07-02-2010, 11:20 AM

Special Report: The end of Apple's iPod era
AppleInsider | Special Report: The end of Apple's iPod era

After years of serving as Apple's main source of revenue, the iPod's influence on the company's financial health has diminished to the point of being effectively irrelevant as a revenue driver, marking an end to the 'iPod era.'

To put things in perspective. Something the article does not do really.

Q1 2006 ipod revenue:
55.5% of total revenue of $5749 million = $3190 million.

Q4 2010 ipod revenue
8.36% of total revenue of $18906 million = $1580 million.

Sure this is still a good figure. Sure it's only 8.36%. That's cause in my opinion people buy an iphone instead of an ipod or market saturation (ie everyone who wants an ipod already has one and are only buying a new one when their own one dies). Sure $1580 million is a lot of money to get in a quarter. And yes the ipod is still king of the MP3 players. But with it's lower % of the Apple revenue stream I wonder what Apple will do with the ipod now.

In my opinion it's still worth keeping it as a product line. But I'd restrict it to the most popular models and scrap the rest. I'd kill the shuffle. I'd kill the classic. I'd just have a few nano's. Small and large HD nano's. Like 64gb+ nanos. And I'd keep the touch too.

But the touch is a big question. Should Apple upgrade it tot he point it becomes an iphone4 without the phone. Or should they keep it as is and just lower the price point as to differentiate it from the iphone 4? I'm sure these are the questions Apple's marketing/finance departments are asking themselves right now. What to do with the ipod.

07-02-2010, 12:58 PM

I say keep the iPod alive. People still want to listen to it while they work out, jog etc.

As for the iPod touch- I don't see it becoming a 100% obsolete device just yet. It is Apple's PDA after all...and while PDA's are becoming dead, Apple has marketed their PDA as an iPod- hence why it sells (some).

07-02-2010, 01:25 PM

I see larger capacity Nano's being the king in this field.

07-02-2010, 01:42 PM

Originally Posted by osxx

I see larger capacity Nano's being the king in this field.

I'd say you're correct.

iPod Classic- 160GB
iPod nano- 8 or 16 GB
iPod touch- 32 or 64 GB
iPod Shuffle- 2 or 4 GB


The next nano would probably be double or triple of its current size.
The Classic doesn't look like it has anywhere left to go- though additional colors IMO would be vastly appreciated.
The Shuffle was just updated this year, was it not?
And the touch- well...Apple has various options on where to take this device..after all, it is an iOS device.

07-02-2010, 02:07 PM

Originally Posted by the8thark

But I'd restrict it to the most popular models and scrap the rest. I'd kill the shuffle. I'd kill the classic. I'd just have a few nano's. Small and large HD nano's. Like 64gb+ nanos. And I'd keep the touch too.

I have a different perspective on the issue. The iPods have become more of a niche market since most smart phones are also media players, but the area I see iPods still have a strong benefit is the hard drive size. I wouldn't kill off the classic because some people have more music than the 160 GB and easily more if they have several movies. Many smart phones on the market barely have even half of that size.

There are also people who don't have a smart phone from any manufacturer or some other portable media device so an iPod is still worthwhile for them. This means that having the full iPod lineup gives them a selection to choose from. The iPod market is definitely smaller than it once was but I still think that it will be around for awhile longer and maybe indefinitely if people's media library keeps getting larger and people want to have it all with them.

IPods are definitely becoming more of a niche market but I think the demand is still there even though it's not as great as it once was. For example my tiny Shuffle with built in clip is less awkward to use when jogging or exercising than strapping a Touch/iPhone to my body. You are right though about me not buying a new one unless my current Shuffle breaks.

Originally Posted by the8thark

But the touch is a big question. Should Apple upgrade it tot he point it becomes an iphone4 without the phone. Or should they keep it as is and just lower the price point as to differentiate it from the iphone 4? I'm sure these are the questions Apple's marketing/finance departments are asking themselves right now. What to do with the ipod.

