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Analysis: Lack of Video in 2G iPod nano a Surprise

Wednesday, September 20th, 2006 at 1:55 PM - by

A teardown analysis of a 4GB second-generation iPod nano reveals a US$72.24 bill of materials (BOM) cost, less than the $89.97 cost for a first-generation 2Gb iPod nano, according to a report issued by iSuppli on Wednesday. In a press release, the research firm noted surprise that the new Samsung system-on-chip, which replaced the previous one from PortalPlayer, lacked video capability.

The development "is somewhat surprising, given that Apple rivals, most notably SanDisk Corp., are moving quickly to add video capability to flash-memory-based players," iSuppli said. "That lack of video support also may partly explain why the new hard-disk-drive based iPod continues to utilize the same combination of PortalPlayer and Broadcom Corp. chips."

Chris Crotty, a senior analyst with iSuppli, noted: "At a minimum, Apple needed this minor product refresh to support the launch of iTunes movie downloads and to prepare for the introduction of Microsoft Corp.'s competing Zune player. But the latest iPod falls very short of being a true video-centric player needed by consumers who want to watch movies, and not just short-form video."

Mr. Crotty said that Apple could still have new iPods up its sleeve and ready for launch before the holiday season, or perhaps in time for the release of the upcoming device codenamed "iTV." iSuppli observed: "Apple's delay in adding video to its flash-memory-based based players and its launching of a new design for its flagship iPod suggest that the company is shifting its focus from portable MP3 players to the living room. Such a shift also could signal Apple's confidence in its leadership position within the MP3 player market."

The company added: "As iSuppli's nano teardown reveals, Apple undoubtedly is continuing to use that position effectively to manage suppliers to develop products that deliver both high consumer value and enviable margins."

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A guest said: (hide)

Wed Sep 20, 2006 2:08 pm

Does it even need to be said that watching video on a Nano's screen would be completely riddiculous and that saying others like SanDisk are 'moving quickly to add video to flash players' is because the 'others' are looking for any possible way to say how they are different from an iPod? Even if the feature they are adding isn't on the iPod for a reason?

Analysts are the new comedians. Or village idiots. Can't decide which.

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A guest said: (hide)

Wed Sep 20, 2006 2:12 pm

The pricepoints for the 8GB Nano and the 30GB video iPod are the same: $249. It seems that at that price, Apple is giving you two options, a smaller lighter music only player, and the larger video capable player, and assuming that will satisfy most people's needs.

One question is if photos are supported on the Nano. It would seem though that if they aren't video capable, they won't be photo capable either, which would be too bad, but I suppose it would be hard to see pictures on the small screen of the Nano.

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Mav said:

member since 17 Oct 2003 with 1320 posts, unranked, send him a message or view his profile

Wed Sep 20, 2006 2:24 pm

One word: Eyestrain.

Still, if the customers demand it enough, Apple will at some point listen. I'm guessing the operative word is "customers," not "pundits," "reviewers," "analysts," "bloggers," and the like.

Oh, and Mr. Crotty -- if PMPs are the future, and they've been out for at least a year, why is iPod share still holding as steady as it is? You'll get your "true" video iPod when Apple's good and ready.

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algr said:

member since 07 Aug 2003 with 296 posts, unranked, send him a message or view his profile

Wed Sep 20, 2006 2:30 pm

I think the Nanos were always photo capable.

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Small White Car said:

member since 02 Jul 2004 with 1960 posts, unranked, send him a message or view his profile

Wed Sep 20, 2006 2:45 pm

algr wrote:
I think the Nanos were always photo capable.

They were and, yes, it is hard to see the photos. I'm pretty sure you can display them on a TV screen with the right cable, however. I think that's about the only way that nano photos make any sense at all.

So that means video on a nano screen would be pretty useless too.

Not to mention the fact that there would probably have to be a whole different computer chip in there for decoding H264 and the other video formats it plays. I'm certain it would make the nano larger and probably $50 more expensive as well.

No thanks. As someone else said, they have an iPod that does that if you want it!

