Rob, I don't know what their margins are, but I can tell you that with everything else, Apple does not do low margins. I suspect they're building the iPods a lot cheaper than most people assume.

In any case, if their margins are indeed low, then there's another reason to back my claim that they will not drop their prices. I defnitely prefer what the Karma offers over the iPod, however once Apple establishes a market it's a tough proposition for anyone to come along and scoop them. Just forget about the Newton though.

Just imagine for a second someone wanting to come along and oust eBay. I think that's an extreme example, but along the same lines. And for the record, I don't even think Microsoft could take down the eBay machine, regardless of how much they spent.

Bruno