This morning Apple announced revisions to its iPod mini and iPod photo product lines. They’re cheaper and they come with more storage: the iPod mini now comes in two capacities, 4 GB (US$199, formerly US$249) and 6 GB (US$249); the 60-GB iPod photo drops US$150 to US$449, and the 40-GB iPod photo is replaced by a cheaper, 30-GB model that’s thinner because it uses a single-platter drive, at US$349.
The iPod decontenting continues: no iPod model now ships with a dock, and the iPod photos do not come with AV cables. In fact, the new models don’t even ship with a FireWire cable, just a USB 2.0 cable. This has raised a certain amount of ire and the inevitable petition. As usual, I don’t think much of the histrionics involved when Apple does something its fanboys don’t like. They generally invoke every argument — loyalty to the Mac fanbase or nefariously abandoning the FireWire standard — except the sensible ones. In this case it comes down to economics.
When iPods first came out, they were Mac-only and shipped with a six-pin FireWire cable. Then the PC versions had a four-pin to six-pin FireWire adapter. Then, at some point — I can’t remember when — both FireWire and USB 2.0 cables began to be included. The point is that shipping with both cables was not always the standard.
At the same time, more USB functionality was added: first, the ability to sync via USB when the dock-connector iPods came out; then, more recently, the ability to charge via USB. At this stage, unless I’m missing something (corrections always welcome), there isn’t much left that you can do via FireWire that you can’t do with USB — transfer speeds and charging times notwithstanding. That leaves the question of USB vs. FireWire as a matter of preference.
Now let’s look at the economics. Apple is now selling about a million hard-drive based iPods a month. Every dollar they save per unit translates into $3 million in found revenue each quarter, so they’re liable to cut costs where it’s sensible to do so. That’s why, I think, they removed the dock, remote and case: they did the math and decided it made more sense to drop the price by $100 than to keep accessories that not everyone used.
When you ship something with two cables, one is going to be thrown away: you’re going to use the USB 2.0 cable or the FireWire cable, but you’re not likely to use both. If Apple sells a million hard-drive based iPods a month and ships two cables with each, a million cables of one sort or the other will be wasted. Now multiply the cost of one cable by Apple’s unit sales. Shipping with only one cable would save Apple millions of dollars, and would make it easier to lower the price while protecting profit margins. Which one to remove is easy. Every modern computer has USB, and more computers have USB 2.0 than FireWire. Every computer Apple has released for the past year and a half has USB 2.0.
The end result is a bare-bones iPod that costs us less to buy and costs them less to produce. Want a FireWire cable, dock, power brick, or case? Buy them separately. Most of us won’t want all the accessories and would prefer to save money than pay extra for a case or a dock we won’t use. So most of us come out ahead. Certainly Apple does, despite lower prices.
So now we’ve come full circle. Nearly three years ago I bought a 5-GB iPod for more than the 30-GB iPod photo costs now. Like that new 30-GB iPod photo, which I’m coveting awfully hard right now, it didn’t come with a case, remote, or dock, and it only shipped with one cable.
Update 2/24: As usual, Gruber says it better.