Apple iPod Price Drop: Some Models Reduced 30 Percent

Just hours before Apple is expected to unveil a refreshed iPod product line, Cupertino's online store has slashed the prices of its current iPod models. The most jaw-dropping deal, for example, is the $120 price cut to the 32GB iPod Touch, which is now being sold online for $280. Here's a complete breakdown of the new prices (and you can click on the images below to see the prices listed on Apple's site):

iPod Nano (8GB): $130 down from $150
iPod Nano (16GB): $150 down from $200
iPod Classic (120GB): $230 down from $250
iPod Touch (8GB): $190 down from $230
iPod Touch (16GB): $250 down from $300
iPod Touch (32GB): $280 down from $400

What's Up?

Typically, Apple shuts down its online store during Apple events and then re-opens shortly thereafter displaying whatever new products were introduc

ed by Apple execs. But Apple is also in the habit of pulling discontinued models from its shelves once they've been replaced, and offering older models exclusively in its online clearance section. This time, however, Apple is slashing prices before the event and leaving the older products in the main section of the store. So what's going on here?

Scale of Production

It's entirely possible that Apple has decided to slash iPod prices because it's become

so darn cheap to make them in large numbers. The only problem with that is Apple announced in its most recent quarterly report that it had sold only 10.2 million iPods for that quarter -- a seven percent decline versus the year prior. That's a big decline for one of Apple's most popular products, so it seems unlikely the company would be cutting prices now instead of a few months ago.

Another possibility is that Apple didn't expect such a decline in demand, and now has way too many iPods in stock that the company needs to clear out fast.

iPhone Subsidies

But while iPod popularity was dropping, iPhone sales grew by a staggering 626 perc ent with 5.2 million units sold in Q3 2009. With that many people out there gobbling up iPhones and then downloading apps from the App Store, Apple might be offsetting the lower retail price of the iPod with iPhone revenue. It's also possible that Apple is concerned about how quickly iPod sales are lagging behind the iPhone, and the company is trying to slow that trend down.

Competition

An iPod price cut could also be another jab at Microsoft's brand new touchscreen entertainment device, the Zune HD, which comes in 16GB and 32GB flavors for $220 and $290 respectively. Apple hasn't matched Microsoft's price for the 16GB version, but the 32GB iPod Touch is now $10 cheaper than its Zune competitor.

The Pundits are Wrong

Could it be that Apple's announcement is all about revamped prices instead of revamped hardware? That doesn't seem lik

ely given all the rumors circulating about new iPod Touch models with iPhone-like cameras. But hey, you never know.

Oops!

It's entirely possible that someone at 1 Infinite Loop just made a mistake and spilled the beans a little early. Or maybe these prices were meant for the new models reportedly coming out today? That's unlikely, since today's expected camera-equipped iPod Touches are said to be coming out in 16, 32, and 64 GB versions priced at $199, $299, and $399 respectively.

Expansion

Another far out possibility is that Apple is expanding its iPod lineup to include old and new versions of the iPod Touch, as well as introducing price cuts to its other models. It's hard to know for sure, but I have no doubt Apple will clear all this up in just a few hours.