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Why the iPod is Losing its Cool
An anonymous reader writes "The Guardian Unlimited has a provocative article on the recent decline in iPod sales: 'Analysts warn that the iPod has passed its peak. From its launch five years ago its sales graph showed a consistent upward curve, culminating in a period around last Christmas that saw a record 14 million sold. But sales fell to 8.5 million in the following quarter, and down to 8.1 million in the most recent three-month period. Wall Street is reportedly starting to worry that the bubble will burst.'"
From the article:
There doesn't seem so much of a crack in any edifice as much as there's ultimately a saturation of the marketplace. At some point, pretty much everyone who wants an iPod gets one, and by now that's pretty much done (anyone hear any recent "I want an iPod" whines from anyone?).
Jobs (from Apple) isn't letting the grass grow ... with his
As seen in a previous slashdot discussion (the Amazon Unbox article) on video download, it isn't going to happen, or is at least unlikely. There is a slew of articles and surveys showing consumers, especially the target demographic of "younger folk" aren't that interested in long (full length features) videos. Video downloads, management, etc., is just a messier beast for consumers, enough so it's a long way from emergent (storage considerations, price, quality of small devices, battery power for video, DRM, download times, backups, etc.).
Also, consumers are getting hip to the snake oil that is iTunes: (from the article)
Yeah, initially all were in love with the iPod because for the return on effort, it seemed like magic. Consumers eventually get tired of jumping through even the tiniest of hoops to continue "enjoying" their gadgets. They want to turn it on, and not have to worry that the computer from which they're trying to transfer music is "iTunes anointed" or not. DRM-fatigue, finally, sets in (it's about time!).
This is the SONY walkman all over again, then the SONY CD walkman... it's done. It's hard to imagine quantum leaps of coolness and convenience beyond an iPod or video iPod. The curve had to level, there just isn't any there there. Apple should be happy with what they've done, but I don't think this is a growth niche any longer.
Well we are speaking the inevitable here. No fad ever lasts forever.
Seems kinda obvious to me... we're running out of people who want one and don't have one already.
-- I prefer the term "karma escort."
I think its a mixture of the DRM/format lock-in, regular market saturation and growing competition. Personally I think that the lack of on the fly recording is one of the many reasons why I would get another mp3-player and not an iPod. But lets wait for Apples Showtime event and then talk about it again. Steve might have something to fix the xmas sales.
it's basic business. product lifecycles are virtually all the same. launch, rise, saturation and decline. right now ipod reaching saturation, and it will go into decline sooner or later. that said, it is still very profitable for Apple, and the brand is still stupidly strong. it will most likely stay like that for a few more years at least.
this is news?
Market not infinite. Film at 11.
We had cassette walkmans popular. No more.
We had CD players popular. No more
We had mp3 players popular. No more
We have iPods popular. After some time, we will not.
That's how hardware, software and all the computing works. After some time we will be laughing at those iPods, because we will have something new.
I think everyone knows that consumer electronics sell better around Christmas. Comparing holiday season sales to summer sales is like comparing apples to oranges...
Religion for nerds. Stuff that really matters
The majority of iPod users use MP3s, which aren't affected by DRM. And DRM isn't anything at all new to iPod, either. There's no reason to assume the correlation that you take as a given. Any random anti-DRM screed is sure to get modded +5 on Slashdot, but you should put in the extra work and have it at least make some kind of sense.
And it isn't a scientific survey, but every person I know who's technologically savvy enough to be downloading MP3s is also downloadings .avi's. Here in China MP4 compliance is a big selling point for cell phones, PDAs, and other random gadgets. I gotta believe it's the same in the US. Amazon may not be impressing people, but that has more to do with the price than the fundamental concept.
Slashdot: providing anti-social weirdos a soapbox, since 1997.
Analysts in turmoil over "people buy more at Christmas shock"!
Fireworks makers puzzle over mysterious early-summer surge in demand!
Sales of Bush/Cheney 04 bumper stickers down 100%!
The iPod is not uncool or unhip... the fad isn't over.
