iPods are white-hot, of course. Now, with the addition of the U2 iPod (the first, presumably, in a series of ’special edition’ iPods) and the iPod Photo, iPod is even hotter. No wonder everybody talks about it.

John Gruber of Daring Fireball covers all this in its ’iPod Mania’ post, in the usual serious manner we came to appreciate. Although the analysis seems sound (pun intended, hi hi), however, in all iPod talks one point is missed – in my opinion.

I am talking about price. The premium price. Isn’t this an anomaly – a market leader selling a popular product at a premium price?

Let’s see. John points towards one weird gentleman called Paul Thurrott who writes for a self-explanatory named website called WindowsITPro. Let’s see how this ’IT’ analyst approaches the iPod Mini phenomenon:

« It’s expensive. Way too expensive. I understand that flash-based players are … yada yada yada. Sorry, but $250 is just too much money for most people to spend on a device that, by definition, should be a spur-of-the-moment decision. If this was $200 (or, better yet, $150), people would fall over themselves to buy them as they happened by Apple Stores around the country. Now, what we get is the effect where an excited potential customer walks out of the store disappointed because they’d have to justify $250 to their spouse, and it just can’t be done. »

Grossly off mark, obviously. Daring Fireball comments:

« Thurrott, of course, was totally wrong. If anything, Apple priced the iPod Mini too low. Constrained by the availability of the Mini’s miniscule 1.8-inch 4 GB hard drives, Apple has sold them as fast as they can make them. They’ve been and remain insanely popular, and likely would have sold out at $299. »

Now, why is that so? Why are people willing to pay more for iPod than for any other player, and do so in droves? Why did I pay for my first PowerBook, in Milan some years ago, something around $4500 without blinking?

It is called ’brand.’ And in branding we operate with a metric called ’price elasticity’ that basically says how much a price can be raised without breaking the emotional bond, sales volume and – ultimately – marketshare. In some cases the measurements reveal a brand so strong that its fans are going to accept to pay much higher premium prices in order to associate themselves with its emotional values. Branding – when it’s done right – is not at all about pretty logos, it’s a business strategy (beware – I did not say marketing/communication strategy, but business strategy!) for intelligently increasing shareholder value.