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New, smaller, flashier iPod sells out fast

Apple has a smash hit on its hands with the new iPod mini digital music player. The little cousin of the full-size iPod is virtually sold out after less than two weeks in stores, with nearly 100,000 snapped up.

The Apple iPod mini in various colors.

“I’ve never seen a product line sell like this,” says Jack Wahrman, senior merchandising manager at New York’s J&R Music World. “The iPod is a phenomenon.”

The $249 mini is the business-card-sized market extension of the regular iPod, which, while larger, also easily fits into a pocket.

The bigger iPod starts at $299 with a 15-gigabyte hard drive – enough for 4,000 songs. The mini, which comes in green, pink, silver, blue and gold, is just $50 less. It has less storage room, 4 gigabytes – or about 1,000 songs – leading critics to charge initially that it was overpriced.

“Consumers have a different view on pricing,” says Mike McGuire, an analyst with tech research firm GartnerG2 and a mini owner himself. “When you actually see it and feel it, it’s amazing. It’s the size of a cool little mobile phone and really compelling.”

Bel-Air Camera, near the UCLA campus in Los Angeles, sold its allotment in one day, says sales manager Gregg Burger. “It’s frustrating. Everyone wants to buy it, and we can’t sell it.”

“The demand is incredible,” says Wahrman at J&R, who had 25 of the silver minis left in stock Thursday. Best Buy and Amazon, on their Web sites, said they were sold out. Savvy entrepreneurs were auctioning minis on eBay with starting bids ranging from $299 to $310.

On its Web site, Apple tells shoppers to expect a one- to three-week wait. “We’re asking people to be patient with us,” says Greg Joswiak, Apple marketing vice president.

It’s not a component shortage that’s causing the backlog. “We’re making and shipping them as fast as we can,” Joswiak says. He says teens are taking to the cool colors. And the mini is appealing to athletic fans, who like exercising with an ultralight device.

It took Apple six weeks to sell 120,000 of the original iPod when it came out in 2001. Apple has now sold over 2 million and has a 70.4% share of digital music player revenue, according to market trackers NPD Group.

Being sold out “creates a lot of buzz for Apple,” says NPD analyst Steve Baker. “But they can’t leave retailers hanging for too long.” Competitors Creative Labs and Rio Audio both have similar small MP3 music players selling for $199 and can benefit, Baker says.

Wahrman calls Creative’s MuVo2 “the iPod mini killer.” Like the mini, it also has 4 GB of storage. The Rio Nitrus is 1.5 GB. “I just got in the MuVo2 and sold my entire order the first weekend, all 540 of them,” he says.

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