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A guest said: (hide)

Wed Sep 20, 2006 3:06 pm

I have to agree with the research firm... I was suprised/disappointed that the 2G Nano did not support video, and the fact that it doesn't was the deal-breaker for me regarding possibly buying one.

Yeah, yeah, I know... "But it'a 1.5" screen! Do you want to go BLIND!?!" To that I say 'whatever' for two reasons:

1) It wouldn't have been a stretch for Apple to upsize the Nano's screen a bit. Make the Nano a fraction wider, a fraction shorter, and make the screen take up every millimeter of the face's width that's possible. You could have a 2" screen on a Nano without making it significantly larger. Still small, but very watchable, as anyone who's watched video clips on some of the better/larger screen cell phones can attest.

2) I wasn't planning on watching feature-length MOVIES on the thing, for crying out loud. TV shows are fine... Battlestar Galactica runs 40 minutes. Grey's Anatomy (if they ever get it)... same thing. I can deal with that on a 2" screen, easily.

Now, the next thing out of the 'Apple can do no wrong' herd will be the following: "So, just buy a 30 gig then! Its the same price as the 8 gig Nano, after all." Yeah, but here's the deal: I don't WANT the 30 gig. Its too big, too bulky, and it's HD isn't going to be as durable as the Nano's flash memory. I work out a lot, and the HD-based Mini I used to take to the gym got beaten down after awhile and started skipping a ton eventually. You DON'T WANT a HD player in the gym, trust me on this, I know from experience.

So, if I want ONE player that can 'do it all' (light video use, very durable, compact), that would've been the 2G Nano, IF it had only done video. But it didn't, so I'm still lookin'.

Hey Steve, how about a 2.5G Nano soon with a 2" screen and video-capability? Bet you'd have to beat the customers back with a stick. I hope SanDisk or Sony or someone doesn't make a player like that before you do, as I'd prefer to purchase an Apple product.

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A guest said: (hide)

Wed Sep 20, 2006 3:16 pm

Hmm... yeah, as iSuppli noted, it's kinda crazy that Apple's trying to build up the Movie section of the iTunes store, yet most of its iPod lineup can't even play video.

Wacky, yes?

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mrmgraphics said:

member since 05 Sep 2003 with 825 posts, unranked, send him a message or view his profile

Wed Sep 20, 2006 3:43 pm

+

After using my own 5.0G iPod (30GB, white), and seing the 1.0G nanos (of which the 2.0G are pretty identical, dimensionally, and absolutely identical in terms of screen size), I must side with Apple on this one. I absolutely can't imagine watching video on anything smaller than my 2.5" screen. And even that's stretching it.

On top of screen size, there's storage capacity. With movies averaging 1.5GB, three movies would already wipe out over half of the storage on a nano, whereas it doesn't make much of a dent in a 30GB iPod (let alone 80GB model).

And if screen size and storage weren't reason enough to keep video off of the nano, has anyone considered battery capacity? How much playing time could you even get from a nano-sized battery? Granted, the nano doesn't have a spinning hard drive draining juice during playback, but having a backlit LCD display on while watching movies would no doubt be a major power drain on a very small battery. I just don't see it.

The iPod lineup is very versatile, covering major price points, form factors, and functionality. I know many people who prefer the nano for its small form factor and uber-coolness. I opted for the 5G iPod because of the far greater storgage and video capabilities. Is there really a need to bridge the gap between the two, even assuming (which I don't) that its even technologically feasible? I doubt it. Besides, Apple is smarter than that, and knows enough die-hards, torn between the nano and 5.5G iPod, will opt for one of each.

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A guest said: (hide)

Wed Sep 20, 2006 4:50 pm

No offense, but I doubt Apple is too worried about you jumping ship. You see Apple knows that your position represents a very small portion of the market. It is not trying to please everybody because that is not possible. Instead, it's likely goal is to put out products that will be good enough for most people. It knows a certain amount of people will buy product from competitors.

