The Fall of the iPod

  • Is the age of the iPod over?
  • Total 51 million iPhone units and 26 million iPad were shipped over the holidays
  • However the humble long-running iPod saw a 52% drop in shipped units

Over the summer holidays Apple saw their sales for iPhones and iPads increase again. Total 51 million iPhone units and 26 million iPad were shipped over the holidays, an increase over the same period last year. However the humble long-running iPod saw a 52% drop in shipped units. iPods accounted for roughly about $974 million of Apple’s $57.6 billion total revenue last quarter, a significant factor in their record breaking figure.

What’s the reason for this dramatic drop in sales? There’s a few contributing reasons. Firstly: Apple’s ecosystem of hardware. The iPad and iPhone (both devices that overshadowed the sales of the iPod) offer a software replacement for the famous MP3 device. No longer do you have to carry around an extra device, your smartphone doubles as a phone and a media device. With most using aiming to buy those two devices mentioned, they’re left without a reason to own an iPod.

Secondly: the musical diet of this generation. As iTunes and it’s store are being traded off for more convenient music delivery services (see: Spotify, Rdio, Google Play Music), so are the devices that are tied up with them. As all of Apple’s iPod devices don’t offer 3G/4G connectivity, music streaming applications are off the table unless you’re listening to offline downloads on those apps.

This wasn’t unexpected for Apple however. As Steve Jobs famously said before they released the iPhone: “This is the best iPod we’ve ever built”. Infact, the shift from the iPod was something that Apple not only expected but actually encouraged with the sharing of the functionality of the iPad with their newer devices, in a kind of preemptive self-cannibalization.



For traditional MP3 players, which includes Shuffle, Nano, and Classic, we saw a year-over-year decline which we internally had forecasted to occur. This is one of the original reasons we developed the iPhone and the iPod Touch. We expect our traditional MP3 players to decline over time as we cannibalize ourselves with the iPod Touch and the iPhone.

-Apple CFO Peter Oppenheimer

 

Another reason for the drop in sales could be that lack of update for the iPod range (if you discount the slight price drop on the iPod Touch). It may be too late to tell if Apple might discontinue the iPod range entirely but the sales and general attitude for the old winner for Apple indicates this may be one of the final years for the humble MP3 player.

 

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