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Apple Prepares For the Coming iPod Slump
Hugh Pickens writes "Companies like AOL have stagnated along with the products that made them successful as a mature market and downward pressure on prices led to a nasty death spiral, but Saul Hansell writes in the NY Times that Apple has used its amazing six-year run with the iPod to nurture other business lines. Even though the number of iPods sold this quarter grew only 1 percent from the same quarter a year ago, Apple should be able to sustain itself with three business lines that will help it withstand a collapse in the MP3-player market: a continuing revenue stream from the iPods that have already been sold because of the iTunes Store, product upgrades to the iPhone and iPod Touch that are so different that they may well appeal to a significant number of iPod users, and perhaps most significantly, sales of the Macintosh which showed an increase of 51 percent by units and 54 percent by dollars."
As economic prosperity spreads to certain parts of Eastern Europe and the Middle East, I'd think there should be a steady stream of new buyers. Of course, in non-Japan and Korea Asia people seem happy with the fake iPods (complete with "iPod" written large on the front to soothe your designer-look lust) and I can imagine competing there is difficult.
Battery replacement to existing units is a great new line of revenue for any customers who aren't willing to just replace the original when it stops holding a charge.
All Apple has to do is to look at Dell. Dell made gads of money and had huge growth by selling PCs. The PC itself wasn't new, but it was being bought by more and more demographics. That, however, only lasts so long. To keep up with the same growth, Dell would have to sell more computers in a year than there are people on this planet. So they have to sell people a second computer if people aren't ready to replace their existing computer or computers to businesses. But their entire business still revolves only around computers and every thing is just an accessory. They tried getting into other lines like media players, printers, etc with varying degrees of success.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Eventually the market would saturate and I am sure Apple economists must have known it. I don't think they are really surprised at the slump.
Nothing to see here..... move along.
What about an 80-column card? (If you get that, I know how old you are...)
Or is this the one which was supposed to hit two years ago? Or the one from last year? You see, I get them confused, as it seems every year someone is predicting that Apple's iPod growth will suddenly crater as Teh Next Big Thing comes along and steals Apple's thunder.
I don't know if iPod growth will crater, or slowly slow down or whatever. But I am pretty well convinced that, whatever happens, no "expert" will predict it.
I am a believer of momentum and curves.
If the number of Mac units sold is accurate, then Vista is absolutely killing HP and Dell unit sales.
That would suggest that Dell and HP's consumer PC business will show unit and dollar sales declines.
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
I think Apple is doing a decent job upgrading their product line in order to keep winning back existing customers. I still have a 4G iPod (the last version with the monochrome screen) that is 4 years old now and it still works like a charm. The battery is probably shot, but I use it exclusively in my car now so it's plugged in all the time. When the hard drive finally dies I'll probably get an iPod touch so I can get maps and stuff on the go. However, it shows what happens when nearly everyone in America who wants an iPod has one - sales will drop. Apple really needs to start marketing in up-and-coming markets such as the Middle East, China, and other areas. Sure, there are plenty of knockoff products in those markets already, but that doesn't mean Apple shouldn't try.
" sales of the Macintosh which showed an increase of 51 percent by units and 54 percent by dollars."
Sounds like Vista is paying dividends for somebody.
I wonder what Apple will release around the same time that Microsoft releases their next OS? A version of OSX that runs on any "Vista Ready" machine before then would be kinda cool. The press seems to be split on how Vista is helping/hindering Apple, but I am sure things are already percolating based on the 2010 release of the next Microsoft OS.
Are you kidding me! We have finally found the perfect iPod killer! This is something Microsoft has been after for a long time (not to mention Sony, Creative, Samsung, and many others). The iPod it self will create it's own demise. Some one should call Microsoft and tell them to start selling iPods so that they can kill it faster.
We are the Borg...
Holy cow, it's been a long time since I've seen someone actually refer to the computer line as "Macintosh" as opposed to just a Mac. My first impression when I read the stub was "Apple has increased its sales of Monochrome IIGS systems? How?!"
