iPod Hi-Fi has big-sounding ambitions

He's spent, well, a lot of money on speakers in his time, he told a small audience of reporters Tuesday. But he said he's now giving up those expensive speakers for the new iPod Hi-Fi, Apple's new speaker accessory for the iPod music player.

Whether that's literally true, or a bit of Jobsian hyperbole to underscore a point, it's undeniable that Apple's new speakers do push the company further out of the computing world and into the home electronics business--if only a little further.

Jobs and Apple are pitching the iPod Hi-Fi as a replacement for the home stereo system. And indeed, the audio quality is very respectable for a small set of speakers in a single box, even if it's not quite on the level of a full traditional home entertainment system.

Analysts say that with 42 million iPods sold, the $349 speaker system is likely to find a market with some music fans who want an easy way to listen to their digital music collections at home, or in rooms without a stereo system. Actually replacing home entertainment systems, which are increasingly connected to TVs, could be more of a challenge.

"The price point and form factor are likely to appeal to people who are younger and have less disposable income, and who are making their first home stereo purchase," said IDC analyst Susan Kevorkian. "It's less likely to appeal to people who have a home entertainment system."

If anything, the new iPod Hi-Fi system underscores the tentative nature of Apple's move into the living room, with the company offering one or two consumer-electronics features at a time instead of a broad line of products.

For the new Mac Mini, which many predict will ultimately turn into a full-fledged entertainment hub, Apple has added the TV-friendly "Front Row" navigation system and made connecting it to the TV simple. But it has not added video recording features that would let it match TiVo or Microsoft's Windows Media Center PCs.

Apple has long offered a device called the Airport Express, which allows computer users to stream music directly from a computer to their stereo, or to a pair of powered speakers. Jobs said the new device was aimed at people who make the iPod the center of their music listening life, however.

"We put a lot of work into making the iPod an indispensable part of on-the-go living," Jobs said. "We think we've done a pretty good job at that. Now it's time to add a second focus, which is in the home."

CNET Video:
The iPod goes hi-fi
Steve Jobs sounds off on "home stereo quality."

The iPod Hi-Fi enters a market where traditional speaker makers and home electronics companies already produce a wide range of devices aimed at turning the portable audio player into a home stereo system. The presence of strong competition from Apple is likely to sink spirits in an industry where iPod accessory makers must pay Apple royalties of close to 10 percent of the wholesale prices, sources have said.

For now, existing Apple partners say they're welcoming the iPod maker's competition.

"It reinforces the fact that the third place for the iPod (after portable and in-car use) is in the living room," said Digital Lifestyle Outfitters vice president of marketing Andrew Green. "Although we're taking different tacks, we both see the living room as a new home for the iPod."

The most familiar of these products is likely Bose Electronics' $299 SoundDock. But other rivals, including Altec-Lansing and Digital Lifestyle Outfitters, have recently introduced products that also connect to the television, so video iPod owners can watch videos on TV or listen to music.

All of these are cheaper than Apple's entry, with Altec-Lansing's subwoofer-packed inMotion7 retailing at $249. DLO's HomeDock, which allows the iPod to connect to existing home entertainment systems, costs $149.