Apple Inc (AAPL)

[KVW]

After thinking about it overnight, I think Apple made a mistake in pricing the iPod mini at $249. It was probably done because that is the price they can make them for and still maintain their margins.

The logical price would have been $199.

Moving the low end iPod to 15GBs just makes this pricing more confusing. Of course, maybe users will now see the low end iPod as the bargain and purchase more of those.

As it is, the iPod mini doesn't seem to be positioned against the cheaper Flash Memory MP3 players. Indeed, these players are still cheaper. The iPod mini is just a lower end HD player, so all Steve's comparisons to that Rio was just smoke.

I bet Apple really had a 2GB model in the works for the under $200 price, but then couldn't build it for much less than the 4GB.

Also, having so many colors is probably a bad move. Yes, it does give customers a choice at the point of sale (which is a good thing), but I'd rather see them have a base color and a "color of the month". Retailers aren't going to like having to keep 5 times as many in stock just to cover the color choices.

I suppose this is just a continuing indication that Apple doesn't care much about their retail partners and are content with moving more and more sales direct through the Apple Store (where the volumes justify keeping 5 different models in stock only varying by color).

Kevin