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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
" 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!
Yup, your Gf is unlikely to complain if I buy one also
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
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.
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.
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.