Apple has to differentiate its various iPod products and make them enough differnet to make sure one product does not cannabolize another's sales. If it does not, Apple will have to eat the cost of an over abundance of inventory for product that is not moving. It will also delay new product as Apple struggles to clear inventory. Making the Nano good enough to display video would likely take sales away from the low end iPod. Apple is not going to take that risk.

After all, why would I buy the iPod if I could comfortably watch videos on a Nano that has a much larger hardrive then the one found on the iPod? I wouldn't.

I also suspect that the latest updates to the Video iPods are only meant to get Apple's through the holiday season. The next round of updates will make the Video iPod flash based as well.

I also doubt you are sincere. If you really wanted to watch video on an iPod you'd buy an iPod. For the gym, a shuffle should surffice. In other words, you should buy two devices to meet your various needs.

Guest wrote:

Now, the next thing out of the 'Apple can do no wrong' herd will be the following: "So, just buy a 30 gig then! Its the same price as the 8 gig Nano, after all." Yeah, but here's the deal: I don't WANT the 30 gig. Its too big, too bulky, and it's HD isn't going to be as durable as the Nano's flash memory. I work out a lot, and the HD-based Mini I used to take to the gym got beaten down after awhile and started skipping a ton eventually. You DON'T WANT a HD player in the gym, trust me on this, I know from experience.

So, if I want ONE player that can 'do it all' (light video use, very durable, compact), that would've been the 2G Nano, IF it had only done video. But it didn't, so I'm still lookin'.

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A guest said: (hide)

Wed Sep 20, 2006 5:22 pm

Guest wrote:
No offense, but I doubt Apple is too worried about you jumping ship. You see Apple knows that your position represents a very small portion of the market. It is not trying to please everybody because that is not possible. Instead, it's likely goal is to put out products that will be good enough for most people. It knows a certain amount of people will buy product from competitors.

No offense, but I believe that's just rationalization/wishful thinking. I honestly doubt that wanting video on a flash-based player represents a "very small portion of the market" either. But if you doubt this, let's have Apple NOT release such a product for a year, while its major competitors do. Let's examine the loss of marketshare at that point. You may be singing a very different tune then.

Guest wrote:
Apple has to differentiate its various iPod products and make them enough differnet to make sure one product does not cannabolize another's sales. If it does not, Apple will have to eat the cost of an over abundance of inventory for product that is not moving. It will also delay new product as Apple struggles to clear inventory. Making the Nano good enough to display video would likely take sales away from the low end iPod. Apple is not going to take that risk.

Unfortunately, companies that are not willing to "cannibalize" (correct spelling) their own products will find that other companies will only too gladly do it for them. Remember Sony? They lost the portable music player market because they were not willing to shoot their own sacred cows. Apple should not follow that example.

Guest wrote:
After all, why would I buy the iPod if I could comfortably watch videos on a Nano that has a much larger hardrive then the one found on the iPod? I wouldn't.

Hard to know what you're even saying here. The Nano doesn't have a hard drive, large or otherwise. Also, why would Apple care if you bought an iPod or a high-end Nano? They're the same price.

Guest wrote:
I also suspect that the latest updates to the Video iPods are only meant to get Apple's through the holiday season. The next round of updates will make the Video iPod flash based as well.

Doubtful. Flash memory has come down in price a lot, but to make even the 30 gig iPod flash-based is wishful-thinking, as it would add roughly $200 (at least) to its price with no storage capacity increase. Not going to happen for a good long while.

Guest wrote:
I also doubt you are sincere. If you really wanted to watch video on an iPod you'd buy an iPod. For the gym, a shuffle should surffice. In other words, you should buy two devices to meet your various needs.

Not to be rude, but my sincerity isn't yours to question. I really do want to watch video on an iPod, but a smaller, durable/flash-based iPod, i.e. a Nano-style device. This isn't odd or a stretch by any means, save in your mind. And no, it makes no sense for me to buy two devices to accomplish this, especially considering that Apple's competitors are starting to add video capabilities to their flash-based players.

