two punch. The release of the long-awaited iTunes phone and the introduction of the sleek iPod nano put an already strong line-up of iPods in a good spot for the upcoming holiday buying season.

“It’s a one-two punch that covers all for the bases for Apple,” Jupiter Research analyst, Michael Gartenberg, told MacCentral immediately following the event.

The new Motorola ROKR is the first cell phone equipped with a version of Apple’s iTunes software. The phone lets users transfer up to 100 songs from iTunes to their phone. Apple CEO Steve Jobs showed the crowd at the event today the similarities between the iPod Shuffle and the phone, going so far as to describe the ROKR as “an iPod shuffle on your phone.”

Analysts, however, are not concerned that the ROKR will hurt sales of the iPod Shuffle. Citing the cost of the phone, Gartenberg believes the two devices will appeal to different audiences.

“This is clearly something that is meant to complement the iPod, not compete with it,” said Gartenberg.

For Apple, the ROKR is going to allow longtime users another way to listen to their music, but it may also serve another, equally important purpose.

“We think this is a good opportunity for people to experience the iTunes Music Store for the first time,” said Eddy Cue, Apple’s vice president of iTunes.

The iTunes application received an overhaul today adding several new features shown during the event, but there are still other features that Apple’s Cue said users would find as they start using the application.

For instance, iTunes will automatically adjust the split screen so users browsing the iTunes Music Store can see the full album review, limiting the amount of white space shown under the song listing in the bottom pane.

“If you are a user of iTunes, you will notice a lot of subtle changes that make things easier,” said Cue.

The iPod nano

Apple not only introduced a new product when they unveiled the iPod nano, they actually discontinued their most popular MP3 player, the iPod mini.

“To kill the mini is a really bold step for Apple,” said Jupiter’s Gartenberg. “Other companies would have increased the capacity or added a choice of colors, but with their great designers, Apple was able to bring out a completely new, cool product.”

With a completely redesigned iPod to fill the mini’s place in the product grid, Apple predicts that the nano will be the best selling iPod the company has ever produced.

“We can’t stand still. People have had their sites on the iPod mini for the holiday buying season and we just changed everything,” said Stan Ng, Apple’s director of iPod Product Marketing. “We continue to innovate; our tagline says it all — Impossibly Small.”

Competition in the MP3 player market is increasingly difficult, but Apple continues to outpace all comers. With a download rate of 1.8 million songs per day, an 82 percent market share of legal music downloads in the U.S. and 74 percent market share for all MP3 players, Apple is clearly the market leader.

While Apple is aware of its competition and certainly watches the market and the trends, the company said they don’t let it dictate how they operate.

“Competition is important and there are formable opponents out there, but that can’t run your long-term plan,” said Apple’s Eddy Cue.

While many people may have wished for a device outside of the music realm from Apple today, Jupiter’s Gartenberg thinks the nano is a big deal for Apple and the industry.

“These announcements show the naysayers that believe Apple should release a video iPod that there is still a lot of life left in music,” said Gartenberg.

Subscribe to the MacWeek Newsletter

Comments