Back on topic, Apple has been smart to diversify a little, but even the article mentions that the new features of iPods (eg, Touch) are meant to appeal to existing iPod owners, meaning they want existing customers to buy even more iPods. It also worked with the iPhone and the Shuffle, where fashion-conscious current iPod owners went out and bought "the next thing," but is this strategy really sustainable? How much longer can Apple really keep selling to the same hardcore user group before enough of them say "I have enough trendy mp3 players."
I don't really consider marginal improvements and marginal innovations that appeal to the same core group to be really sustainable over the long term. What they need to do is find the next "trendy gadget" line. That isn't mp3 players. Until they find out what the next "big thing" is and trend-itize that, their investment in other revenue streams (at least the ones that are still dependent upon popularity growth in mp3, like iTunes) is still susceptible to market growth deceleration. Bravo for making your computers popular again with all that iPod money though.
You could check out the Cowon Q5W. It competes with the high-end Archos PMPs. I have a Cowon A2 and for the kind of player it is, it's easily the best one I've used. Though the next player I plan on getting will be Cowon's successor to the D2, whatever that will be, as the idea of just swapping out high-capacity SD cards works for me.
I like basketball!!1!
because the business model includes making the product fail often enough that the consumers will constantly have to buy new ones.
It used to work for cars until this company called Toyota came along and ruined everything. Maybe I'm just cynical.
One of our competitors trademarked the term "hypothesis". From now on, we will call them "boneheaded ideas".
Yup, your Gf is unlikely to complain if I buy one also
Apple, for me, has proven capable of continuing to generate revenue, even though I bought a product which was still more than functional and adequate to my purposes. My 20 gig iPod was plenty for what I wanted and I was very happy with it. Then they released the iPod Touch (iPhone not available (officially) north of the border, or this would be a comment about the iPhone...). It's basically the same thing with some fancy bells and whistles added on. Really fancy bells and whistles. Really, really fancy. No. I mean REALLY fancy. Fancy enough that I dropped the cash, bought the iPod Touch, and haven't regretted it once since I bought it. It's the same thing as what I had but enough of an advancement that it was worth "wasting" money on an upgrade.
So long as Apple continues to upgrade the product line like this, they'll do fine. Offer more, better, and fancier, and people will upgrade. In my opinion.
Apple is driving the market and has been doing so since introducing the iMac. Apple invests in technology years in advance while the Dells and HPs are running their businesses on a quarterly basis.
The punditry will be surprised when they finally notice Apple's growth in the enterprise, at 2-3 times the industry rate. Anyone who's paying attention will realize that the features and capabilities that will make Apple unstoppable in the enterprise in a few years are being designed into Apple products today.
Similar things can be said for Apple TV's prospects for becoming a more ubiquitous consumer appliance - but don't be surprised if even Apple TV shows up in the enterprise, as a device to stream corporate training podcasts hosted on a MacOS X Server.
Apple introduces useful new capabilities that provide compelling reasons to buy new Apple products. What compelling reason is there to upgrade Windows PCs, other than for the sake of upgrading?
Interesting point: apple updates their products so fast and brings out new products so fast that a lot of people wait to buy something. When I was considering getting an iphone, everyone that already had one was advising that I wait another 6 months to get one since they're bound to come out with something better.
Overall I think it works for them just fine, since they time things well and their products are always a good value. But part of me wonders if they wouldn't make more money if they would just wait a little longer before bringing out new generations/products.
Apple now has two highly successful, separate platforms that feed one another: it's iPod/iPhone platform (handheld) and its Mac platform (PC). As others have noted, the iPod isn't going anywhere; the iPhone/iTouch sub-platform is very compelling and has a lot of room to grow; the Mac is enjoying growth unprecedented in the platform's history (to my chagrin, largely thanks to Apple's defection to Intel, which allows people to replace their PCs with Mactels). The substantial growth seen in Mac market share will cause developers to take the platform a lot more seriously than they have in the past and may spur traditionally unfriendly developers to enter the Mac market. Apple's corporate image is great in most quarters. Now I'd love to see a consumer Mac tower for those who are never going to buy iMacs, but that's probably not coming any time soon.
