SanDisk Taunts Apple With MP3 Player Pricing Strategy

SanDisk on Friday introduced the latest MP3 players in its Sansa c200 series, a line of low-priced flash memory-based MP3 players loaded with features that the firm hopes will make Apple (Nasdaq: AAPL) iPod shoppers think twice.

For about US$100, the c200 series offers a bright LCD color screen and up to 2 gigabytes of storage. There are two new models in the lineup. The 1 GB model, the c240, sells for $79.99. The 2 GB, or c250, model sells for $99.99.

"We believe that the c200, with its great price point, will give consumers an attractive set of features normally found in players costing much more," said Keith Washo, SanDisk retail product marketing manager.

Comparing Apples With SanDisk

Washo's claim of a "great price point" is not merely hype. By comparison, Apple's 1 GB nano holds 240 songs for $149. The 2 GB iPod holds 500 songs for $199.

Both of the new Sansa models can be expanded with the optional SanDisk memory card, which can add between 256 MB and 2 GB of additional memory to the player. That means a customer could add the 2 GB microSD card to turn a 2 GB player into a 4 GB player that holds nearly 2,000 songs.

The c200s support WMA, MP3 and the protected WMA DRM format that gives consumers the ability to purchase or subscribe to music from most music service providers -- except iTunes. SanDisk figures users can get all the music they need from online music providers such as Rhapsody, Napster and Yahoo (Nasdaq: YHOO) Music.

What SanDisk c200 players offer that Apple's iPod doesn't is an FM tuner and recorder with presets for 20 channels. These models also offer a voice recorder and a user-replaceable lithium-ion battery that provides up to 15 hours of continuous playback.

Vying for multimedia status without the expense of a video player, the Sansa c200 will display both music album art and digital photos, which can be imported directly from a personal computer or from music files with album art data in the song information. It also can run a slide show of images while playing music.

Making Room for the Competition

Could SanDisk give Apple a run for its money? "There's plenty of room in the marketplace for more than one MP3 player," Stephen Baker, director of industry analysis at the NPD Group, told TechNewsWorld. "Apple does not have 100 percent of the market."

Indeed, but Apple does have 80 percent of the market and a brand name that has in many ways become the generic term for MP3 players. Still, SanDisk's motivation may not be the same as Sony's (NYSE: SNE) or other competitors.

SanDisk is a forerunner in the flash storage card market and one of the world's largest suppliers of flash data products. It wants to see products of all sorts with larger capacities of flash memory. Its foray into MP3 players may be less about selling music devices and more about selling memory.

"SanDisk's goal is to push the use of flash to the upper boundaries because they make a lot more money on four or eight gigabyte memory cards than they do on the smaller sizes," Baker concluded.