Apple has cut prices on its low-end music player, the Shuffle, and added a 1GB iPod Nano model. The 512MB Shuffle was dropped from $99 to $69, while the 1GB model dropped to $99 from $129. This was undoubtedly done to make room for the 1GB Nano, which will debut at $149.
After the price cuts were announced, concerns rose over Apple"s profit margins suffering as a result. However, Shaw Wu of American Technology Research doubts these concerns have any merit, citing the decrease in price of the components used in the players, especially the flash memory used in the Shuffle, which has dropped by 70 percent. It is nice to see Apple passing these price drops on to the consumer.
In the United States Apple holds 70 percent of the digital music player market, but only 40 percent internationally.