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Merrill Analyst Still Expects Flash-Based iPod in Early 2005

TMO Reports - Merrill Analyst Still Expects Flash-Based iPod in Early 2005

by , 2:00 PM EST, November 29th, 2004

Merrill Lynch analyst Steven Milunovich reiterated Monday that he still expects Apple Computer to unveil a flash memory-based iPod in the first quarter of 2005.

In a research note obtained by The Mac Observer, Mr. Milunovich wrote that he believed the new device will be priced between US$149 and $199 and that it could possibly be announced at Macworld Expo San Francisco beginning January 10. He made the same prediction back on October 25 in a commentary first reported by TMO.

Mr. Milunovich wrote that the MP3 flash market is five times the size of the hard disk drive-based player market in units and about two times in revenue. It is also fragmented with the leader, Samsung, at only an 8 percent share. The flash MP3 market is expected to be $2.6 billion in 2004, slightly larger than the HDD player market at $2.3 billion. Combined, the music player market could be $8.1 billion by 2006.

"This is a market Apple should want to participate in because it will pull new customers into the iPod/iTunes 'ecosystem,' he wrote. "We believe consumers will hesitate to switch once they become accustomed to the iPod's scrollwheel or have purchased a number of iTunes (which only work on iPods). The land grab is on."

It should be noted that Mr. Milunovich was also the same analyst who predicted the iPod photo would not debut until sometime next year. Instead, it was announced within a week of his original prediction on October 25.

Observer Comments

Show: Subjects Only | Full Comments
Close Name:technoguy100 Posts: 47 Joined: 12 Aug 2004
Subject: It will never happen

Steve Jobs said Apple would never offer a flash-based iPod, and he's one stubborn guy, so I doubt the rumors are correct.

Close Name:Mace Posts: 9604 Joined: 07 Aug 2003
Subject:

Quote
Mr. Milunovich wrote that the MP3 flash market is five times the size of the hard disk drive-based player market in units and about two times in revenue.
Thought hdd is 70% and flash is 30%. In any case, from business perspective, it is necessary for Apple to compete in the low cost 30% of the market. Other than for the money, it will impede the growth of other formats esp WMA.

Even though is flash based, it should still be called an iPod mini.

By the way, SJ did not say he will not offer a flash based iPod. He merely joked that competitors' flash based players are stored in the cupboard and not use.

Close Name:jimothy Posts: 612 Joined: 04 Jun 2004
Subject: Jimothy still thinks analysts are blindly guessing

The Mac Observer reader Jimothy reiterated that he still thinks analysts are blindly guessing. "In truth," he said, "analysts have no better idea of what's coming up than TMO forum participants. They're merely better paid."

Close Name:Small White Car Posts: 1960 Joined: 02 Jul 2004
Subject: Re: It will never happen

Quote
technoguy100 wrote:
Steve Jobs said Apple would never offer a flash-based iPod, and he's one stubborn guy, so I doubt the rumors are correct.


Steve says a lot of things that don't end up being true. Plus, I do think that stuff was more joke than fact. So yeah, a flash-player is possible.

Of course, I also agree with the post that says the analysts don't really know anything either.

So in other words, I have no idea, but it's certainly possible either way.

Close Name:Biff Posts: 1479 Joined: 08 Apr 2004
Subject: Seems logical.

Quote
technoguy100 wrote:
Steve Jobs said Apple would never offer a flash-based iPod, and he's one stubborn guy, so I doubt the rumors are correct.
Could you find a specific quote? Steve tends to make statements like "Apple has no plans to introduce a flash based iPod in the forseeable future." as opposed to "The Earth will be absorbed by the Sun before Apple offers a flash based iPod." Or we could take the example of the iPod photo. Steve always said it was just about the music, but now we have this new iPod that does photos. I think the "iPod Micro" makes sense given the market and Apple's position and I expect to see this as one of the many exciting announcements in Janurary.

Close Name:AyaSofya Posts: 137 Joined: 11 May 2004
Subject: Steve meant Flash not flash

Quote
technoguy100 wrote:
Steve Jobs said Apple would never offer a flash-based iPod, and he's one stubborn guy, so I doubt the rumors are correct.


Skip Intro

I think Steve meant that there would not be a Macromedia Flash based player.

Close Name:Guest
Subject: Thoughts

When you include worldwide sales, the number of flash-based players increase dramatically. The 70/30 numbers, I think, are US-only numbers. So I for one believe that a flash-based player is coming because the ultimate goal is to make Quicktime/MPEG-4 the commercial multimedia standard, not just a paper standard. If QT does become the standard, Apple will sell a lot more servers and Macs. If Windows Media becomes the standard, Apple is dead (oops, invoked the death knell counter!).

By the way, Steve meant it when he said that flash-based players are useless, but left out that it's because they don't have the easy-to-use iPod interface At the time, he also forgot to say that all hard-drive players from other manufacturers are useless as well

Close Name:Guest
Subject:

[quote="Biff"]

Quote
technoguy100 wrote:
I think the "iPod Micro" makes ....


Don't disagree with you. To keep it consistant, it will be called iPod Micro only the first few days, and then Apple will change it to 'iPod micro' and we all will again comment on that

Close Name:Jyakku Posts: 34 Joined: 10 Oct 2004
Subject: Hell has frozen over before.

Well, we all know that hell has frozen over before for Steve Jobs so a flash based player is definately a possibility. Steve has been known to talk about the problems or difficulties with a given situation or technology and then present a new product as the solution to those problems. Whatever Apple comes up with as a flash based player, expect it to be innovative and an "out of the box" solution.

Close Name:Biff Posts: 1479 Joined: 08 Apr 2004
Subject: Market Share

Apple is already making tons of $$$ on the iPod as it stands. At this point they need to fight for dominance in the format wars. I don't think anyone will argue that a $149 flash based iPod would sell like hotcakes and throw the fragmented flash player market into shambles. Apple can use such a player to lock WAY more people into iTunes (and away from WMP).

Close Name:Mace Posts: 9604 Joined: 07 Aug 2003
Subject: Re: Market Share

Quote
Biff wrote:
Apple is already making tons of $$$ on the iPod as it stands. At this point they need to fight for dominance in the format wars. I don't think anyone will argue that a $149 flash based iPod would sell like hotcakes and throw the fragmented flash player market into shambles. Apple can use such a player to lock WAY more people into iTunes (and away from WMP).
Totally agreed. Once Apple dominated the music format, they can parlay this dominance into dominance of video/movie format.

A flash-based iPod is also a better platform for adding features like WIFI, BlueTooth, phone functionalities, radio, ... because of power requirements, size, weight, heat and cost considerations.

Close Name:Guest
Subject: iPod Flash

I would love to see,and purchase a flash based player with removable media. Sell a base player with 64 mg@ 149.00 but have the option of interchangable playlist/flashcards.Compact Flash/Micro-drive would be perfect.
Just a thought.

Close Name:Mace Posts: 9604 Joined: 07 Aug 2003
Subject: Re: iPod Flash

Quote
Anonymous wrote:
... have the option of interchangable playlist/flashcards.Compact Flash/Micro-drive would be perfect...
I am hoping for that too.

Close Name:Guest
Subject: Jason Pflaum

According to appleinsider the sigmatel flash ipod is a done deal. Apple is just holding the "official" news till macworld. Jason Pflaum would not make this up. He is a well respected analyst. This "buzz" is just part of the corporate game.

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