I already thought the Touch was pretty much the iPhone without the phone. From using my friend's iPhone I didn't see too much difference. I think it should be the iPhone without the phone since not everyone is willing to buy the iPhone for whatever reason. I personally didn't get an iPhone because I didn't think the monthly data plan fees were worth it but I needed a PDA and the other features of the iPhone/Touch was worth it also.

In the beginning they did cripple the Touch I guess to separate it from the iPhone but there were many complaints and I think Apple now realize that for people who didn't buy the iPhone they really wanted an iPhone without the phone. That was part of the selling point for me.

07-02-2010, 10:22 PM

Originally Posted by EndlessMac

The iPod market is definitely smaller than it once was but I still think that it will be around for awhile longer and maybe indefinitely if people's media library keeps getting larger and people want to have it all with them.

Along that same thought there...

As the computing world slowly moves toward cloud computing (and the rampant suggestions that you might be able to get things directly to your device and automatically synced to your <under my little coinage here> "personal cloud" without as so much any user interaction.) things might change with the iPod line.


This is my thought and interpretation..if you will..on cloud computing.


There's two types of clouds.

There's the "personal cloud", aka your desktop computer, which has everything you've bought downloaded onto the hard drive. Hardly any user interaction required.

There's your device connecting to your personal cloud over your home wifi (or, in Apple's sense, MobileMe and Back To My Mac through any means of internet connection.)


And then there is the "internet cloud" or "public cloud" which has everything available to you without having to resort to connecting to your "personal cloud". And if you get something off the "public cloud", then it goes to your "personal cloud". It's pretty much the same, but it could definitely change the way we use computers these days.


And there's your device connecting to the public cloud through any means possible.


All your email, office documents, and media, plus entertainment, will no longer be fully anchored to your desktop computer. Just hook up a mobile device to a TV, and use a remote or something. It's a thought.

Okay..I've gotten ahead of myself again.

07-02-2010, 11:02 PM

Originally Posted by the8thark

Special Report: The end of Apple's iPod era
AppleInsider | Special Report: The end of Apple's iPod era


To put things in perspective. Something the article does not do really.

Q1 2006 ipod revenue:
55.5% of total revenue of $5749 million = $3190 million.

Q4 2010 ipod revenue
8.36% of total revenue of $18906 million = $1580 million.

Sure this is still a good figure. Sure it's only 8.36%. That's cause in my opinion people buy an iphone instead of an ipod or market saturation (ie everyone who wants an ipod already has one and are only buying a new one when their own one dies). Sure $1580 million is a lot of money to get in a quarter. And yes the ipod is still king of the MP3 players. But with it's lower % of the Apple revenue stream I wonder what Apple will do with the ipod now.

In my opinion it's still worth keeping it as a product line. But I'd restrict it to the most popular models and scrap the rest. I'd kill the shuffle. I'd kill the classic. I'd just have a few nano's. Small and large HD nano's. Like 64gb+ nanos. And I'd keep the touch too.

But the touch is a big question. Should Apple upgrade it tot he point it becomes an iphone4 without the phone. Or should they keep it as is and just lower the price point as to differentiate it from the iphone 4? I'm sure these are the questions Apple's marketing/finance departments are asking themselves right now. What to do with the ipod.

The touch has a good place in my budget. My kid has one because I don't feel like paying for a data plan for him but he loves the apps and of course, the music player. I'm sure a lot of parents don't want to pay the data plan. I also wouldn't get him an Iphone because if he lost it, it would be too expensive to replace.

07-03-2010, 12:05 AM

@ Chris H.

You do make a good point about cloud computing even though I'm not a big fan of it. It would lessen the need for larger hard drives but the flaw I see is that you assume that people will always be in an area that will have good access to wireless.

There are many places I can't get WiFi or even cell phone reception. To be truly mobile with a cloud computing we would need to upgrade our infrastructures and even then places like out in the woods you most likely would not get any signals. Most of the time around the house I have my laptop so I don't need my iPod. I mostly use it when I'm outside and completely away from any computers.