Part of the hardcore faithful who believed in Apple long before it was cool again to do so
OK, take off your tinfoil hat for a moment and consider the state of manufacturing in the US circa approximately 1970. There were several things working against the US auto manufacturers at the time that were irrelevant (or even favorable) to the imports:
So while it is very popular to bash on American car companies, I say that at least some of this is unfounded. People really need to take in the full situation to understand why things are the way they are (and were). And on top of that, I know of plenty of US cars on the road daily that are over 20 years old.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
Your argument is like renting a 5' by 10' apartment on the reasoning that you can just store everything you're not using in a storage unit, then haul it in when you need it. When you finish watching TV, just carry the whole TV and stand out and bring in your bookshelf so you can do some reading.
Klingon programs don't timeshare, they battle for supremacy.
I'm not sure how this got modded interesting. They already make a 12 or 13 inch MacBook Pro -- it's called the MacBook. It's one distinguishing feature is the small screen and lower spec graphics. I guess you can complain about lower spec graphics, but when was the last time you saw a high spec graphics card in that space? The mac books already get really hot, I don't want to know what would happen with a Geforks 8600 in there.
While I don't own a Mac Book Pro, and I haven't looked at its specs
when I first saw those commercials, I immediately though Wow!!! I remember ads for laptops and luggables in the late 80's/early 90's -- they didn't fit in no inter-office envelope.
I know someone a few years ago who bought himself an Apple laptop, because he was frustrated with his Windows laptop work provided. He seemed to think it was well worth the money, as it just worked.
I honestly can't say if it's a lot of hype and hot air or not
I guess it's all a matter of what you want and need.
Cheers
Lost at C:>. Found at C.
And there you have the answer. The smaller iPods will remain, but the real money is in the new convergence wireless touch devices. Once those hit $250-300 in decent sizes (and that will probably happen in the next iteration - the 8 gig is already $300), and the SDK means that there will be games and apps and allsorts, who wouldn't want one? There have been promises of such devices from companies like Nokia, and the PSP is probably the closest, but the iPod Touch and iPhone look like the first real winners.
(FD: I bought a 16 gig, but gave it to my wife so I had an excuse to buy a 32gig - it's enough for the essentials. I'll have to find someone else that needs a gift when the 64gig comes out)
"by that I mean people who don't sit on slashdot all day wondering why everyone else isn't building robots" DECS
Apple could likely make just as much money with a slower rate of new products coming out. However, that would make it far easier for competitors to catch up.
Microsoft's second generation Zune, had it arrived a year earlier, would have been competitive hardware wise with the then current iPods. As it was, Apple's rapid upgrading left it looking like nothing special.
The old Apple of the late 80s basically stopped the frantic pace of upgrades, and that's exactly what allowed Microsoft to catch up over a ten year period from 1985-1995. The bumper sticker that said "Windows 95 = Mac 89" was funny, but the sad part was that Mac 89 wasn't so far behind Mac 95.
Now the tables are turned, and Microsoft is the one coasting along on past performance, allowing Apple to catch up and surpass it.
Windows Vista, 7, and Singularity: The New Copland, Gershwin, Taligent
Your argument is like renting a 5' by 10' apartment on the reasoning that you can just store everything you're not using in a storage unit, then haul it in when you need it. When you finish watching TV, just carry the whole TV and stand out and bring in your bookshelf so you can do some reading.
I live in NYC, you insensitive clod.
I almost went mac this year in a serious way. The prices were about right and I was tired of the hassles of the OSS world. Why didn't I go mac?
I went to a very nice mac store, 3 times. The first time I asked one of the sales people a question I knew the answer to. I could see in her face she didn't know the answer. Instead of telling me that she gave me wrong information that could have cost me money. The 3rd time I went back I spent a lot of time playing on one of their systems to get a feel for it. I liked it very much. I didn't like the idea of having to relearn everything to migrate and I thought Ubuntu is very nice. Then a young clerk with a snotty attitude asked me to get off the chair I was using to check out the computer. I guess I wasn't as important as the class they were holding in the store. I figure if I was going to deal with snotty 20 somethings I should do it with the linux community and save myself a grand.