Now... what was so hard to figure out about all that again? :sigh:

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A guest said: (hide)

Wed Sep 20, 2006 5:29 pm

mrmgraphics wrote:
I know many people who prefer the nano for its small form factor and uber-coolness. I opted for the 5G iPod because of the far greater storgage and video capabilities. Is there really a need to bridge the gap between the two, even assuming (which I don't) that its even technologically feasible? I doubt it.

Besides, Apple is smarter than that, and knows enough die-hards, torn between the nano and 5.5G iPod, will opt for one of each.

Or a competitor's product that successfully bridges the gap/splits the difference, eh?

Why give SanDisk, Sony, Creative et al any kind of wedge at all?

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Bosco said:

member since 03 Jun 2002 with 1002 posts, unranked, send him a message or view his profile

Wed Sep 20, 2006 6:30 pm

What about the midget market? Did anyone watch Nip/Tuck last night? For that man nurse, a 5G iPod would be like carrying around a television set. Heck, for diminutive Iranian President Mahmoud Ahmadinejad, even the little Nano is probably a challenge to his manhood. He seems more like an iPod Shuffle guy to me, but with the price of oil going where it is, he'll probably only be able to afford a 80s style Sony Walkman knock-off.

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Brutno said:

member since 28 Aug 2002 with 198 posts, unranked, send him a message or view his profile

Wed Sep 20, 2006 6:48 pm

Guest wrote:
I have to agree with the research firm... I was suprised/disappointed that the 2G Nano did not support video, and the fact that it doesn't was the deal-breaker for me regarding possibly buying one.

...snip...

2) I wasn't planning on watching feature-length MOVIES on the thing, for crying out loud. TV shows are fine... Battlestar Galactica runs 40 minutes. Grey's Anatomy (if they ever get it)... same thing. I can deal with that on a 2" screen, easily.

So, Apple should have a TV-enabled Nano? I can just hear the crying now - I want my TV-Nano to play movies! Apple's been through a model proliferation scenario that nearly killed them and confused the customer. Simplify is the mantra.

Too many models leads to too much inventory which leads to pundits that claim iPod sales/popularity myths. I think they did just fine for an interim upgrade. (my opinion)

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A guest said: (hide)

Wed Sep 20, 2006 6:54 pm

Brutno wrote:
Guest wrote:
I have to agree with the research firm... I was suprised/disappointed that the 2G Nano did not support video, and the fact that it doesn't was the deal-breaker for me regarding possibly buying one.

...snip...

2) I wasn't planning on watching feature-length MOVIES on the thing, for crying out loud. TV shows are fine... Battlestar Galactica runs 40 minutes. Grey's Anatomy (if they ever get it)... same thing. I can deal with that on a 2" screen, easily.

So, Apple should have a TV-enabled Nano? I can just hear the crying now - I want my TV-Nano to play movies! Apple's been through a model proliferation scenario that nearly killed them and confused the customer. Simplify is the mantra.

Too many models leads to too much inventory which leads to pundits that claim iPod sales/popularity myths. I think they did just fine for an interim upgrade. (my opinion)

Umm... TV vs movie is a total non-issue. How in the world would a player distinguish between movie downloads and TV show downloads from the iTunes store, and then only be able to play one or the other? The only real diff is file size, and the Nano has more than enough storage to hold a movie (or several).

What the guy was saying was that for the purposes of his eyeballs not hurting, he'd probably watch TV shows mainly, because they're shorter.

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A guest said: (hide)

Wed Sep 20, 2006 7:04 pm

'How in the world' might've been a bad way to put it. 'Why in the world' would be more accurate.

Let's face it, there's zero reason to make an iPod that only plays TV shows but doesn't play movies, or vice-versa. In fact, its so ridiculous that you never even hear about it as an issue. iPods will obvoiusly play video, or they won't, regardless of whether its a TV show or a movie.

So why use TV show vs movie as a phony pretext to an argument that it'd make the iPod lineup too complicated? It wouldn't.