Look around, iPods are everywhere and everyone is happy.
If sales are declining it's just because we all already have one.
I personally have a 4th gen 20GB click-wheel iPod. The color screens, video, photos, nano sizes, &c. haven't been enough to make me set aside the iPod I have to get a new one for another few hundred dollars. My iPod works how I expect it to and I'm happy. I won't be upgrading probably until this iPod is either stolen or broken, which I hope won't even ever happen.
If Apple wants to make people buy a SECOND iPod even though their current iPod works fine, they're going to have to add some compelling new features. I'd buy an iPod phone probably. Not so much because I want my phone and MP3 player in one device (but it would be nice if done properly: one less thing to carry around), but my current Motorola phone is horrible and I have some confidence that Apple would actually make a great phone with a good user interface. Every user interface on every cell phone out there right now is pretty much horrible; Apple could do a lot in this area.
I might get some sort of cool iPod car stereo. (Currently, I connect my iPod using the headphone jack to the Aux. in on the back of my Sony car stereo using a cable I got from Radio Shack... I'm talking about a REAL iPod car stereo, like a car stereo with a hard drive and wireless so I can send songs to my car in the garage from my computer in the house.) Supposedly there may be a touch-screen iPod coming? A touch-screen alone won't get me to buy another.
But yeah, iPods are still cool. There is no backlash. All the other MP3 players still are lacking in one way or another. iTunes is still a great way to manage music on the computer. People are happy. Apple has done great.
Q4 03: 336,000
Q1 04: 733,000 (holiday quarter)
Q2 04: 807,000
Q3 04: 860,000
Q4 04: 2,016,000
Q1 05: 4,580,000 (holiday quarter)
Q2 05: 5,311,000
Q3 05: 6,155,000
Q4 05: 6,451,000
Q1 06: 14,043,000 (holiday quarter)
Q2 06: 8,526,000
Q3 06: 8,111,000
We have yet to see a year-over-year decline in sales. It is of course to be expected, that pundits seeking attention will continue to troll with "the sky is falling" articles, just like we'll keep hearing about how every also-ran is an "iPod killer".
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Serves them right! My girlfriend cancelled on me a few times so she could stay home and play with her new ipod. Then she broke up with me. Rot in hell you vile yet stylish machinations of satan!
Esoteric reference.
I think the last time any of the iPod models were updated was last fall. Sales will likely pick up again when there's a new and exciting iPod.
"I saw a woman wearing a sweatshirt with Guess on it. I said, thyroid problem?" - Arnold Schwarzenegger
When it comes to "Coolness Factor" I think it's safe to say that the Microsoft Zune is pretty much dead on arrival.
this is really a crappy article.
14 million were sold in the crazy-buy-gifts-like-there-is-no-tomorow quarter. If you want to check trends you should look at corrosponding quarters , year over year growth.
guess what? 25% gains year over year... expect apple to sell around 20 million Ipods in the the corrosponding quarter.
Q4 03: 336,000
Q1 04: 733,000 (holiday quarter)
Q2 04: 807,000
Q3 04: 860,000
Q4 04: 2,016,000
Q1 05: 4,580,000 (holiday quarter)
Q2 05: 5,311,000
Q3 05: 6,155,000
Q4 05: 6,451,000
Q1 06: 14,043,000 (holiday quarter)
Q2 06: 8,526,000
Q3 06: 8,111,000
...DRM-fatigue, finally, sets in (it's about time!).
;-) Personally I buy quite a lot of music (about 5-6 albums a week at times). Since the RIAA consider their customers, including me, to be criminals, I've decided to act like one. I burn, rip and share it, and give away copies to anyone who asks ;-) Ironically, if there were no DRM, I wouldn't act this way.
You know I'm glad people are finally starting to realise they're being screwed in the ass by DRM. Over the last few months I've been asked various questions by (non technical) family, friends and colleagues that all involve DRM'ed content making things awkward, and not allowing them to do what they want with their legally bought music. I'm happy to tell them why they can't play their iTunes/Napster sourced music wherever they like; hopefully they'll wake up and see where their apathy has got them.
