During its quarterly earnings call today, Apple CFO Peter Oppenheimer focused a lot of attention on what the company is now calling its “pocket products.” That is, the iPhone, the iPod touch and the iPod. You’ll notice that Apple has taken to separating out the iPod touch from the rest of the iPod line. And that makes sense, given it shares many more similarities with the iPhone. But it’s also for another reason: The iPod, as we know it, is dying.
Of the three pocket products, two saw huge year-over-year growth this quarter, one did not. While iPhone sales grew a massive 626% year-over-year, iPod touch sales actually grew just about 130% too. And while Apple may consider the iPod touch outside of the iPod line, for financial purposes, it’s still counted with them. So when you hear that overall the iPod family saw a 7% decline year over year, you know that the actual iPod numbers minus the iPod touch, must not be very good at all.
And while Apple wouldn’t specifically give those numbers, Oppenheimer did note that the iPhone and iPod touch are very much “cannibalizing” the stand-alone MP3 iPod market. Apple still has over 70% of the MP3 player market, but it’s probably safe to assume that the overall pie which Apple has 70% of, is going to start shrinking soon (if it hasn’t already), at least in the U.S. The way Oppenheimer spoke today about what he calls the “traditional mp3 players” was almost like a eulogy.
And for good reason. I’d be fairly surprised if Apple updates its hard-drive based iPod classic ever again. It will likely continue to sell it for a while, and may even do something with the price. But the thought of Apple devoting any time to reworking this dinosaur at this point, seems pointless.
The iPod nano, which Apple did a huge revamp of last year, still likely have some life in it — especially if it gets a camera. But the key thing for it going forward is price. If Apple can reduce it even further (to say, $99) and still make money off of it, people will still buy them. Likewise the the Shuffle. If Apple can get it down to about $50 (it’s currently $79), that should continue to sell short-term.
But again, any tweaks and price reductions will simply be bandages on the iPod’s wounded body. Eventually, the “touch” will be the iPod. And yes, we’ll likely see a smaller version of it (and the iPhone) eventually as well.
It will also need to come down a bit in price, before the traditional iPods can fully go away. But at $229, the low-end iPod touch is already much cheaper than many of the original iPods were the first several years after its release.
MP3s players were great, just as CD players and tape players were great before them. But ultimately, technology and expectations evolve. Soon, carrying around a device that just plays music will seem pointless. Everyone’s phone will do that. And if someone doesn’t want to (or can’t) carry around a phone for whatever reason, iPod touch-like devices that not only play music, but play movies, take pictures, run applications, and, most importantly, access the web, will be everywhere.
And while the click wheel was great in its day, every time I pick up an older iPod now, I immediately try to touch the screen to control it. Apple is training us that touch and multi-touch will be the preferred method of device manipulation in the future. (Certainly until it makes its shoddy voice controls in the new iPhone 3GS work better.)
And so Apple’s three “pocket products” will eventually be whittled down to two. And it’s likely to happen sooner than you think. Apple doesn’t stick with products that aren’t selling for too long.
Well duh.
Yep, its all about the all-in-one devices these days. Lucky for Apple, they have the main major AIOD. Although that is quickly changing it seems… but I think they’ll be safe for a good few more years to come.
Damnit they need to add a camera to the Touch though.
Until this mythical omni-phone gets more than a quarter of a day of life (cough iphone cough), it’s not going to supplant dedicated MP3 players anytime soon.
I’m in the process of moving houses and so while packing/cleaning I’ve had my iPhone 3Gs running all day long, listening to Pandora, checking emails, and taking the occasional call. While I plug it in every night, I haven’t had a day where the battery is charged in the morning and runs out at the end of the day, let alone “a quarter of the day”. Not sure what you’re doing with yours.
i had a 3G and now a 3GS, and I’m getting better than a day out of it between charges with normal calling/browsing/music listening/email/twitter/texting. If I go camping, or am otherwise “off the grid”, and I manage my power by turning off wifi and bluetooth in the woods, I can go 3 days of checking email, texting, facebooking and a few calls.