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A guest said: (hide)

Wed Sep 20, 2006 10:06 pm

You think the lawsuits over the iPods volume was an issue, imagine all the lawsuits from people trying to watch a movie on a nano's screen, lets be real, whats the point of watching movies on such a small screen from a device with such limited storage space anyway. The iPods screen is still on the small side from my point of view but thats just my two cents. I own a 1G Nano and never even considered viewing photos on it due to the screen size. I saw a device recently that plugs into the iPod video that will give the viewer the experience of a 42" screen, great idea but $499 is a bit steep. It appears that most people want an all in one solution in a small package, mp3 player, phone, camera, video player, video game console. Give it time it will come (iPhone anybody?), I'm sure your optometrist will love you too! And god forbid you give one to your child, you may want to bond with them now, you may never see them again!

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A guest said: (hide)

Thu Sep 21, 2006 8:45 am

Movies on a 4G Nano? Fuggitaboutit! There is no way I can store my music and photos on it and still have room for even 1 movie or a couple of shows. I don't need or want movies, if I did, I would buy the 30G iPod and that nifty little Shuffle for the gym.

I want music and photos and I bet there are a lot of people who feel the same. Apple is going to sell a LOT of these suckers regardless. And to the guy who thinks Apple needs to crush the competition, to not allow even a "wedge", why? They don't HAVE to be a monopoly to be successful. Let the other manufacturers fill in the nooks and crannies of the market niches, why the heck not? Let a thousand flowers bloom and a thousand players flourish. As long as Apple makes a profit, what is the big deal? If you don't like what Apple has to offer, don't buy Apple, how hard is that to figure out?

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A guest said: (hide)

Thu Sep 21, 2006 10:50 am

I don't know about these guys, but I personally would like to watch TV shows and music videos on a Nano. And at 500 MB a pop, even with the upped resolution, the new Nanos can hold several or even a dozen 'hour-long' TV shows, easily.

Even if its a feature that some won't use, many others will. Here's hoping Apple wises up and includes it in the future.

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mrmgraphics said:

member since 05 Sep 2003 with 825 posts, unranked, send him a message or view his profile

Thu Sep 21, 2006 10:59 am

+

Guest wrote:
Movies on a 4G Nano? Fuggitaboutit! There is no way I can store my music and photos on it and still have room for even 1 movie or a couple of shows. I don't need or want movies, if I did, I would buy the 30G iPod and that nifty little Shuffle for the gym.

Agreed. And if Guest's nano's storage would be squeezed by a movie, what about someone with a silver 2G 2GB nano? A single movie would wipe out 75% of the storage space; two movies could never fit. So to all those who want movies on a nano, what would you have Apple do? Say movies could only be on the 8GB nano, but not the 4GB or 2GB?

That wouldn't be a simple product matrix, and as Brutno pointed out, model proliferation is the last thing Apple needs (or customers want).

Finally, for those who feel Apple needs a "wedge" device...I'd argue they just released one. The 5.5G (30-80GB) iPod. It is a perfect wedge between the music-only nano, and the iTunes-streaming iTV. One (the nano) is the ultimate in portability, but only plays music. One (iTV) is the ultimate in home theater, streaming every scrap of your iTunes content through your home entertainment system. One (the 5.5G iPod) is the perfect wedge between accessing all iTunes content (iTV) and portability (nano).

Think about it....

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geoduck said:

member since 30 Dec 2003 with 1922 posts, unranked, send him a message or view his profile

Thu Sep 21, 2006 11:58 am

Quote:
I don't WANT the 30 gig. Its too big, too bulky, and it's HD isn't going to be as durable as the Nano's flash memory. I work out a lot, and the HD-based Mini I used to take to the gym got beaten down after awhile and started skipping a ton eventually. You DON'T WANT a HD player in the gym, trust me on this, I know from experience.

So, if I want ONE player that can 'do it all' (light video use, very durable, compact), that would've been the 2G Nano, IF it had only done video. But it didn't, so I'm still lookin'.

You are correct on all counts, except I disagree with your reasoning. The iPod is too big and bulky and depending on what you are doing for exercise can be a bit fragile. The disagreement I have with your argument is on two counts. First if you are exercising strenuously enough to damage a regular iPod I seriously doubt that you would find video on the Nano's small screen, or even a full iPod screen for that matter, watchable. The details are just too small to see unless you are fairly still. The other point we differ on is that Apple should make an iPod that does everything. It would be nice for us but it is in Apple's interest to have everyone own not one but several iPods for different occasions. One ideal iPod for all occasions would be nice for us but not as nice for for Apple's bottom line.

