Pricing down the music phone
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Today Sony Ericsson released its initial line-up of new phones for the year, unveiling six sleek new camera and multimedia phones, including the first Walkman music phone targeted at the mass market. Or so it claims--the company didn't reveal any pricing details for the new W300i.
Presumably the new clamshell device will sell in the $200 range, placing it under Sony Ericsson's next-tier device, the W600i, which retails for about $300, and matching Motorola's new iTunes-powered SLVR, which Cingular is now selling for $200 with a two-year contract. Normally I don't use this column to discuss individual phones, but the circumstances today are a little different. Basically, we're starting to see the first evidence of handset vendors pricing their music phones into the mid-tier range, creating a viable alternative to the Apple's many-layered iPod portfolio. A 1-GB iPod Nano now retails for $150, which is still presumably cheaper than the 512 MB SLVR and then whatever price Sony Ericsson lists for the 256 MB W300i. But the handset vendors are getting crafty, installing expandable memory slots that could add GBs of memory for $50.
It's not quite equilibrium, but as Apple and other manufacturers scale the digital music player down and handset vendors scale up their memory and playback capabilities, they're bound to meet in the middle very soon. Apple so far has been reluctant to put the full capabilities of the iPod into the Motorola devices it lends the iTunes software to, but soon it won't make a difference. Customers will be performing their own calculations when buying a new phone: "For $100 more I can get the equivalent of an iPod Nano?" They'll buy it whether it has the Apple name on it or not.
Now here's the self-promoting pitch: Telephony is running a story about this very phenomenon, and how carriers are reacting to it, in Monday's issue. So look for it.
E-mail me at KFitchard@prismb2b.com.
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