I then mention there are plenty of places people can get all the music they like without DRM, for nothing
Code, Hardware, stuff like that.
In my opinion, portable video will never be really as successful as portable music.
Music, unlike video, requires only one sense (hearing) and can be passive while one is doing other things.
You can listen to music while you browse the web, jog, write code.
You can't really watch a video using a portable device while doing those things. (other than porn...)
It can work though for people who travel a lot in public transportation.
That niche is partly filled by portable gaming which is also an activity that requires your attention.
^_^
Honestly, all doom-and-gloom iPod discussion in this article is going to look silly after this Tuesday's media event by Apple, which is rumored to be offering new metal-enclosed nanos in multiple colors, new iPods, a cell phone, a video streaming device, and movie downloads from Disney (which also means studios like Miramax).
Let's sit back and enjoy the negative comments from iPod haters wanting to look really cool and outside-the-norm for bashing a popular piece of technology that's left them behind. After all, it's par for course around here--let's not forget the original iPod announcement or the iPod mini discussions which were oh-so-accurate in their future predictions. Ahem.
"Sufferin' succotash."
... the last iPod Update was October 12, 2005 according to http://buyersguide.macrumors.com/ and everyone is waiting for the new one?
I'm sure the Apple faithful (*) will violently disagree, but the parent's use of the word "fad" is not poorly chosen. Recently local MBA students (**) in a marketing class surveyed hundreds of kids in local high schools regard digital music players. Stress "digital music players", they did not ask about iPod, they did not lead the respondents(***). The kids were pretty well informed, there was a lot of comparing and contrasting of various players at school. iPods were the most popular device, no surprise there, but there was a surprise. The most popular reason for choosing the iPod over competitors was fashion, a status symbol. It was not ease of use, although ease of use was identified as a category iPod wins in. For technology and features Creative was the winner, the lack of radio was a negative for the iPod.
The team that did the survey and focus groups was very quick to point out that this was just a class project, small scale and localized. However it was similar to a pilot program that found interesting results and could be used to justify a larger national study.
(*) I own an iPod, I love it, I would buy another. I own PCs and Macs and use iTunes on both platforms. However I am not religious about music players or operating systems.
(**) Working professionals who have real jobs in industry, under the supervision of a marketing professor who does this sort of thing for rather large firms. This was a class project, not a consulting project.
(***) I was not involved in the project but did I sit in on the presentation of the results. My recollection is that the questions went something like:
Do you own a digital music player?
What models did you consider?
What model did you purchase?
Why did you purchase that model?
etc.
Must everything be a bubble now?
The stock market was a bubble because everyone that bought stock inflated the price of stock for everyone else, making it look like a better growth opportunity for investment. The housing market was a bubble because everyone that bought houses inflated the prices of housing and the resultant appearance of investment opportunity similarly. And when both of which become too big, the bubble burst as there was nothing quite supporting the inflated prices and value plummetted.
The iPod does not exhibit bubble-like qualities. The iPod is a thing. Someone buying an iPod does not inflate the price for everyone else. As a thing with utility, the iPod cannot instantly decline in usefulness like a stock can.
The bubble is a useful analogy in certain investment situations. But let's not go pretexting it into conversation inappropriately.
The ______ Agenda
Want to read something funny in retrospect? Read Microsoft's Press Pass interview released to combat the press coverage when iTunes for Windows came out: Q&A: Choosing a Digital Music Service for Windows Users.
It's one big advertisement given in the form of a staged interview with Microsoft's general manager of their Windows Digital Media Division. Revel in the humor as he gives choice quotes such as, "iTunes captured some early media interest with their store on the Mac, but I think the Windows platform will be a significant challenge for them." Or "With Windows Media 9 Series, you get faster starts, better quality music, and support for the most devices."
Tee-hee...
"Sufferin' succotash."
You need a special client to load it and it only loads AAC.
No, it will load AAC, MP3, AIFF, WAV and Apple Lossless files.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
I burn, rip and share it, and give away copies to anyone who asks ;-)
Link please.