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A guest said: (hide)

Thu Sep 21, 2006 12:06 pm

geoduck wrote:
Quote:
I don't WANT the 30 gig. Its too big, too bulky, and it's HD isn't going to be as durable as the Nano's flash memory. I work out a lot, and the HD-based Mini I used to take to the gym got beaten down after awhile and started skipping a ton eventually. You DON'T WANT a HD player in the gym, trust me on this, I know from experience.

So, if I want ONE player that can 'do it all' (light video use, very durable, compact), that would've been the 2G Nano, IF it had only done video. But it didn't, so I'm still lookin'.

You are correct on all counts, except I disagree with your reasoning. The iPod is too big and bulky and depending on what you are doing for exercise can be a bit fragile. The disagreement I have with your argument is on two counts. First if you are exercising strenuously enough to damage a regular iPod I seriously doubt that you would find video on the Nano's small screen, or even a full iPod screen for that matter, watchable. The details are just too small to see unless you are fairly still. The other point I differ with you on is that Apple should make an iPod that does everything. It would be nice for us but it is in Apple's interest to have everyone own not one but several iPods for different occasions. One ideal iPod for all occasions would be nice for us but not as nice for for Apple's bottom line.

Uhh... why would he watch movies while working out? Wouldn't he listen to MUSIC while working out, and then watch video while not working out? I guess I don't see the particular nit you're trying to pick here.

The second point you make honestly makes no sense to me. It seems to argue that we should all just suck it up and buy several iPods. I guess that's great if you're in Apple's marketing department, but as Joe Consumer, ummm, I'm gonna say 'no' on that. Okay?

What's next? An argument that we should all willingly pay the $5000 'Additional Dealer Markup' on all cars, just because its good for the dealer's bottom line? Ugh.

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A guest said: (hide)

Thu Sep 21, 2006 12:15 pm

mrmgraphics wrote:
+

And if Guest's nano's storage would be squeezed by a movie, what about someone with a silver 2G 2GB nano? A single movie would wipe out 75% of the storage space; two movies could never fit. So to all those who want movies on a nano, what would you have Apple do? Say movies could only be on the 8GB nano, but not the 4GB .

Well, there's this thing called iTunes. I hear its really user-friendly and makes it pretty easy to swap out content on your iPod whenever you feel like...

Seriously, its a non-issue. So only one movie would fit on your 2 GB Nano... so what? You swap stuff in and out. Or buy a 4 or 8 GB if you don't want to swap so much.

If anything, video capability on the Nano is a GREAT thing for Apple's bottom line, as it encourages the buying of higher-end Nanos, for the additional storage!!

*Apple stockholders in the crowd gasp as they suddenly realize that video Nanos actually ARE a good idea*

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geoduck said:

member since 30 Dec 2003 with 1922 posts, unranked, send him a message or view his profile

Thu Sep 21, 2006 1:55 pm

Anonymous wrote:
Uhh... why would he watch movies while working out? Wouldn't he listen to MUSIC while working out, and then watch video while not working out? I guess I don't see the particular nit you're trying to pick here.

I may have been mistaken but Guest's original note seemed to imply that he wanted a video capable iPod for when he was exercising.

Quote:
The second point you make honestly makes no sense to me. It seems to argue that we should all just suck it up and buy several iPods. I guess that's great if you're in Apple's marketing department, but as Joe Consumer, ummm, I'm gonna say 'no' on that. Okay?

Guest's argument seemed to be that it would be better for Apple if they made a video capable Nano. IMO from Apple's point of view they prefer that everyone own several iPods for different uses so they make more money. Personally I think a 8-10Gb video capable flash based iPod would be great. I don't see Apple doing it until it costs no more, preferably less, to produce than HD based units, and/or when there is some device that challenges their dominance of the market.

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