This image was lost some time after publication.

Apple COO Tim Cook explained Apple's iPod strategy at a Goldman Sachs conference yesterday: Sell less, make more. Worldwide iPod unit shipments were up 5 percent December-to-December — relatively low growth, thanks to slumping sales of Apple's cheap Shuffle. But iPod revenue still grew 17 percent. "Shuffle pulled the units down, the iPod Touch pulled the revenue up. Frankly, it was much more important for us to have a great launch on Touch and to establish that product ... than it was on units," he said. Cook continued:

We put our energy into the launch of the iPod Touch ... we did it because it was very strategic for us to extend the iPod brand into being the first mainstream Wi-Fi mobile device ... I think we were very successful with it.

The product that didn't do so well last quarter on a year over year basis was Shuffle... in fact, Shuffle was down globally 17 percent and in the U.S. Shuffle was down more than that.

We decided to take the price of Shuffle down significantly... we did this because we believe there is elasticity in the market, somewhat in the U.S. and even more so in places outside the U.S. We will see if that exists or not.

(Photo by AP/Paul Sakuma)