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."

A slump?

[CRCulver (715279)]

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.

Re:A slump?

[CRCulver (715279)]

1.5 billion people who are happy with fakes. Have you been to China and seen their middle class buying habits? Many of them don't even know there is a real difference between the Apple product and the fake.

batteries

[berashith (222128)]

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.

Re:batteries

[astrosmash (3561)]

The 3rd-party iPod battery market has been over-saturated for years. You can get a new battery for any iPod model, including the tools needed to perform the replacement, for under $30 dollars.

Re:batteries

[rodrigoandrade (713371)]

> Do you bitch about the battery on your motherboard to?

No, because that one is user-replaceable...

Re:batteries

[Fahrvergnuugen (700293)]

I've replaced the battery in my 1st gen mini twice by myself. the company i ordered the battery from ($9 btw) even included the tools to open the mini's case without damaging it.

History repeats itself

[UnknowingFool (672806)]

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.

Re:History repeats itself

[raddan (519638)]

OTOH, Apple's been around for nearly a decade longer than Dell, and people have been predicting Apple's demise [folklore.org] since before even Dvorak began his torrent of verbal excrement. And yet, Apple has managed to persevere and surprise all of us over and over again. You may not like Apple, but you can't deny that they know how to weather ups and downs. Steve Jobs seems especially good at getting people excited about even their mundane products. I think Dell should be looking at Apple.

Re:History repeats itself

[falcon5768 (629591)]

Um no, Apple should NOT be looking at Dell.

Unless you have been under a rock for the last 5 years, Dell priced themselves into a hole and now has serious financial issues. They have basically moved all their operations to India, and now are limiting even built to order in the hopes of saving their asses as the economy bombs.

And their model was ALWAYS to sell multiple computers to the same people, through planned obsolescence in 2 years.

No Apple is doing things EXACTLY right, which is why they are the only computer and perpetual manufacturer to make serious profits in a failing economy. If Dell took Apple as their example, they would not be on the brink of firing off a good 1/8th of their workforce to save profits for their management.

I'm sure they predicted it

[line-bundle (235965)]

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.

Eureka! The iPod killer

[Anonymous Monkey (795756)]

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.

Re:I'm sure they predicted it

[UnknowingFool (672806)]

Apple is pretty good at planning things but they are secretive so you don't know what they are planning. The iPhone was in development for 2 years before they announced it last January. And the only reason they announced it 6 months before they were able to sell it was that Apple had to apply for a FCC license on it.

Over 10 years ago, Apple bought NeXT to save themselves. Some analysts couldn't understand why Apple with it's faltering personal computer product line would buy a Unix computer company whose product line wasn't very successful. Was Apple going to start selling 2 product lines? What few understood was Apple bought NeXT for their OS expertise not their hardware business. That expertise became OS X.

Just yesterday, Apple bought PA Semi. This slump might be something that planned for a long time and PA Semi is just the start. We don't know what Apple has in store for PA Semi if NeXT is a good example.

What about an 80-column card?

[xxxJonBoyxxx (565205)]

What about an 80-column card? (If you get that, I know how old you are...)

Re:What about an 80-column card?

[Jherek Carnelian (831679)]

What about an 80-column card? (If you get that, I know how old you are...)

Young enough to use wikipedia [wikipedia.org]?

Re:What about an 80-column card?

[Digi-John (692918)]

Damn kids and your Apple hardware. In my day, an 80 column card was one of these [wikimedia.org]

Is this the iPod slump from three years ago?

[noewun (591275)]

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.

Re:Is this the iPod slump from three years ago?

[by Anonymous Coward]

Or is this the one which was supposed to hit two years ago? Or the one from last year?

No, no, you're getting that confused with the Year of the Linux Desktop(TM) again. Keep it straight, man!

Mac Sales Affected by Vista?

[mpapet (761907)]

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.

Mac Sales

[ForexCoder (1208982)]

" 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.

Apple in driver's seat, rest can't keep up

[Ilyon (1150115)]

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?

Apple now has two highly successful platforms

[Apple Acolyte (517892)]

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.

Re:cant wait for those 64gb iPod Touch's...

[sjf (3790)]

My Gf is so sure I will do that, that she is already expecting it and promised me not to complain If I go ahead and do it. How else is in this same boat?

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

Re:Something to look forward to in 2010

[cowscows (103644)]

I think the big flaw in your numbers is business users. The vast majority of them are not going to pay the premium for Apple hardware, and I don't see Apple selling budget boxes or licensing their OS anytime soon.

If you take businesses out of the count and look at a consumer level, then your numbers seems more feasible to me. You just have to walk into a college lecture hall and count the Apple logos to see the inroads that they're making.

Re:iPod choices are going downhill

[Digi-John (692918)]

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.

Re:Here's one way they can prepare

[gstoddart (321705)]

Make a 12" or 13" MacBook Pro. If that happens, then I will buy a new Mac. Otherwise, they can see how many suckers they can sell a $2500 manila of hot air to...

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 ... but, the people I know who have spent the money on them feel they actually did get something for their money. In the end, they're the final decision makers on if it was worth it or not.

I guess it's all a matter of what you want and need.

Cheers