What's smaller and lighter than a pack of gum and costs US$150 less than an iPod mini? Apple's (Nasdaq: AAPL) 
new iPod shuffle.
Apple CEO Steve Jobs introduced a $99 version of the company's popular digital music player at Macworld Expo today, making it the most affordable iPod ever. The new music player, which uses cheaper flash-memory, is available in two models: 512 MB holding up to 120 songs for just $99 and 1 GB holding up to 240 songs for just $149.
Based on a new shuffling feature, the latest addition to the iPod family works with iTunes' patent-pending AutoFill feature to let users automatically select songs from their music library or playlists. One click of the mouse fills up the iPod with a user's favorite tunes. A lanyard allows the user to wear the machine around his or her neck.
Low Price Strategy
"With most flash-memory music players, users must use tiny displays and complicated controls to find their music; with iPod shuffle, you just relax and it serves up new combinations of your music every time you listen," Jobs said of the fourth-generation iPod.
Jupiter Research analyst Joe Wilcox told MacNewsWorld that the lower-priced iPod is part and parcel with Apple's new mass market strategy that also includes the new $499 Mac Mini. He said the lower price point could boost sales of the already best-selling digital music player.
"Yesterday you had a $249 iPod [mini] as the entry level player. Now you can get one for $99," Wilcox said, noting that the lower price could cause people who might not have purchased an iPod yesterday to go out and buy one tomorrow.
The iPod shuffle doubles as a portable USB flash drive with up to 1 GB of storage 
space to back up personal files and exchange them between computers. However, Wilcox said it's not merely the innovative features that have sold more than 10 million iPods to date.
Built for Speed
"IPod is successful for a lot of reasons. The features are attractive and the synchronization is easy," Wilcox said. "But there's also another key reason: distribution. You can buy an iPod in a lot of different [general consumer electronics] stores."
Speaking of distribution, Apple also announced today that is has teamed up with Mercedes-Benz USA, Volvo, Nissan, Alfa Romeo and Ferrari to deliver iPod integration with their car stereo systems in 2005.
The iPod Integration Kit for Mercedes-Benz will debut this April in the U.S. with the newly redesigned 2006 Mercedes-Benz M-Class, and Volvo will offer two iPod connectivity options for their entire 2005 U.S. model line.
Meanwhile, Nissan, Alfa Romeo and Ferrari will announce details of their iPod integration later this year. These companies join BMW and Mini Cooper, which began providing integrated iPod offerings in 2004.
Piling On
"Almost every car company in the world is working to integrate iPod into their cars in 2005," Philip Schiller, Apple's senior vice president of Worldwide Product Marketing, said. "iPod customers want to take their entire music collection with them everywhere they go, including their car, so we're excited to be able to work with so many leading automotive companies to provide customers with integrated solutions."
Wilcox likes Apple's marketing tactics in the automobile industry and said it can only help iPod sales in the coming months. He did have one
lighthearted question, though. "When are they going to start giving iPods away with those cars as a sales incentive?" he asked. "Will we soon hear 'Buy that new Mercedes and get a new iPod for each member of your family'?"
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