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The lowdown on iPod Hi-Fi sales

September 18, 2006

Ever since Apple released the iPod Hi-Fi speaker system at the end of February (’06), I’ve been wondering: Will music lovers dish out $349 for an iPod accessory?

I know a lot of iPod owners who are thrilled with the sound quality of a $150 iPod speaker dock from i-Fusion – would the masses really shell out more than twice that for a $349 set of speakers that doesn’t come with an iPod?

Apparently so.

I called Steve Baker at NPD Group, that master of all retail store data, and he gave me these numbers: The Hi-Fi isn’t about to rule the iPod speaker category, since its 7.8% market share puts it in fourth place behind Bose, Logitech and i-Fusion. (Logitech and i-Fusion have popular speakers that sell for 149 Bose’s system is $299.)

But the Hi-Fi does have this going for it: It’s second only to Bose in revenue share, with 14.5%. Together, Bose and Apple are pulling in half the money consumers are spending on iPod speakers.

Not bad. Apple took a gamble that it could differentiate itself and make money by selling the priciest set of iPod speakers out there. So far, it’s working. Of course, it might work even better at $299, but I wouldn’t hold my breath for Apple to lower the price on this one.