The other reason why I don't like cloud computing is that servers do go down. For example, I've had times when I could not access my Google calendar, Gmail, Yahoo mail, etc. The performance also depends on the speed of your network whereas an iPod is a stand alone unit and will play songs seamlessly without any slowdowns or buffer issues.

Definitely your idea of iPod cloud computing is an interesting one and I'm sure there are other people who will be interested. I know it wouldn't work for the way I use my iPod though but Apple may create yet another iPod category with your idea in mind for people who do want it.

07-03-2010, 12:33 AM

@ Endless Mac


It took about 30 seconds to think that whole thing up. I'm young and restless.

Servers do go down though..that is true. What the world needs is more Xservers and Mac minis. *lightbulb*

I wonder how they would rectify this, without constant human interaction there either.

Mobile servers? (OMG I hope not...)

Satellite servers? (literally- in outer-space computers..another thought..but I hope not for that either)

07-03-2010, 12:37 AM

Anyone notice that the 2006 number is almost exactly double the 2010 number but that the revenue percentage is significantly less than half of the 2006 number? All things being equal, the iPod is still a cash cow in proportion to it's overall revenue percentage. What that also tells us is that Apples overall revenue has grown significantly despite what appears to the drop in the iPods revenue share.

07-03-2010, 01:18 AM

Don't see any manufacturer doing away with a product bringing in $1.5 billion a year in revenue any time soon.

Except maybe some auto manufacturers having to sell their vehicles at a loss to get them off the lots. And that $1.5 billion would represent 75,000 cars at $20,000 each. Am thinking a couple of the auto manufacturers would like to have that sales figure.

07-03-2010, 07:28 AM

Originally Posted by the8thark

In my opinion it's still worth keeping it as a product line. But I'd restrict it to the most popular models and scrap the rest. I'd kill the shuffle.

This could be why you're not head of Apple.

The Shuffle is in fact the most popular of the non-touchscreen iPods.

But the touch is a big question. Should Apple upgrade it tot he point it becomes an iphone4 without the phone. Or should they keep it as is and just lower the price point as to differentiate it from the iphone 4?

Um, that has already happened. The iPod Touch is -- pretty clearly -- intended as an iPhone 4 without the Phone. You can safely expect the iPod Touch to get cameras and Facetime before xmas.

Millions of people want everything the iPhone 4 has except the ongoing monthly $ commitment. Voila, the iPod Touch, one price and you're done.

I'm sure these are the questions Apple's marketing/finance departments are asking themselves right now. What to do with the ipod.

Again, Marketing and Finance do *not* make those sorts of decisions. You must be confusing Apple with the company that Dilbert works for.

07-03-2010, 07:59 AM

Originally Posted by chas_m

This could be why you're not head of Apple.

The Shuffle is in fact the most popular of the non-touchscreen iPods.

From what I read I'm pretty sure the most popular ipod was the Nano and not the shuffle.

07-03-2010, 11:19 AM

Why the heck would they get rid of the Classic? I know it's hard for some people to wrap their minds around, but not everyone wants a smart phone, and even man of those who have smart phones would prefer to have a dedicated mp3 player that can hold huge amounts of media. One of the most amazing things about mp3 players is that for the first time in my life I can carry my entire music library with me wherever I go. I have over 80GB of music and video and it was frustrating enough when the biggest Classic was 20GB... it was a nightmare trying to decide what was going to go on my iPod and constantly shuffling my library around to accommodate it.

As for smartphones, I'd also rather have a device dedicated to making phone calls that aren't constantly dropped, that are less bulky, and that don't cost me an extra thirty bucks a month for a data package.

I, for one, would NOT be a happy camper if the Classic were discontinued and I had to find a way to cram my favorite music on a 64 GB device, especially since my music library is always expanding.

07-03-2010, 11:51 AM

Ah but if you are the only one who feel like that and want the classic then it will be dropped. It's only if a large number of the Apple product buying public feel the same way then will Apple actually take it into consideration.