If you’re saying a quarter of a day, you either don’t have one (and are therefore talking out of your ass), or have a defective one that should be replaced.
ipod is not dying because they are coming up with a new ipod and if u didnt hear about it the ipod touch is the best so whack off jerk
this a good news. ipod touch is going to get a camera, a couple years down the road apple should add calling features so that you make phone calls on your ipod touch + camera….
it is obvious that ipod sales number are down. why would someone buy an ipod when they can get a iphone with all the features of an ipod touch + phone calls.
right now, just size and price. iPod touch is still fairly expensive. but that will change.
Better if it changes. iPod Touch is now out of budget range for many. As you say, iPod looks primitive and old now. We are the Touch Generation and we prefer to multi-touch to make things work. Keys are a thing of the past. iPod Touch with camera would be amazing. But again, I think, in the long run, everything – iPod Touch, iPod and iPhone – will merge into one. I presume we would become too busy to use too many products (leave alone a separate MP3 Player). So, everything will fuse into the iPhone, most probably.
Cant wait for the new pricing!
“why would someone buy an ipod when they can get a iphone with all the features of an ipod touch + phone calls.”
At this point, I have quite a few reasons.
1. The only iPhone carrier here in Canada is Rogers; they’re not the company I use, and the iPhone isn’t reason enough (yet) to make me switch.
2. I already have a perfectly good, nearly new Blackberry. See #1.
3. I have an extremely large music collection, and I like to have it all at my fingertips. I’ll switch when they make an 80GB iPhone.
4. Still a bit pricey, especially with the Blackberry+80GB iPod I already have. Not priced low enough to compete with replacing those two.
And lastly, the technology for these things seems to be evolving so quickly that I’d rather sit on the sidelines and watch to see what comes before buying something and then feeling the need to replace it a year later.
cant wait for the zuneHD
OLED, tegra, etc.
Same thing’s happening on the Microsoft side, of course.
Zune HD… music, videos, web browser, apps, touchscreen…
http://zune.net/en-us/mp3players/zunehd/default.htm
well i just bought a new iPod at Christmas time, for more space for podcasts, i would have bought a touch, but there was no room on them either, so if they really want the touch to take over the market they are going to have to give them way more storage!
Falling off, but not dying.
The author misses a huge factor here: size. I have both a G1 (=iphone) and a sansa clip (=shuffle). My G1 plays music just fine, but I’m not going use it when I go running; it is far too large compared to a small clip.
A usable smart phone will never be small enough to comfortably run with, so there will always be a market for small players.
right, eventually you’ll use a iPod touch nano (or whatever the competing brand you buy will be)
If by iPod touch nano you mean “Pod touch-like devices that not only play music, but play movies, take pictures, run applications, and, most importantly, access the web” in the sense that “device that just plays music will seem pointless”, I have to disagree. The device that just plays music will win on form factor. The market is somewhat smaller and less dynamic (e.g. people who exercise outdoors), but they’ll hardly die in the same sense as the walkman did.
I use shuffle when running. For me small clip size is very important and I do not need to browse web or play movies while exercising. IPhone is simply too big and it would be too big even in half of its size
I think apple need to make an two piece Ipod to go in each ear and have channel up and down on own ear, and volume on the other. It can even have voice control. This maybe $99 iPod would be fantastic for running and not having anything more than just the headphone you would normally have. Really they can split the small (not clip) shuffle split it in half and put each peace in your ear.
This doesn’t look to far fetched given the current iPod Shuffle which essentially requires you to use the included headphones to control it.
They just need to create some sort of hardware to make putting two earbuds in your ear that aren’t connected to anything a little more practical. I can see how they would do this with larger studio type headphones, but with earbuds, it could be hard. You would likely still have to keep the wire to connect the two ear buds or you could make them bluetooth but that would compromise size. Also, which ear would get the iPod, or would it be split.
Anyway… good idea.
