PriceSCAN Blog

However, there may be a few problems with this analysis. First,"comparably priced" is a relative term. That 4 GB Nano is currently offered for just under $225 by merchants on this site, a discount of 10% to the e280's proposed price. Further discounting of this mature product is entirely possible, and so is the addition of a few more gig of flash. More significantly, for just under $275, vendors are offering the Apple iPod Video 30 GB – 5G, the fifth generation video iPod. True, that 30 GB isn't flash memory, and form factor is, well, a factor. But that iPod has almost four times the storage capacity of the e280, and, if its cult status is any indication, few seem to regard it as overly bulky. And of course that 30 GB buys you a lot more squinting at tiny videos. Much as I might like to see some robust competition in the MP3 player space, if SanDisk's new value proposition is as reported, it hardly seems to blow Cupertino's offerings away. And indeed, the Journal notes that SanDisk's gain in market share has come at the expense of other non-iPod MP3 players; barely a dent has been made in Apple's sales, which stand at just over three quarters of the market.

It's worth noting that SanDisk is reportedly cutting the prices of its other MP3 players, presumably including the Sansa e260 (top image below), by almost 30%. That will make an already attractive line more appealing to consumers in the approaching holiday shopping season. And in a time of gas-constricted budgets, a lower price point can only help SanDisk's competitiveness.

In the final analysis, Apple's iPod, elegantly supported by the firm's online content distribution, presents a formidable citadel, the storming of which may require much more than marginal, let alone debatable, discounts. Yet SanDisk's moves, and the potential emergence of competitors to iTunes, do raise the question of how long Apple's market position and/or profit margin can withstand the forces of commoditization in the portable player market. But in a world where many of next year's new car models will sport built-in proprietary iPod connectors, Cupertino seems to have a fair bit of "lock-in" effect on its side.