+- MacResource (https://forums.macresource.com)
+-- Forum: My Category (https://forums.macresource.com/forumdisplay.php?fid=1)
+--- Forum: Tips and Deals (https://forums.macresource.com/forumdisplay.php?fid=3)
+--- Thread: Is the iPOD in trouble? (/showthread.php?tid=67506)
Is the iPOD in trouble? - samintx - 12-03-2008
doyou agree? I hear of purchases here but I know I'm not able to justify spending the money now on a new iTouch. Is the iPod purchase replacing the several things you would give your kid/loved one/family memeber...?
Apple's iPod Problem
With fewer iPod users upgrading, the days of explosive growth are over. And that leaves iPhones and Macs picking up the slack
William Thomas Cain/Getty Images
By Arik Hesseldahl
Technology
Apple's iPod Problem
Chris Wysopal is the head of a four-iPod family. His wife and two kids all carry the pint-size nano music player from Apple (AAPL), while he uses a 2003-vintage device he got as a hand-me-down from his wife. But as much they love their iPods, the Wysopal family has no plans to buy any new ones in the foreseeable future. "They're all working, so there's no need to buy more," says Chris.
Strange as it may sound, Apple may have an iPod problem. The iconic music player cemented the company's reputation for innovation and fueled its financial success in recent years. But those days appear to be over. Legions of iPod owners see little reason to upgrade, especially with the rocky economy. As a result, some analysts believe this will be the first quarter since the iPod was introduced in 2001 that sales will decline from the year-earlier quarter. "The reality is there's a limited group of people who want an iPod or any other portable media player," says analyst Gene Munster of Piper Jaffray (PJC). "So the question becomes, what does Apple do about it?"
The iPod has been a powerful growth engine, helping to boost Apple's sales from $5 billion in 2001 to $32 billion in the fiscal year ended on Sept. 30. Growth for the music player franchise averaged more than 200% in 2006 and 2007, before falling to 6% in fiscal 2008. Munster expects the number of iPods sold to tumble 12% next year, to about 48 million units.
Apple's other businesses are healthy, with its iPhones and Macintosh computers selling briskly. But the decline of the iPod franchise means those other businesses will need to make up the difference as music player sales slide. That may prove particularly challenging as consumers cut back on their spending in the face of the recession. Wall Street has high expectations for the company, with analysts forecasting revenues will rise 15% next year, to $37 billion.
A number of institutional investors are selling their Apple shares. Oak Ridge Investments cut its stake in half, to less than 500,000 shares. "With the iPod maturing, the iPhone takes on greater importance," says David Klaskin, a portfolio manager with the Chicago investment firm. "But
Apple is working hard to keep the iPod fresh. The new flagship of the family is the touch, with the shape and large screen of the iPhone minus the phone capabilities. In one TV spot, Apple dubbed it "the funnest iPod ever" because it can play music and video, surf the Web, and handle computer games. The touch, which starts at $229, has been the most popular iPod product since July, says Stephen Baker of retail research firm NPD Group.
Meanwhile all of the iPod devices, save the screenless Shuffle, can play video. Apple has also developed new features for its iTunes music service, such as the so-called Genius that groups similar songs together in playlists. All of that work has kept Apple, with more than 70% of the U.S. retail market, far ahead of rivals, and that's not likely to change, according to NPD. Says Jupitermedia (JUPM) analyst Michael Gartenberg: "We'll continue to see an evolution in features, design, capacity, and price."
Perhaps the iPod's biggest benefit to Apple these days is in helping it sell Macintosh computers. People who use PCs with Microsoft's (MSFT) Windows operating system tend to be more likely to switch to Macs after they use one of Apple's music players, a phenomenon that has been called the iPod Halo Effect. Apple's share of the U.S. PC market has climbed to 9.1%, from 3.2% in 2003, according to market research firm IDC. "The iPod may be in decline, but it may not matter," says analyst Charles Wolf of Needham & Co. in New York. "The iPod may still be attracting Windows users to the Mac. And for Apple, that's pretty important."
Hesseldahl is a reporter for BusinessWeek.com.
Re: Is the iPOD in trouble? - BigGuynRusty - 12-03-2008
Do you have to paste the WHOLE article here Sammi??
Just like our "Benevolent Sponsors", they pay the bills by folks clicking on their links.
Also, it is against the TOS.
BGnR
Re: Is the iPOD in trouble? - WHiiP - 12-03-2008
No.
Re: Is the iPOD in trouble? - samintx - 12-03-2008
Make up your mind! I have posted just the link and gotten criticized and now you are critical of me posting the whole article.
Re: Is the iPOD in trouble? - MacArtist - 12-03-2008
It's hard for me to imagine that someone who owns an older iPod wouldn't want to upgrade to a newer iPod Touch. That's just my opinion after setting up my daughter's new 8GB Touch.
Explosive growth may give way to steady growth.
The article doesn't take into consideration new models and features that will come out in future iPods.
This isn't news. It's 100% pure speculation.
Re: Is the iPOD in trouble? - ztirffritz - 12-03-2008
iPod sales growth exceeded even Apple's expectations. No product can grow at that rate indefinitely. Flat line growth rate when you own 75% of the market is still nothing to frown upon. Mac sales seem to be taking off though, so I don't think Apple's bottom line will actually be affected too much. I'd expect some decline given the state of the economy, but they'll probably do better than other companies in comparison.
Re: Is the iPOD in trouble? - BigGuynRusty - 12-03-2008
samintx wrote:It isn't Either/Or InTX.
Make up your mind! I have posted just the link and gotten criticized and now you are critical of me posting the whole article.
It isn't so Black & White
Try Editing.
BGnR
No. - RAMd®d - 12-03-2008
Do you have to paste the WHOLE article here Sammi??
It's either feast of famine.
sam, just a few lines or even a paragraph or two are usually enough to give us an idea if we want to follow up with a link click. Sometimes an article is great, other times it's just link bait. A clue is generally all we need to decide.
And in quoting the *entire* article, you are reproducing it without the author's permission. In addition to a TOS violation, strictly speaking it's probably a copyright violation (or sumthin' like that).
You aren't the only person to quote whole articles here; others do it with some regularity.
Re: Is the iPOD in trouble? - incognegro - 12-03-2008
my usage of a Touch would be limited.
i need more than 32 GB space.
i need to be able to adjust volume & tracks without looking at a touch screen.
Personal .02 - Undrpsi - 12-03-2008
Well, my family has consistently upgraded thru the generations. I actually picked up a new Nano, a 2nd gen iTouch, and a refurbed iTouch. They all replace older iPods.
Several friends and co-workers have purchased less expensive brands and Zunes and have been HIGHLY frustrated getting them to work or using them. I would say 80% then went on to purchase iPods and have been so satisfied that they reccomend them to anyone who asks about an MP3 player purchase.
Do I see the continuiing high volume sales from previous years? No...but then again Apple has a tendancy to release 'must haves' every year. My crystal ball is on the blink again.
Jay