A Nano Step for Apple?

So many of us eagerly awaited the latest word out of Apple (Nasdaq: AAPL  ) , and rumors came to fruition yesterday. Indeed, the iTunes-enabled cell phone came to pass (I remarked last week on how this long-awaited product, also brought to you by Motorola (NYSE: MOT  ) and Cingular, has become a sort of humdrum concept), as did a brand-new micro-music player -- the Apple iPod nano. Although I'm glad Jobs had more up his sleeve than just the phone, I don't know that I feel confident that the Nano is the runaway hit many Apple fans and shareholders surely expect it will be. In other words, is less really more?

When I first saw a picture of the Nano, I thought it looked a bit like a cross between an iPod and the iPod Shuffle. The color screen is admittedly snazzy, and you can get the product in black (both of which are concepts I can really get behind). Other than those elements, though, I'm just not sure the Nano is that spectacular-- and I have to say I was shocked to find it's replacing the popular iPod Mini altogether.

Given the popularity of the Minis, the Nano seemed to me a more logical replacement for the Shuffle. Of course, that strategy would leave Apple without a low-priced music player, seeing how the Nano retails for $199 for a mere 2GB of memory and $249 for 4GB. The maxed-out Nano holds only 1,000 songs; for a mere $50 more, you can get the 20GB iPod and have 5,000 songs at your fingertips. Meanwhile, with the now-extinct iPod Mini (the product has already disappeared from Apple's site), you could get a 6GB version for $249.

And in an element that Apple investors should consider when contemplating the company's financial outlook, the Nano's flash memory may not do much to help Apple's margins, either, seeing how flash memory is more expensive than the hard drives that were used in the iPod and iPod Mini.

When Apple introduced the iPod Shuffle, it marketed that product as "unpredictable" -- indeed, it was a surprise in many ways. There's not much surprise with the Nano -- it's really more of a mishmash of elements from the other iPod-branded music players (and in my opinion, not necessarily the right ones) than anything truly novel. Using a popular buzz word like "nano" also makes me fear a little shark-jumping, too.

I'm sure many of you are poised and ready to hit the link to my email address right now to tell me how you feel about the Apple iPod nano and its potential for success. That's fine. How this product does in the marketplace remains to be seen, for sure, and it's really impossible to predict. Personally, though, I feel that there's just not enough that's revolutionary about the latest from Apple.

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Alyce Lomaxdoes not own shares of any of the companies mentioned.


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