By the way, I think I know you!
before I got into the Nike+ Run, I used a very similar setup. I just used a 2nd gen Shuffle (the one with buttlons!!) and a pair of earbuds I shortened by clipping the wire and soldering a new headphone jack on. I just clipped the shuffle to my shirt at the base of the back of my neck, and the headphones were just long enough to reach my ears. It took a little work, but was a very comfy running solution. I’d love to see Apple come out with a pre-built solution like that…
I have an iPod touch and the iPod classic, but I clearly can tell the difference between the two and don’t “Immediately try to touch the screen to control it.” This is similar to saying that when you get out of bed or a chair that you *immediately* start running because “the world” has also trained you to run. I think that their is a clear difference between the two and its not that hard to tell them apart.
That is unfortunate, but I guess that is true because the iphone is very popular, in my country Bolivia every day more people want the iphone to the ipod normal, course that offers much more.
greetings from La Paz, Bolivia
The iTouch should have had a camera all along. That and the lack of built in audio recording made it less of a mulitmedia device.
Don’t get me wrong I love my iTouch. But was very disappointed second gen didn’t have a camera. I mean it already had a punch out for it. So what gives?
I’d pay for an upgrade to add the camera. But I’m not sinking more money into another one. It would be more “green” if I could do that than buy a new one.
If you feel strongly that the iTouch should have a camera, you should talk to PASEN, they are the makers of the iTouch, not Apple. Apple makes the iPod touch. Pasen’s product is a complete ripoff and anyone who keeps confusing the two are only giving them more business. Here’s a link to a review of what you apparently own on Engadget unless you made the same mistake…
http://www.engadget.com/2007/11/22/pasen-tries-to-go-legit-with-the-itouch-se/
http://www.engadget.com/2007/07/26/keepin-it-real-fake-part-lxvii-the-pasen-itouch/
The one thing the ipod does for me is allow me to have pretty much my whole music collection on hand. I wouldn’t use most of the touch features enough to justify the cost over an ipod – if the iphone got there and i didn’t have to use at&t, i would have great interest in it.
Exactly – I have a Touch now, but am considering selling it and getting a Classic (plus iPhone).
I want my entire music collection to be accessible on the go, so until the iPhone/Touch offer 100GB+, the Classic is the only option.
If you think about it, this view is shortsighted. It is a valid concern right now, but we’re talking about where the future of the market is. Think about this: When you have an unlimited, always-on data connection like you get with the iPhone, why do you need massive local storage?
There are many apps that stream your whole collection from your computer at home.
There are services like Lala that stream your private collection from the cloud even when your computer is off.
There are tons of streaming radio stations that are better than satellite radio (even the free ones!), and MUCH better than terrestrial radio.
Currently the only bonus of local storage is your battery life is much longer a 30 hrs than the 6 hrs you’ll get when streaming. The point is, if that’s improved, storage is not even necessary.
Have you used AT&T’s network lately? Your question answered itself: you need local storage b/c remote storage is only as good as the network, AND every single connection between you and the remote store.
If the iPhone is the shining example of connectivity, I hope that your vision never comes to pass.
I will never give up my ipod classic for a player that has 1/3 of the capcity no matter what.
I for one will not limit my music, and video to select pickings if they get rid of the high capicity devices I will move on to another brand plain and simple; some people have more than 32gbs of msuic and video and iam one of them
Agreed, but the battery life on the Touch is horrific. For that reason alone, it’s not really an iPod replacement. iPods need to last longer than the half-a-day “standard” from the iPhone.
I was thinking the exact same thing Jason mentioned. Until battery technology gets better I am keeping my ipod nano as my main music player and my iphone for the phone
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that sucks…
I have a 160gb Classic and can’t buy the current gen because it has less room.
Can I PLEASE get an iPod Pro? Same great battery life, 250 GB…. good headphone amp.
I dont even care about any software upgrades…
I just want something with a big HD and good sound…. is that so hard?
i’m with you Gary…i use the iPod classic to augment my car Sirius and for commuting…32 gb is not enough. especially if you like uncompressed music files. But at the same time, I am not about to buy another unless I lose the current one, so Apple needs to work a ‘classic’ planned obsolescence strategy. Make ’sense’ but it’s not the right ‘touch’ for some…at the end of the day we will end up with one convergence device (phone music) and one device with a big typing/screen interface. 2 devices.
is an HDD Touch out of the question? i never understood why Apple couldn’t put a 120GB HDD inside an iPod Touch. it seems to me that that would solve a lot of problems.
