Apple (AAPL) introduces bigger versions of the iPod and iPhone

Posted Feb 5th 2008 1:05PM by Michael Fowlkes
Filed under: Products and Services, Consumer Experience, Apple Inc (AAPL)

For the second time in the past six months, Apple Inc. (NASDAQ: AAPL) has mixed things up by introducing new versions of the iPod and iPhone. The new versions come with increased memory, but of course, they also come with a higher price tag.

The new iPhone boasts a 16-gigabyte memory, and the iPod touch will now be available with 32-gigabytes. Both of the new devices will have a nice fat $499 price tag. With the added memory, the new iPods will be able to store roughly 7,000 songs, and you will be able to keep about half that amount on the enlarged iPhones.

With iPod sales growth slowing lately, introducing these new higher priced items could really help the company. During its most recent quarter, iPod sales growth slowed to 5%, down from 17% during the previous quarter. Despite the falling sales growth, the company still saw a 17% jump in the period. This compares with only 3.8% the previous quarter.

The reason why profit jumped so much despite the lower sales growth was that buyers, while buying fewer iPods, were buying the pricier models. Perhaps this is what Apple is counting on will happen once again with the new $499 iPods.

Both the new iPods and the new iPhones are available immediately. You can find them on Apple's website, as well as in Apple retail stores.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.

DISCLOSURE: Mr. Fowlkes owns and/or controls diversified portfolios of long stock and option positions that include holdings in AAPL.

Tags: AAPL, Apple, inthenews, iPhone, iPod