The Stone Age did not end because humans ran out of stones. - William McDonough
But when you're buing the unprotected CDs, you are eligible to transfer the contents to your own hard disk or what ever, IF THERE IS NO COPY PROTECTION. And regular CDs do not have such protection these days. And I am guessing you are not buying any protected CDs. So you are not acting like a criminal, until you actually distribute the ripped MP3s.
So you can burn and rip all you want, RIAA will not care. Just don't share.
'Phones are outselling dedicated MP3 players by six to one. Apple had the market for MP3, but they lost it.'
Before anyone takes this article too seriously, it's worth examining the credentials of the "expert" quoted in the article. Tomi Ahonen is a self-declared "technology strategy consultant", whose primary field of consultancy is wireless and mobile telecoms. Last year he predicted that mobile games consoles would also be crushed by mobile phone usage. The weak PSP represented an easy target, I'm not so sure that the iPod is as passé as he would have us believe.
If anyone has any doubt regarding Tomi's views, look no further than his blog. Clearly he has a vested interest in seeing the iPod fail, so take his opinions with large doses of salt.
Unless you're impotent, watching porn while jogging doesn't sound like a comfortable thing to do. Especially when you're wearing those jogging pants.
"Dude is that your....??"
"That's my ehm IPOD sticking out! That's right"
I agree. People don't buy music to listen to it. They buy music so that they can do something else and not get so bored doing it.
Doesn't it make you feel good to know that our freedoms are protected by politicans, lawyers and journalists.
I don't use my iPod that often, but the battery has lasted fine since 2004-10. Even if I needed to replace twice already at ~$17 (seems to be the going rate for a 4th gen) I'd still be better off vs. buying AA batteries. Not to mention the environmental damage from using non-recharable batteries.
Awesome furniture, accessories and cabinetry in Santa Rosa, CA: http://humanity-home.com/
I don't have one, I have an ancient 32K RCA K@zoo with 64mb SD card (the biggest it can handle) that I have not used in a while.
When I next upgrade it will be an Ipod, not because it is fashionable or faddish or popular, but because there is now a supporting ecosystem. Cars come with IPOD docks, you can get a cheap, nifty running package from Nike that tracks speed/distance while you are listening too music while your run.
In short I think it is the perfect choice for taking my music with me everywhere, moving seamlessly from jogging, to work, to driving cross country. I am just waiting for an 8Gig Nano to make the driving across country more feasable.
You missed the point, again. iTunes, by default is set to import CDs to AAC (I forget which bit rate). Changing to mp3 requires the user to go into the scary "Advanced > Importing" tab in the preference pane. MANY people, if not most, don't even notice that their ripping to AAC instead of MP3, since they use the "import" button on their CDs instead of choosing the "Convert Selection to [whatever]" option. The point is, to switch to mp3s you have to:
Only a very small segment of the population are going to go "out of their way" (even if it's a fairly small trip) to switch, and most don't even know it. By the time many people do realize that they're encoding AACs, they've been already working out fine for them on the iPod, so they have no real desire to switch. On top of that, when they DO get interested in learning the difference, they have the entire internet, as well as Apple Computer saying, "AACs are better than MP3s" (which they are).
So no, I would be willing to guess that a good 75% of ALL CD imported tunes on digital music players are AACs. The MP3 is dead, most people don't even know it.
Multiplayer Gaming (defined): Sitting around, discussing single-player games with my friends, at the bar.
All you have to do is compare the year-over-year numbers. Q3 may be low every year, but the numbers get larger year-over-year. The guys at the Guardian obviously understand NOTHING about market and fiscal trends.
iPod unit sales:
----- 2004
Q4 03: 336,000
Q1 04: 733,000 (holiday quarter)
Q2 04: 807,000
Q3 04: 860,000
Q4 04: 2,016,000
----- 2005
Q1 05: 4,580,000 (holiday quarter)
Q2 05: 5,311,000
Q3 05: 6,155,000
Q4 05: 6,451,000
----- 2006
Q1 06: 14,043,000 (holiday quarter)
Q2 06: 8,526,000
Q3 06: 8,111,000
Those who laugh at you for you having a Mac.. are the people who constantly call you to fix their PC.
