Onkyo and Apple

Onkyo released a tantalizing bit of news on February 25: Sometime before summer, it intends to release a remote interactive dock (RI) for "specified iPod models and many of the Onkyo products (as many as five million worldwide) produced over the past 10 years."

Details are scanty, but here's what we do know: Over the last decade or so, Onkyo, like most mainstream electronics companies, has emphasized inter-operability features, such as built-in RI capabilities, which command separate components through a single remote control. Press the "play" icon in the CD section of your Onkyo remote and the system will automatically switch the receiver's input to CD and start the player. The new iPod RI dock will connect Apple's player to the Onkyo RI system, allowing consumers to remotely control—and recharge!—their iPods. Obviously, the Onkyo receiver must be RI-compatible, in addition to being connected to a "specified iPod model" and the RI dock.

The announcement is a bit of a tease, however, since details are scant. The press release states that Apple's website lists compatible iPod models, but this does not seem to be the case yet. Nor does Onkyo specify a list price, yet. Mostly, the release says, "Specific details regarding product design and use will be announced in due course. The product is scheduled for release mid-2005 in the US, Europe, Asia, and Japan, with subsequent release in other regions where Onkyo products are available."

We'll tell you more when they tell us.

In related news, Apple announced a new 6GB version of the iPod Mini on February 23, which will sell for $249. The 4GB Mini, which had been $249 will now retail for $199. Apple also introduced a 30GB version of its iPod Photo, priced at $349. The 30GB iPod Photo apparently replaces the 40GB iPod, which no longer appears on Apple's website. This means the "full-sized" iPod line now consists of the $299 20GB model and its "designer" sibling, the $349 U2 20GB iPod. The iPod Photo is available in the original $499 60GB version in addition to the new 30GB model.

Some industry analysts question Apple's current strategy of constantly expanding its iPod line. It's true, they concede, that Apple now has models starting at the $99 iPod Shuffle and expanding upwards at $50 increments, but they counter that the company already dominated the compact portable market and couldn't meet demand when it offered only a few relatively expensive players. The problem was that the profit margin on those models was rumored to be as low as under $10. Now, the Apple critics argue, the company has reinforced the perception that if consumers don't like Apple's pricing, they only need to wait for the annual introduction of new models to get a better deal.

Other analysts claim that Apple has always used the iPod as a loss leader to gain a toehold for its much more profitable online music store, iTunes.com.

Of course, the real story might be a little from column A and a little from column B. Apple wouldn't be the first company whose foray into audio foundered on the proposition that it's hard to make a profit selling products for approximately what it costs to manufacture them.