Then I wanted an MP3 player.
I was seriously considering an iPod.
Then I found out I could not use iTunes on Ubuntu without an emulator. Then I read a few "fuck you" articles from the mac high priesthood addressed to linux people who used iPods. then I read articles about how the iPod would get changes making more work necessary to get it going with linux.
I went on the ubuntuforums got some recommendations for linux friendly mp3 players. Then I bought a used one for $50 that does everything the iPod would have done for me and more.
To me, the point of a hard disk based media player is having all your music available when you want it. I don't know how I'll be feeling eight hours later, so how should I decide which music to put on the player and which not to? If I was that good at divining the future, I'd just get a 4 GB iRiver or something. And probably be a lot richer than I am.
As far as hearing damage, I don't see how prolonged exposure would lead to damage unless the music is too loud to begin with. But then, I've not done serious research on the subject.
All comments are properties and trademarks of the voices in my head. Not like I'm gonna claim them.
Right on. I didn't want to pay for a new 8GB iPod, so I bought an 8GB "refurbished" which looks brand new but cost about the same as a 4GB new one. It would sure suck for an MP3 player to be confined to one app, but fortunately the iPod is not that player because I found at least 2 pretty decent (non-iTunes) iPod apps (among several mediocre ones), and chose the better one.
I notice you don't say what kind of player you got, but simply that "the interface is fine". I haven't seen any MP3 player with a half-decent interface that isn't an iPod, so if there was another one, I'd love to hear about it, but I doubt it exists. Good work, though: you're playing off the classic "Apple is expensive!" meme, while not giving slashdot readers an alternative to pick apart. That's the sort of vague memethink that gets you to +5!
Apple has a good schtick going on. I don't know why anybody would buy a new Mac or iPod when you can save a ton of money buying one a couple months old (but which looks brand new). But apparently most people want that new-Mac-smell because their refurb and clearance pages are almost always full.
If Apple's success is so heavily dependent on a single product I think they've got more important things to worry about.
Honestly, I think this is a problem with American companies and media. All they seem to care about is that one hit. They're desperate to come up with the one product that will ensure success, at least temporarily. Because then all too often they seem content to rest on their laurels or worse go to extreme lengths to prevent competition.
So what do we constantly hear from the media, nonsense about this-killer and that-killer, how a particular product is going to change everything and there apparently is little patience for methodical, evolving improvements.
The iPod didn't just fall out of Apple's collective ass. It really was the embodiment of Apple's design philosophy and corporate vision. It also helped that Apple actually had the resources to design the device, develop the software and actually have a direct hand in it's manufacture.
Contrast that with other companies who claim they want to develop something to compete with the iPod. In many cases, like Microsoft, they take an existing product, a Toshiba MP3 player, and customize it for their use. For that reason alone it will never be as well integrated as the iPod.
In many other cases companies will take existing products, particularly Chinese-made products, rebrand them, maybe modify the external design slightly, and resell them here. So the American consumer gets stuck with a subpar product. In the short-term the company earns some easy money but in the long-term they've hurt their brand.
There are many other issues here, but this is one of the bigger problems I see afflicting American companies. Many American companies don't actually make anything anymore. They've effectively dumping the engineering and manufacturing core of the business and have focused almost completely on marketing. Innovation seems to only exist within marketing departments. They're constantly hunting for new advertising gimmick to sucker people into buying more of the same.
Instead of taking the approach of focusing on quality at a premium they're still trying to compete on price. Then they wonder why they lose to the, usually foreign, competition. And when things go south they always blame everyone and everything but their own decision-making. Granted, I'm over-simplifying a bit, but I do think it's a big problem nonetheless.
I find this amusing.
With the Macbook/Pro, Apple effectively closed the gap between its 'Pro' and 'Consumer' grade laptop products, and immediately faced a barrage of criticism for not offering a "Pro" 12/13" laptop.
The iBook was a fairly significant step down from the PowerBook. The MacBook is a fairly small step down from the MacBook Pro. Even back during the PowerBook days, the 12" model was often speced lower than the larger models.
