NEW YORK – Apple Computer Inc. (AAPL) on Monday introduced lower-priced versions of its iPod (search) digital music player with longer battery life, positioning itself against rivals trying to use lower prices to undercut iPod sales.
Apple said the new model iPod has up to 12 hours of battery life, compared with eight hours in previous models. Poor battery performance in some iPods has drawn criticism.
The 20-gigabyte model, which can hold about 5,000 songs, has a list price of $299, lower than the previous price of $399 for a 20-gigabyte iPod. The 40-gigabyte model costs $399.
"Apple is closing the pricing gap between iPod and competitors," said Steve Lidberg, an analyst with Pacific Crest Securities. "Combined with a longer battery, Apple addresses the two biggest issues it had with the product."
The Cupertino, Calif., company, best known for its Macintosh computer, has turned to digital music as it has failed to make major gains in the highly competitive personal computer market. But in digital music players, Apple also faces strong competition from Dell Inc. (DELL) and Sony Corp. (search)
IPod claims a 50 percent market share in digital music players. Its sales almost tripled in the previous quarter. Analyst Lidberg expects shipments of 1.2 million iPods this quarter, more than tripling its sales last year.
Greg Joswiak, vice president of hardware product marketing at Apple, said it expects "a very strong growth" in the third quarter, helped by the upgrade. Traditionally the third quarter is stronger than the second quarter due to back-to-school sales, he said.
Joswiak shot down market rumors of 60-gigabyte models in the pipeline. "We have no plans in regard to announcing 60-gigabyte models," Joswiak said. "We are trying to create a much more compelling lineup with two models for 20 and 40 gigabytes at extremely compelling prices."
As part of a pilot program, Duke University plans to give iPods loaded with school calendars and other information to its 1,800 incoming freshmen. Students can download class materials to listen to anything from audio examples of textbook exercises to Spanish songs.
IPod users can now change the playback speed of audio books. The new iPods, which are thinner, also offer improved menu programs.
Apple's iTunes online music service (search) is the most popular legal download site, claiming 70 percent of all songs bought online.
The stock fell 18 cents, or less than 1 percent, to $32.02 in morning trade.