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How Long Until iPods Become ‘Cheap Commodities’?
Thursday, March 2nd, 2006 at 2:00 PM - by Brad Cook
The first iteration of the iPod was a 5GB model that sold for US$400, a cost of $80 per GB. Today, however, the same amount of money buys a 60GB iPod that costs just under $7 per GB. Apple Matters' James R. Stoup looks at the iPod's decline in per-GB pricing since its debut and speculates on where it will go from here. (He left out the mini, shuffle and nano "due to their short existence.")
Using two charts to back up his main points, Mr. Stroup found that each successive generation of the iPod has seen per-GB prices drop, along with a number of technology improvements added, such as color screens, thinner designs and longer battery lives.
Eventually, however, he sees iPods becoming "cheap commodities," at which point he expects Apple will lose market share as competitors take advantage of declining component prices. Mr. Stroup thinks Apple has three to five years to "enjoy a de-facto monopoly in this space."
He wrote: "By the time that happens though Jobs will have hopefully found a new star to hitch his wagon to."
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