Apple slashes iPod price by 25 percent, introduces new colors


Apple has taken its iPod Touch and has reintroduced it at lower prices, after sales of Apple's flagship music player has continued to slide year over year.

The once-iconic iPod Touch, which was priced at $399 for its 64GB model, is now selling by 25% less for $299. The 32GB variant is now down by 17% to $249 and the entry-level 16GB iPod Touch, which sold for $299 when it was launched in September last year, is now down $100 to $199.

The 16GB model is also up for some serious renovations, starting with an under-the-hood update to an A5 processor similar to the ones that power the higher-end variants. It will also come equipped with a 5-megapixel iSight rear camera capable of taking 1080p high-definition videos and a 1.2-megapixel front-facing camera for FaceTime. Previously, the 16GB fifth-generation iPod Touch only came in silver and black, but Apple has decided to give more color choices, including space gray, silver, blue, pink, yellow and the exclusive (Product) red. Apple donates a portion of (Product) red sales to the Global Fund to help ease AIDS in Africa.

The iPod Touch runs on iOS 7 but can be upgraded to iOS 8 once the latest platform comes out. It looks and works very much like an iPhone with its 4-inch Retina touchscreen display but without the messaging and calling capabilities. Users can browse the Internet, send and receive email and download apps and games in the same way they can do these things on their iPhones.

Apple introduced its first-generation iPod Touch almost seven years ago and it has become Apple's answer to the growing interest in small, cheap and portable netbooks.

"For Apple, the iPhone and iPod Touch are a way to provide Web-access devices to the rest of the world. And it prevents them from cannibalizing their MacBook lines," said analyst Ezra Gottheil of Technology Business Research in 2008.

However, the increasing popularity of iPhones has left sales of the iPod Touch growing stale as people have moved their music from their music players to their smartphones. In its first-quarter earnings report this year, Apple announced that it sold 2.7 million iPod Touch units, a 51% drop from the same period in 2013. Once a reliable revenue machine for Apple, the iPod contributed only $461 million to the company's overall yearly revenue of $45.6 billion. That amounts to only 1% of Apple's total earnings.

As if that wasn't enough, the figures seem to be growing grimmer for the iPod, which accounted for 2.2% of total Apple sales in 2012, a huge drop from the 13% it enjoyed in 2011.

"I think all of us have known for some time that iPod is a declining business," said Apple chief executive Tim Cook during the company earnings call in January. 

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