That all said, I still use a 12" PowerBook as my main machine, and do wish that Apple would offer a slightly "nicer" machine at the Black MacBook's $1500 price-point (which, as it currently stands, is a very poor value for the money)
-- If you try to fail and succeed, which have you done? - Uli's moose
And other than to say that you carry around all your music on your iPod is there an actual practical point of this? Do you routinely spend 2+ months away from your computer listening to music 24/7?
No, but I routinely listen to music when I am not at home and often feel like changing what I'm listening to. So why wouldn't I want to have my entire music collection readily available so that I can have music that suits my mood?
I don't know about you, but I am unable to predict with 100% accuracy what I will feel like listening to throughout my day when I leave home in the morning.
Since I can't tell them apart, I treat all ACs as the same person.
Have you seen the recent news about food prices in Asia? Rice prices have doubled and people are starting to protest and even riot. If the current trends continue, including the short sightedness of trying to use food as fuel, that emerging market could collapse rather quickly.
We are *so* insulated here in the US and Europe. Food prices have inched up here, but nothing like what they've done in developing parts of the world. Maybe we should stop paying farmers to NOT grow food, then maybe people will be able to afford iPods in other parts of the world.
Then again, as others have pointed out in this discussion, they are more likely to buy cheap fakes anyways.
I use a new MacBook Pro because I wanted the snazziest laptop I could get (bought in early 2007)
My G5 iMac is still running fine and is my media server (bought in late 2004)
My G4 PowerBook is still running fine and is my print server. (bought in early 2002)
My G3 Blueberry iMac is still working but its getting replaced because my friend has no more use for it because it sucks too much power. (bought in 1996)
Though I will admit that my old Mac (a 7200 I seem to remember dimly) died in 2002.
On the other hand both my wife's Windows eMacine and my own Linux eMachines went down and needed replacement of some parts after a year or so.
MSBPodcast.com The opinions expressed here are my own. If you don't like 'em... Think up your own stuff.
entirely. Awesome, which is why I load all of my electronica onto my iPods from CDs. Mac sales have gone up, most likely to the yuppies who cannot sync the Itunes software to a Windows box and decide to buy the Mac due to the customer support representative with Mac stating, "it works better with a Mac," or the idiots logical thought process that decides a Mac is a cost effective option (cough, cough). ... or because their experience with Apple products is light years ahead of their experience with the bargain-basement electronics companies that try to push their hacked-together products as computing solutions for the masses? Buying a Mac is for the glorified rich who eat too many donuts and watch too much TV. If you enjoy my lovely view of the world, read my blog. No thanks.
What's really funny about this is that you seem to have it totally backwards. Your attitude puts you smack dab in the middle of the Mac stereotype.
Check out stuffwhitepeoplelike sometime. The Mac user is supposed to be a yuppie elitist who likes to brag about not owning a TV, drives a Hybrid, shops at flea markets, participates in athletic activities for fun (jogging, cycling, etc), listens to electronic music, and generally disdains middle america. In other words, you.
I'm a Mac user, but I guess it all makes sense because I'm a Bay Area elitist who drives a BMW and commuted 60 miles to work by bicycle today.
My only failing is that I refuse to apologize for the fact that I watch TV when I have nothing better to do.
I recall the great "aha!" when I tried to figure out how Woz did the graphics on the Apple and discovered he took advantage of the 6502's symmetric clock cycle to put the screen access to memory on the backside of the cpu access to memory.
this had the side effect of hitting every (lower byte) address every 60th of a second. That in turn solved the great problem of how to refresh dynamic memory without wait states for the cpu. This allowed the apple to avoid using static ram.
this in turn let them have a smaller power supply, one of the first to use a switching power supply that were the new thing in electrical engineering.
As for the cards, woz was clever again. By pre-decoding the address space for the cards on the motherboard he saved having to have circuitry on every card to recognize it's own address. Thus the cards were half the size of the s-100 cards and used less power.
all that was pretty freakin innovative. Not that they invented it but they made it all work.
Some drink at the fountain of knowledge. Others just gargle.