iPod Nano steals the show, live from SF

Michael Gartenberg | September 07, 2005, 09:54 AM

Lots of buzz and excitement here in SF and of course the phone is ringing off the hook. The big news here in SF wasn’t so much the iTunes phone but rather the iPod Nano. The phone was pretty much what was expected, it’s a 512mb phone, that’s iTunes capable. No over the air downloads, just the same side load experience as your average iPod. Even the form factor wasn’t news, it’s the same design Steve Jobs showed at the last keynote, there was no mystery here, just what we were pretty much expecting. I’m also not thrilled that there’s a capacity maximum of 100 songs. As we’ve pointed out in the past, the strategy is to complement the iPod contextually and not compete with it and that’s what Apple and Motorola have done. What’s different about this music phone is that it has a pedigree no other device has, namely the iTunes brand and that will serve as a powerful differentiating factor in the market even where there might be more compelling products for consumers.

As for the Nano, that’s what caused the most buzz and excitement here. Clearly, Apple meant that bit about 1,000 songs in your pocket again (and as my colleague David Card pointed out, that’s change pocket, literally). Pictures do not do this device justice. The form factor is amazing, this clearly fits in our mobile taxonomy in the invisible space. But it’s a real iPod, with scroll wheel and a beautiful hi-res color display. The dock connector is the same so all the key accessories will work just fine with it. With the integration with Outlook with iTunes 5.0 and the small size, I can even see folks using this as a personal information manager. With all the buzz around devices like the RAZR, there’s no doubt in my mind that the market is going to go for this product in a big way. Apple’s price points work rather well (remember that the mini came in at the same price point) with the incentive to always upsell to the next level. Remember, the Nano is about form as well as function. Think folks won’t pay for form? Just look at how many RAZRs Apple’s partner Motorola sold. At this price point, the Nano isn’t the cheapest 4gb player but that’s not what this product is about. At the moment, there’s nothing else like it on the market.

The real question is with a $199-$249 price for the Nano and a form factor that’s so small and elegant, you could carry it and a RAZR in your pocket without noticing either, who is the market for the iTunes phone?