You need a special client to load it and it only loads AAC.
In your overbearing zeal you either don't know what you are talking about or you are lying. In addition to AAC files from iTMS you also have the choices of mp3, AIFF, and Apple lossless. That is just the audio music formats. You also have video and spoken audio (audio books) as choices. In your excitement to declare the king is dead you should be more careful about your accuracy or face being dismissed as an untrustworthy voice motivated more by spite than knowledge.
In my opinion, portable video will never be really as successful as portable music.
I think you're right, and I think Apple knows this, which is probably why each new Mac Mini (now with Front Row, a remote control and TV output) has been inching closer and closer to the TV set. I suspect people will download videos via iTunes just so they can watch them on TV almost instantly, without the fuss of having to leave the house, probably ignoring whether they can watch them on their iPod or not.
It is interesting to me that so many Slashdot readers are taking it as a given that the analysts are correct on this one, even though the latter(and many Slashdot readers as well) have been wrong about the iPod pretty much every step of the way, and have a long history of not really grokking Apple. I agree that Apple needs to do something new, either by coming out with a completely new product that leapfrogs ahead of the iPod, or by some other means.
But the problem with forecasts like this is that they never take into account human creativity. The default assumption is that the engineers and designers at Apple (or any other company they examine) can't possibly come up with anything to supplant the currently successful product. Given Apple's track record since the return of Jobs, I'm willing to bet that the company's best days are not behind it.
The Halo Effect of iPod sales is very real. Macs, particularly laptops, have made an impressive comeback. You can bet they'll do more with the Intel-powered Macs than they're letting on now. The iTMS has been a huge success, and Apple can use that to springboard into a variety of media distribution plans, depending on where they want to take it. My guess is that when Apple introduces the new video service, there will be more to it than most pundits have predicted.
Particularly, I see Apple finally bringing consumers a truly easy way to snag video content via the Internet and play it back on a variety of devices easily. Integration isn't just about bringing technology to bear on a problem; it's also about making the technology easy enough for John Q. Public to use. With the success of the iPod, the buying public looks to Apple for easy to use media playback devices.
My predictions are, of course, not any more valuable than those from Wall Street. However, I am continually struck by the limited the range of vision of the Wall Street analysts, and by how frequently people actually listen to them.
Read the EFF's Fair Use FAQ
"Other complaints are that iTunes [Apple's online music store] is overpriced"
i th+consumers/2100-1026_3-6113998.html?tag=nefd.top
Overpriced compared to what? Free pirated music? All of the music stores that sell non-Indie music is seling for 99c accept for Walmart and Walmart is behind ITunes, Rhapsody, and Napster.
"In our ethnography interviews, some long-time iPod-users told us that they have stopped updating their iPods because it's too much work"
Using both Macs and Windows XP you just plug it in. Why couldn't they give a specific percentage of people?
" while other consumers who had bought iPods more recently had not even taken theirs out of the package to set it up.'"
Again no real numbers
"Analysts warn that the iPod has passed its peak. From its launch five years ago its sales graph showed a consistent upward curve, culminating in a period around last Christmas that saw a record 14 million sold."
During the fourth calendar quarter sells of consumer items peak --- news at 11. That's why economist compare on a "seasonally adjusted basis".
"He cited new mobile phones with improved MP3 players as the cause of the iPod's dwindling appeal"
http://news.com.com/Mobile+content+not+clicking+w
10% -- users who buy ringtones for mobile phones
0.4% -- users who paid for video
28% -- 15 million subscribers downloaded some type of content
So who are all of these people buying music from their cellphone?
I have a Samsung a900 that plays MP3 and AAC formatted music as well as Sprint's music store music. I can transfer music from my Mac using either Bluetooth or the included usb cable. The interface is decent but music drains the battery life. On top of that I have only 80MB to store music on. Even on Sprint's other phones that do accept a MicroSD card you can only get up to 2GB. I'll keep my Nano.