Manufacturers Can't Make Mini Digital Music Players Fast Enough
By Jim Fuquay, Fort Worth Star-Telegram, Texas Knight Ridder/Tribune Business News
Mar. 30 - In search of a replacement for his broken MP3 digital music player, Nathan Ward had narrowed his choice to Apple's iPod Mini and Dell's Digital Jukebox by the time he visited an Apple Store in Dallas.
"The Dell's cheaper," Ward, 30, said as he examined a multihued array of $249 iPod Minis at the shop in Dallas' trendy Knox-Henderson neighborhood Saturday. The Dell is usually the same price, but the company has temporarily slashed it by $50.
Ward left without making a decision, although Apple's reputation for ease of use and the Mini's business-card dimensions were appealing, he said. The Mini weighs less than 4 ounces, holds about 1,000 songs and is smaller than the wallet-sized standard iPod and Dell.
Even if Ward had been ready to buy, he would have walked away from the Apple Store empty-handed. Demand for the iPod Mini has taken off since its Feb. 20 debut, but supplies are short.
At the Apple Store, the best shoppers can do is put their names on a waiting list. Several other stores, including Foley's, Best Buy, Circuit City, CompUSA and Target, quickly sell out each time a shipment arrives.
The Mini's popularity highlights the increasing consumer demand for digital music, a trend driven in part by larger numbers of homes with high-speed Internet access. Demand for the Mini has prompted electronics manufacturer Hitachi to increase production of the hard drives Apple uses in the device. And there's a lively Internet market for the little iPods.
"The Mini is just a little-bitty device," said Louis Hardin, owner of Hardin Computers in Arlington, Texas. Hardin owns a silver iPod Mini, which he notes is "even smaller than my cellphone."
Store officials say they get a half-dozen Minis every couple of weeks and are sold out within hours. In comparison, it's not hard to find the standard iPod or Dell's Jukebox.
"We got five or six (Minis) when Apple first sent them to each store," said Harold Floyd, sales manager at the CompUSA store in west Fort Worth. "They were gone immediately."
Floyd said the Mini shortage is worse than the shortages that followed the introduction of video-game consoles such as Sony's PlayStation2 and Microsoft's Xbox.
Apple, which makes one of every three MP3 players shipped to stores in the United States, said it took more than 100,000 orders for the Mini before the device's debut. Apple's Web site advises buyers to expect shipping to take one to three weeks.
On Thursday, Apple announced that it was delaying sales of the Mini outside the United States from April until July, citing demand "far exceeding the total planned supply through the end of June." The company has not said how many of the units it has shipped.
The shortage has sparked vigorous auction sales on eBay, where Minis are selling for more than their list price. One day last week, an "almost new" silver Mini went for $275, while "new in box" versions for immediate delivery were commanding prices topping $300.
The bidding was especially spirited among eBay users in Britain. One enterprising seller offering tips on how to locate a Mini drew more than a dozen bids that topped $20 for the tips.
Portable digital music players debuted in early 1998, and U.S. sales more than doubled last year. With that has come a rush of paid online music downloading services. Leading the way is Apple's iTunes Music Store, which recently announced that it has sold more than 50 million songs online at 99 cents each.
Last week, Wal-Mart launched its own 88-cent music download service. The world's biggest retailer joins other paid online music services, including Rhapsody and Napster. Microsoft said this month that it will start an online music store in the second half of the year.
Industry observers say the increasing number of U.S. homes with access to high-speed Internet connections, such as cable or DSL service, is driving up the number of music downloads. Songs that take several minutes to download via a dial-up connection can be captured in seconds at higher speeds.
"It's the combination of the players with the cheaper downloading" and the fact that they work so easily together, Ward said. "It's all becoming so user-friendly."
By all accounts, the shortage of Minis is real, not just static from some production foul-up.
Hitachi said Friday that it will boost output at the Thailand plant that makes the 1-inch, 4-gigabyte hard drives used in the Mini. A Hitachi spokesman declined to offer details other than to say that demand is higher than anticipated but that the expansion "will come sooner rather than later."
The Mini's success is not at all what was predicted.
Conventional wisdom said the price tag was too high, echoing criticism heard in October 2001 when Apple launched the original iPod for $400. That led wags to joke that iPod stood for "Idiots Price Our Devices."
The only ones laughing now are the folks at Apple, which has sold more than 2 million iPods, bringing in $744 million as of Dec. 31.
In the last three months of 2003, Apple sold 733,000 iPods. That's more than three times as many as it sold in the same quarter of 2002, and that doesn't include the Mini, which hadn't yet been introduced.
Cathryn Watkins, 24, an Austin, Texas, resident who was in Dallas to visit her parents Saturday, has her own explanation for the iPod Mini's success. She's owned one, in a lustrous silver tone, for about a month.
"It does more than you ever knew," said Watkins, who was shopping at the Apple Store. "You can stick it in your car and play through your car stereo. You can plug it into your home stereo. You can hook it up to speakers anywhere."
Apple's largest iPod, a 40-gigabyte model, holds as many as 10,000 songs, the company says. But Watkins said the Mini has enough capacity for her.
"I can work out and run and all that and never get tired of the songs," Watkins said.
Doug Cochran and Michelle Grant of Dallas, who were browsing for a Mini in the Apple Store on Saturday, agreed.
"The overall size is more appealing than anything else," Cochran said. "A thousand songs is plenty. If you want more than that, you can just download them from your computer."
Staff writer Andrea Ahles contributed to this report.
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