New MacBook Pros are here! Get the lowest prices anywhere: Apple Price Guides updated Aug 21st (exclusive coupons)
 


Wednesday, June 01, 2005, 08:00 am PT (11:00 am ET)

AmTech offers two scenarios for future 2GB flash iPod

Weighing in on recent rumors, American Technology Research this week laid down two possible scenarios for a 2 GB flash-based iPod, which it too believes is in the works at Apple Computer.

Based on the firm's checks and analysis, analyst Shaw Wu said a future 2GB flash iPod from Apple could emerge as either a slightly more advanced iPod shuffle or a new form of iPod mini. In a research note released to clients this week, the analyst leaned towards the former.

According to Wu, a shuffle version of the 2 GB player would boast a small display screen, but would not include a click-wheel or sorting functions. He says the design would be similar to today's iPod shuffle with the addition of a small screen to display song, artist and time information. Based on his checks, Wu believes a player of this kind could be powered by an existing SigmaTel single-chip system-on-a-chip (SOC) and priced profitably at $149 without compromising other members of the iPod family.

On the other hand, Wu said Apple could potentially throw a 2 GB flash chip into an iPod mini that would sport a screen, click-wheel (or possibly scroll-strip), and catalog/sorting functions. However, pricing such a player at $149 may be tough due to the higher-cost of a multi-chip solution from PortalPlayer (controller) and Synaptics (click-wheel), he said. If the player was priced at $199, it would be forced to compete with one of Apple's top-selling iPods: the 4 GB mini. "Either way, we see this product cannibalizing current best-sellers," the analyst concluded.

Still, AmTech research sees Apple's view on storage becoming more agonistic. "Compared to a year ago where Apple's philosophy on flash versus microdrive was clearly in favor of microdrives, we believe Apple has changed its stance," the firm said. Moving forward it's believed that Apple will utilize flash storage in iPods other than the iPod shuffle. The firm notes one of the key reasons behind the move is that Apple realizes there could be a limit to the number of songs a user may want to carry at one time.

Meanwhile, Wu discounted rumors of an imminent 4 GB flash-based iPod, saying prices of 4 GB flash chips have not dropped to a point where it is economical to put them into a digital music player.

Currently, Apple's top two selling iPods are the 512 MB iPod shuffle at $99 and 4 GB iPod mini at $199. Sales of 20 GB iPods and 30 GB iPod photos are also respectable, but sales of 1 GB iPod shuffles at $149, 6 GB iPod minis at $249, and 60 GB iPod photo at $449 continue to lag to their lower-priced versions, the analyst said.

Moving forward AmTech Research sees the iPod mini moving towards a color screen while the 20 GB iPod could be phased out in favor of iPod photos with lower price points.

The firm rates Apple shares "hold" with a $40 price target due to concerns with slowing growth and high investor expectations.