Once everyone calms down from the shock of Apple's iPhone price drop, perhaps we can look at the iPod lineup more rationally. While the stock price keeps dropping and pissed-off customers hope to return their phones, there was a lot of good news for customers this week (and bad news for Apple's competitors).
Here are some more winners and losers following Apple's mid-week announcements for its content player product line:
iPhone customers: Winners. Yes, this is the truth. For 99.99 percent of smartphone buyers, this is great news. The two big hits on the iPhone were its entry costs and that customers were forced to go with an AT&T plan. This repricing, while painful to current customers and to owners of Apple stock, removes one significant barrier for many potential customers.
By the way, I have only a bit of pity for early adopters who thought they would have a season of exclusivity with their high-priced iPhones. The world of technology isn't fair: deal with it. And, besides, Steve Jobs forked over $100.
Certainly, the quick changes users expect from the Web world can now be seen in the quickly shifting costs for hardware. How many times have we bought a computer or other product at full price only to find a refresh a month or two later? That's never a good feeling, but it's the modern techno-human condition.
Smartphone makers: Losers. The iPhone is a category-shaking product. And now it costs $200 less heading into the holiday season. Sure some current customers are mad, but this will settle down soon and regardless, every handset on the market will be compared to the iPhone.
Microsoft: Loser. Microsoft must have been praying that Apple would drop the ball with the new season's iPods and give the Zune (or the Zune refresh that's coming) a chance. No way.
While the Zune platform features a number of unique features — or unique when compared with the iPod that is — that number declined on Wednesday. Worse, the iPod models that users will see as competition for the Zune increased, along with additional lower price points for entry into the iPod platform. Ouch.
iPod customers. Winners. Same as above. Apple keeps widening the platform with video-capable models and Internet capabilities, while sustaining customer investment in third-party accessories.
All music player competition: Losers. What is the power of the iPod platform? Take a look at the Starbucks deal, which was the announcement that sent goose-bumps up my arm while sitting in the Moscone West hall listening to Steve Jobs. This deal has mostly been overlooked in all the hubbub over the iPhone price cut.
According to Howard Schultz, Starbucks co-founder and chairman, the company guards its brand very carefully. After running down the impressive statistics — 14,000 stores in 42 countries and serving 50 million customers a week — he pointed to the "attachment and trust our customers have in the experience."
He said that Starbucks aimed to create community around this coffee experience in Starbucks. The company sees the coffee shop as the physical place for music to be discovered. Now that process and brand includes Apple.
So, Starbucks has enough trust in the experience provided by the iPod platform and the iTunes online music store (and let's not forget the iPod market share), to bring Apple into its stores and into that coffee experience. That's a big deal.
"When i think about this partnership and what's possible, we're in a unique position to leverage the physical assets and global footprint of Starbucks with the innovation, the technology and the trust our collective customers have around Starbucks, Apple and iTunes, and bring that together to transform the marketplace. ... This is going to be transformational," Schultz said.
This is a deal that any maker of content client devices would cry for. And for sure the others are crying over it now.
In addition, this Starbucks deal could be a big win for the Macintosh as a business server. It makes sense — only a guess — that a Leopard Server-powered machine will be located in each Starbucks store.
Electronic book makers: Losers. There's a lot of buzz right now over e-books. Amazon is coming out with one and Google too. Sony has a huge campaign for the Sony Reader plastered over the walls, columns and stairways of the BART station near Moscone Center. Here's a nice table of the different e-book readers.
However, I suggest that all of these manufacturers, hoping to create a new category and do for books what Apple did for portable digital music, should just turn off the lights and take off the holiday buying season. Apple appears to already be making a suitable e-book reader.
The iPod touch looks to be a fine e-book platform and unlike the E Ink screens of the competition, the iPod screen is in color and works in the dark under the blankets without requiring a flashlight. Oh, and it also plays music, games, videos and connects to the Web.
Perhaps it's time for these fixed-content holders to look at the Starbucks deal and figure out how they can leverage the iPod platform and reserve some icon space on the front panel of the iPod touch.