Apple Prepares For the Coming iPod Slump 340
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."
batteries (Score:5, Insightful)
History repeats itself (Score:5, Insightful)
I'm sure they predicted it (Score:5, Insightful)
Nothing to see here..... move along.
Re:batteries (Score:4, Insightful)
Mac Sales Affected by Vista? (Score:5, Insightful)
That would suggest that Dell and HP's consumer PC business will show unit and dollar sales declines.
Move to new markets (Score:2, Insightful)
Something to look forward to in 2010 (Score:3, Insightful)
Macintosh (Score:3, Insightful)
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.
Re:History repeats itself (Score:5, Insightful)
Comment removed (Score:5, Insightful)
iPod sales will never go down... (Score:2, Insightful)
It used to work for cars until this company called Toyota came along and ruined everything. Maybe I'm just cynical.
Re:Macintosh (Score:4, Insightful)
iPod = iPod Touch (Score:3, Insightful)
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.
Re:cant wait for those 64gb iPod Touch's... (Score:4, Insightful)
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.
Re:Something to look forward to in 2010 (Score:5, Insightful)
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.
Solution: Apple lowered the price (Score:2, Insightful)
American car bashing ... Re:iPod sales will never (Score:3, Insightful)
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.
Re:I'm sure they predicted it (Score:5, Insightful)
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.
Re:Here's one way they can prepare (Score:5, Insightful)
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
Re:iPod sales will never go down... (Score:3, Insightful)
What do I care, I have karma to burn.
Re:cant wait for those 64gb iPod Touch's... (Score:5, Insightful)
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 [roughlydrafted.com]
Re:I'm sure they predicted it (Score:2, Insightful)
Funny - I've always thought of it as NeXT acquiring Apple in a reverse takeover
Re:Capacity (Score:2, Insightful)
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.
Re:batteries (Score:3, Insightful)
Re:A slump? (Score:5, Insightful)
Spoken as the non-iPod owner you are. Buy music from Amazon and put it in the iPod? How about free podcasts? Audible.com? Transcode your own movies? Download mp4s from bittorrent and play them in your Touch/iPod video? Free apps for jailbroken iPhones/iTouches? All of the above work for me, zero worries. Notice how I can fill my iPod to the brim without even mentioning the iTunes store?
And then, I still that option if I want to exercise it to get commercial music, latest movies an option that you certainly don't have. It might be "absurdly high" for you, it's absurdly convenient for me.
Too much focus on individual products. (Score:5, Insightful)
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.
Re:Why I bought something else (Score:3, Insightful)
If you go to any retail store that sells computers, you're going to have virtually the same experience. The difference between the guys making minimum wage - $12/hour among retail stores, including Apple's, is marginal. Occasionally you might end up with someone knowledgeable at an Apple store or elsewhere, but that seems to be luck of the draw more than anything else. If you used the same strategy elsewhere as you did at the Apple store, you'd never have a computer.
Then I read a few "fuck you" articles from the mac high priesthood addressed to linux people who used iPods.
I normally buy things for what they do for me, not because of what salespeople or Internet flamers say.
Note that I'm not defending Apple or its sales practices, but I am saying that they're at the very least no worse than those you'll find elsewhere.
Rice before iPods. (Score:3, Insightful)
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.
Re:A slump? (Score:4, Insightful)
Do you need to see a YouTube video showing Amazon.com media going onto an iPod?
Your statement is 100% false. It's wrong.
For the audience, the reason why non-iPod owners spread the 'compatibility' myth is because some cute girl asked them "Is that an iPod", and the guy says "No, it's a Creative" and the girl says "Oh" and looks away. Guy gets all mad inside, blames Apple. Instead of enjoying his media player as-it-is, he has to justify his purchase to others.
Re:A slump? (Score:3, Insightful)
Re:History repeats itself (Score:3, Insightful)
As of market close today:
Apple market capitalization $148.48B
Dell market capitalization $39.09B
Maybe Michael Dell should just liquidate the company and give the cash to the shareholders....
Re:batteries (Score:3, Insightful)
Point well taken. I was using the context that the in-tank fuel pump in my car is replaceable, but not everyone has the tools so I would probably hire someone to do it who has the tools and skill.
Re:A slump? (Score:3, Insightful)
I never quite understand this comment. You're not constrained to Apple's applications or usage with the iPod. There are iTunes alternatives and music bought on other stores (except ones using competing DRM solutions) will play fine on iPods.
Where does this idea come from? If anything the lock in is from iTunes Store to iPod, but not at all from iPod to iTunes. It's iTunes Store customers who experience lock in, not iPod customers.