Where are all the iPod killers? Even Android media players can't beat Apple pricing

Even with form-factor optimized software and a strong supply chain of commoditized components, Android can't manage to put a dent in Apple's iPod media player device sales.

My colleague and Editor-in-Chief Larry Dignan really hit the nail on the head today regarding Android's position in the emerging tablet marketplace -- they just can't chase Apple when it comes to pricing the device.

It's a sobering fact that isn't going away -- the Android tablet manufacturers are going to be at least a cycle behind on product development when it comes to the software and components needed in order to put together something that is compelling as even the current iPad.

Now, don't misinterpret this as Android failing. Android is going absolutely gangbusters in the mobile device industry. According to retail research firm NPD, 44 percent of mobile devices activated in the US in the 3rd quarter of 2010 were running Google's Android's OS, amounting to an eleven percent gain from the previous quarter, compared to Apple's iPhone with a 23 percent share (maintaining its position) and RIM's BlackBerry falling to 22 percent from a previous 28 percent.

Which is why I was very curious when Andy Nusca put up this news item regarding a new Android-based ARCHOS media player that runs Android Froyo. It costs $249.00. Say what?

Now, I can understand why the Android Tablets are behind. Froyo isn't optimized for tablets, nor is the application software that is designed to run on Android smartphones. Tablets are also currently experiencing something of a component gap when it comes to screens, processors and other integrated electronics in order to compete successfully with the iPad.

But Android media players -- effectively cell phones without the cell phone (much like Apple's iTouch) shouldn't have that problem. And yet, they apparently do, because nobody's launched a viable iTouch competitor at a price that people are willing to pay for.

Don't get me wrong, the Archos 43 appears to have a bunch of things going for it. It's got a 1Ghz ARMv8 CPU, Android Froyo, 8GB or 16GB of internal memory that's expandable with a Micro-SDHC slot, an 800x480 pixel 4.3" capacitive touchscreen, support for all sorts of multimedia formats, Wireless-N networking, Bluetooth 2.1, HD camcorder, integrated accelerometer and HDMI output.

In other words, everything you would expect from a high-end Android Froyo smartphone, minus the cellular transceiver. The problem is, you'd expect this to cost LESS than the iPod Touch, which has a higher resolution screen, 300,000+ games and apps, and all of the music and video content that Apple leverages with iTunes.

After all, in the smartphone component space, the parts are highly commoditized and the supply chain is stable, so you'd think these manufacturers wouldn't have issues putting together something viable.

They can't. The Archos is MORE expensive than a comparable 8GB iTouch, which retails at around $229.00. The 32GB iTouch is about $30-$40 more.

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Granted, the Archos can do a bunch of things the iTouch can't. Its got the HDMI output and it's a more open device. There's a minority of folks that might find that attractive, including myself. But for the majority of consumers, if you put these side by side, they're going to choose the iTouch, unless the Archos or a comparable device is significantly cheaper and a better value overall.

Now, it's certainly possible that Archos is the wrong vendor to put together an iTouch-killer, since traditionally they build high-end, esoteric consumer electronics products. Maybe we need someone like Vizio or Samsung or LG or even Panasonic to step in. But they'd have to price it at under $200 for the device to be attractive, and realistically I'm leaning towards even a lower price than that, such as around the $160.00 and less mark.

If there is room for a "premium" Android media player, it would have to be someone that could leverage a lot of content and has the marketing and industrial design moxie to pull it off. The only company that I think could do this is SONY -- which has a huge stable of music, games, movies and TV shows which it could build its own iTunes competitor with. In other words, an Android Walkman. But it would have to be at least price parity with the iTouch, and SONY doesn't have a decent track record for competing on prices.

Aside from SONY, the only other possible contender would be Amazon, which has both Amazon MP3 and Amazon Video, as well as their Kindle content properties and is currently building their own Android app store for an un-named future device.

In the smartphone world, Android currently has an advantage because it can leverage carrier diversity as well as carrier subsidies, and carriers also like Android's flexibility because it can be customized to their needs. In this case, Apple's desire for platform control works against them and that's why Android is thriving in that space.

But in retail consumer electronics, it's not Android's playing field. Not yet. Not for Tablets or any other consumer device. And until an Android device manufacturer can undercut Apple's device pricing and deliver a product with serious wow factor and compelling content, Apple is going to remain king of the jungle.

Will Android ever be able to break into iTouch territory? Talk Back and Let Me Know.