My 16GB iPhone 3G is great for listening to music at the gym or while I’m randomly out and about. But I’m nearing capacity of my 60GB 5th Gen Video iPod, which is use to listen to in my car. So I’ll be picking up a 120GB Classic iPod as soon as I can sell mine off on eBay.
Also illustrates a point: There are many, many, many devices out there in the wild, and I suspect that quite a few people are buying cheaper, used iPods instead of expensive new ones.
The iPod Touch has two problems as an MP3 player
1) The battery life is pretty bad.
2) The controls are useless unless you can look at the screen. So, playing music with the Touch in your pocket, on an armband, or in the car is impossible unless you are just going to accept what the Touch gives you (shuffle, etc.) and NEVER WANT TO QUICKLY PAUSE.
With the tactile Scroll Wheel, I can (without looking) change the volume, hit next/back or play/pause the music.
The slow involved pause is really a killer for audiobooks & podcasts, because, in the time it took you to fish out the Touch, bring up the interface and pause, you have stopped paying attention to the program and now need to rewind to the point to decided to hit pause.
That’s why they introduced the 30 sec quick rewind button in iPhone OS 3.0.
Don’t get it. The new headphones have the 3-way switch for volume control, start/pause, double-click for next, and so on. Makes in-pocket control pretty simple, really.
And I suspect that the next generation of the iPod Touch will get Voice Control just like the iPhone 3GS.
The thing is that not everyone would ever use original headphones with iPod. Once you start using something like Technics RP-DJ 1211 no earbuds will longer do for you. And Voice Control is another thing that can be used not in so many occasions. With an iPod in your pocket and you in the crowd you would still have to fish it out of the pocket and keep it close to your mouth to be able to control it.
Also, I don’t use the headphones in the car.
I use the AUX-in port of the stereo.
Operating the scroll wheel in a car is about as intensive as grabbing a cup of coffee/soda.
Operating the Touch interface is about as intensive a text messaging.
Also, like the other poster said, I don’t use Apple’s earphone when working out. I find the in-ear headphones stay in better when subjected to sudden movement.
rip ipod
They should keep at least one original iPod with the wheel.
every time I pick up an older iPod now, I immediately try to touch the screen to control it.
You do not.
+1
I don’t get the point to have an iPod Touch when you can have an iPhone…
Don’t want to switch carriers or can’t switch carriers (family plan, work phone, no local service, etc.).
U mean if people can have a device that costs about 700 dollars Canadian (3Gs) and have to pay about 60 bucks Canadian monthly fees for it Why go for a device that costs only about 300 Canadian dollars and has no monthly fees specially in these good economic time period?
Humm Yeah I so dont see the point either !!!!
Because playing music shouldn’t require a $80/month subscription
Music-wise, the Iphone has a major advantage over Ipods and other MP3-players; It can access the constantly evolving music-streamingservices emerging each month.
For example,Spotify will soon be released on the Iphone,with both the ability to stream any song from their 4 million song library as well as caching the playlists from the desktop app to be played in offline mode. A mobile music device without Internetaccess will not be a very attractive choice in the future, I think.
Only when you have a signal if you dont than it is not an advantage.
I agree somewhat. But I really think it´s more convenient to sync towards “the cloud” rather than having to connect the device to the computer all the time. You only have to have a signal for as long as it takes to download your playlist (from the webb app) to the Iphone and store the data in the Iphone cache. Or you can build playlist on the move for as long as you have a signal, save the songs (encrypted of course)in the Iphone cache, and play the songs in offline mode when theres no signal. I think its very conventient especially since you build your playlists from a library of 4-5 million songs (and it only costs 10 dollars a month).
My not-an-iPhone cell phone streams online music just fine too. Listen to Pandora on it every time I’m in the car.
