Apple reveals cheaper iPod, Intel sets up $200 mil fund
LAS VEGAS — Advanced radio services made the biggest splash on the first day of the Consumer Electronics Show, as competing satellite radio services XM and Sirius announced subscriber numbers and plans for 2004 and the first products in the high-definition digital radio market debuted.
Meanwhile, Intel announced plans to promote home networking, setting up a $200 million fund to develop technologies for the digital home.
And at the week’s other big technology show, Apple CEO Steve Jobs fulfilled predictions by debuting the new, less expensive iPod Mini at Macworld Expo in San Francisco.
XM maintained its leading position in the satellite radio market, adding more than 1 million subscribers in 2003 to end the year with 1.36 million. Sirius ended the year with 261,000, up from about 34,000 but still a distant second place. Based on both companies’ projections, it appears the gap will grow in 2004, as Sirius expects to end the year with at least 860,000 subscribers compared to XM’s predicted 2.8 million.
Both companies continue their fierce competition in the content arena. Sirius revealed plans to add a video component to its service in mid-2005. Utilizing technology from Delphi that will install video screens in cars, it will offer three or four channels of programming aimed at children, with content partners to be announced.
XM countered with a stab at its competitor’s selling point as the only commercial-free radio service, announcing it will make all of its music stations commercial-free in February, though ads will remain on news and sports channels. Both companies also plan to add location-specific traffic and weather in the next year, although XM will utilize audio and Sirius is planning to implement a data service that can be displayed onscreen.
Both companies are facing new competition for consumers looking for higher-quality radio, however, as iBiquity Digital debuted its new line of high-definition radios, the nation’s first. Working with manufacturers such as Panasonic and JVC and content partners including National Public Radio and Beasley Broadcast, it’s looking to create an entirely new market, convincing stations to broadcast in high-def digital format and consumers to purchase radios capable of receiving it.
In addition to higher quality, digital radio will provide new options similar to online music. IBiquity CEO Robert Struble said his company is developing capabilities to allow consumers to listen to music on demand and purchase songs they hear on the radio.
High-def radio tuners go on sale this week.
Consumers looking to take their own music with them also found new options this week, as Apple unveiled the new iPod Mini at its Macworld Expo. IPod Mini holds just 1,000 songs and retails for $249, while the smallest iPod previously available holds 5,000 songs and costs $399. IPod Mini is significantly smaller than existing iPods and is available in a range of colors, much like the iMac.
Many had previously predicted the new iPods would cost as little as $100, but the new product still allows Apple to better compete with less expensive offerings from companies like Dell. Apple has sold 2 million iPods and dominates the portable music market, thanks in part to the iPod’s compatibility with the highly successful iTunes Music Store.
Only non-music news of the day came from Intel, which is forming a $200 million fund to invest in new technologies for the networked home. The Intel Digital Home Fund, to be managed by company’s venture capital arm, Intel Capital, will provide coin to companies developing technologies to advance convergence of PCs with consumer electronics such as TVs, digital video recorders and game consoles in a wireless network.
Intel is hopeful some of these investments will help promote growth of its own core product line of chips for PCs and wireless devices.
“As more entertainment and educational content becomes digital, people want to edit, manage and access that content and share it among multiple devices, including TVs, stereos, PCs and handhelds,” said Intel Capital president John Miner. “The Digital Home Fund is designed to complement Intel products and accelerate development of key technologies and content which enhance and simplify the digital home experience.”