The advantage of the convenience of the cloud over the more laborious shuffling around of mp3-files makes any
internet-connected mobile phone a more effective music device than any mp3-player (in my opinion). The difference just became so clear in this case when
comparing Iphone vs Ipods. I mentioned streaming service Spotify as it allows you both to stream any song you want immediately or store it (or indeed whole playlists of songs) in the cache (harddisk) on the Iphone to listen
to in offline-mode. So its basically transforms the Iphone (or any other mobile phone for that matter since spotify will be available on all mobile platforms) to an mp3-player with access to four million songs. Pandora turns the phone into an internet radio station. A very good one, because Pandora is quality, but it doesnt really compete with the experience of listening to your own handpicked songs, I think (and in the Pandora case I think you have to be connected all the time to be able to listen, which is a clear disadvantage compared to mp3-players and spotify-equipped mobile phones). .
So the mobile music device saves money (buying thousands of songs from Itunes isn´t cheap), harddiskspace (you can change your playlists whenever or wherever you are so you dont have to stuff it with endless gigs of music), and doesn´t have to be connected to a computer to sync (gets the music files from the cloud). Those are the major advantages I see with music on (spotify-equipped)mobile over mp3-players like Ipods and others….
I do think that the biggest advantage the ipod has now is the simpleness and cheapness. If a dad want to buy his kid a music player from apple but doesn’t wait him to have any internet or phone use the ipod is great, but then again so 2000.
The iPod came out in 2001! In 2000, people where still using Japanese products.
Also, I don’t think your scenario is very common. Why would a dad care if his child could use the internet? After all, you can disable that with parental control if he really wanted to. (Also, mom’s by iPods too.)
I think the only reason to not buy and iPod touch over a generic iPod would be either for size, capacity or price. Currently, the iPod Touch is the biggest iPod in length and width (not thickness.) It is also more expensive than the nano and shuffle, and has less capacity than the classic. Plus, if all you want to do is listen to music, you don’t want to waste battery life on powering the more powerful OS and bigger screen.
So I must ask again! Why would anyone NOT want to be able to have internet? If they don’t want it, they can pretend it isn’t there!
iPhone and iPod Touch both lack capacity and battery life to truly kill the ipod.
Only a matter of time, which is why its not dead but dying.
Read my comment above. Capacity is not needed when you have an always-on data connection. Battery life is an issue though.
There is no consumer device on the planet that has an always on data connection.
Cell coverage does not extend to all parts of the globe where a person may have a mp3 player.
Wifi, Cell signals/towers can and will fail and when they do your left with nothing.
Ala Mideast/Southern Europe undersea Cable cut about a year ago. What if a tower/satelite got hit by something and failed.
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Well this was going to happen eventually. I still have the older ipod nanos and I’m going to keep them just so one day I can look back and laugh at some of the things we’ve used to listen to music. I still think Apple could sell the ipods if they lower the price a little bit. People still use the Nanos, just lower it and you’ll see higher sales, but it’s a good gift to give someone, especially a younger kid. http://ziggytek.com/
You don’t need to be all sensationalistic about it. I’ve been predicting this ever since the iPod Touch was first released. Eventually there will be no iPod Touch. There will be the iPod and the iPod Nano, both of which will have touch screens. The Classic and Touch lines will sort of merge, if you can call progressively increasing storage options merging. The future Nano will be a slim device similar to as it stands, but with a touchscreen taking up the entire front. (It wouldn’t have the full feature set of the current iPod Touch, just the essentials.)
And the iPhone will mirror the future iPod, albeit with phone capabilities.
I was so against getting an iPhone for so long. Then a colleague talked me into an iPod Touch. That was my gateway gadget, and within a month I had an iPhone 3G. I still use my iPod Touch exclusively for music (I keep music off my iPhone to conserve battery life) and it’s one of the few pieces of hardware I own which I will definitely save to pass down to my grandchildren. Love that thing.
I’d be very disappointed if Apple removed the iPod Classic from the line up without having another device that has massive storage capabilities and excellent excellent battery life. The current iPod Classic is a fantastic product, but I wish they’d keep INCREASING capacity rather than DECREASING it. Give me a device with 200 to 500GB that can play continuously for 50 hours and I’m set!!!
For some reason, I don’t like the touch or iPhone and much prefer to iPod for music and yet love my BB Storm as a phone. I’d like to use it for music but it would need to be upgraded with bigger memory, more battery life and having uploaded all my CDs to iTunes makes it hard to shift.