Analysts: the iPod is Dying

Analysts: the iPod is Dying

The iPod, the goose that laid the golden egg for Apple, is dying, analysts say. As the iPhone and iPad take on many of its features, iPod sales are expected to drop another 7.2 percent during the June quarter just ended.

The nail in the coffin may have been Apple’s recent decision to replace the iPod touch as its back-to-school discount workhorse with a $100 iTunes discount card. Previously, the iPod touch accounted for half of all non-holiday iPod sales, Piper Jaffray analyst Gene Munster said.

Now a majority of analysts (both pro and amateur) agree Apple will report next week 8.39 million iPods were sold during the June quarter, a 7.2 percent drop from the same three-month period in 2010. At the height of popularity, iPod sales reached 22.7 million during the Christmas 2008 quarter, but have been on a continual downward slide since.

Although Apple still controls more than 70 percent of the iPod player market, many features once exclusive to the MP3 player can be found in the iPhone and iPad. It’s unknown how long the venerable iPod will survive as many Apple customers turn to other devices for their music.

Although the iPhone can be stuck in your pocket, equalling the iPod’s portability, there is just something about a single-purpose bit of silicon – witness the popularity of the Kindle for e-books over the iPad and iBooks. Perhaps Amazon should take a lesson from the iPod’s slide and not pack too many features into its upcoming Kindle tablet?

  • Chris Brunner

    This is why a 3G iPod Touch makes sense.

    Check out this article on a concept model:
    http://friendsofmac.net/2011/0

    -Chris
    FOM

  • Mark Peterson

    Obviously the rising popularity of the other devices has cut into Ipod sales- also, there haven’t really been any tremendous new, got-to-have features added to the line-up in the last couple of years- I still have an ipod shuffle, classic, and ipod touch, all more than 2 years old- I think everyone who wants one has one, and there hasn’t been a reason to upgrade

  • Dickusmagnus

    We keep a couple of iPod Classics around in the car and in the house for music only. At 160 GB nothing beats this model for storage. If you load them up with 128k AAC then you will have one heck of a music collection!
    My guess is that the Classic will sell well for many years until SSD’s get as cheap as traditional hard drives, if that ever occurs.

  • Max Ellis

    The iPod isn’t dying. Most people aren’t going to buy their kids smartphones, and there is such a thing as market saturation.

    I get so tired of this endemic news style. Something is happening slightly less than before, so we assume a linear trend forever. Are we so cynical that selling over 8 million of something means it’s dying?

  • ErinsDad

    Only analysts following Apple could or would interpret selling 8 million of anything as bad news. 

    There will probably be new iPods by the 4th quarter, in time for Christmas 2011, so that Apple can get their earnings back on-track so as to please the analysts and pull back from the abject failure the company has clearly become.  (Note to analysts – that last sentence is meant as sarcasm.)

  • bondr006

    I love my iPod Touch 4. I carry it with me everywhere…..even when I have my iPad with me. It is an invaluable device that does so many things. I don’t see it going away any time soon. I have to admit that might change for me if T-Mobile ever gets the iPhone though.

  • Travis

    Perhaps this is because as more and more iPhone models come out, rather than selling one’s old iPhone for pennies on the dollar, one can use the older model as an iPod.  This is what I have done to my 3G iPhone obviating the need to purchase a dedicated iPod.  I eventually plan to have my kids use it.  I agree with Dickusmagnus that nothing beats the iPod classic for storage, but if you don’t need it or don’t mind shuffling portions of your collection onto and off the old iPhone, then you are set.

  • Peter Binderup

    I have an iPhone 4 and a couple of older iPods. And while I love the iPhone I can’t use it as a player while driving.

    I have my iPod connected to the car stereo, and if I get a phone call (hands free) the old iPod is nice and easy to control as I can pause it without looking at it – that is the main benefit of the old button style iPod. if I use the iPhone I have to look at it in order to pause.

    So I hope that the iPod (with buttons) isn’t dying as they are safer to use.

  • Don Pope

    “Although Apple still controls more than 70 percent of the iPod player market”

    Er… I think Apple controls 100% of the iPod market

  • Hampus

    If you had the iPhone connected to the car stereo playing music you wouldn’t have to pause at all when you got a call, the iPhone does that automatically…

  • Peter Binderup

    I use a bluetooth headset for the phone and after the call ends the phone continues to play in the headset not the car stereo

  • Karl

    I too use an older iPod in the car because I can control it with out looking at it. With the iPhone if I want to skip to the next song. I have to look… swipe to unlock… then look… then hit the fast forward section of the screen. 

  • Wayne_Luke

    Currently my kids have feature phones. All are up for renewal. I can get them each an iPhone 3GS for as low as $9.00 (plus fees and taxes) per phone from AT&T right now. Granted that is for refurbished phones. I can get them each a new iPhone 3GS for them for $99.00. I already pay for internet access on their feature phones. I already pay for unlimited texting on their feature phones. So the my monthly cost isn’t going to vary that much.

    Or I could pay $209.99 at Best Buy for an iPod Touch. I wonder which would make a better gift. I’ll wait until later this year to decide though. Hopefully the iPhone 4 comes down in price.

  • Alex

    A while back I did some research into accuracy of analyst in the tech sector … And while the media often unquestioningly reports their findings ( it makes for easy work copying someones report ). Rarely do you see the media do follow up reports when these guys are wrong and they are often wrong.

  • InformationWorkshop

    This single title “iPod is dying” is a single reference to a complex set of factors.  Oversimplifications ALWAYS lead to confusion.  As commenters have already pointed out, you have market saturation and it’s more of a replacement market now, also the fact that Apple is willing to kill its own products to move you to new ones, or that knowing Apple it’s likely they already have something designed that’s waiting for a particular tipping point, or perhaps a bit of infrastructure to come along (e.g. server farms) to introduce something new in music players.  

    Each of these things have already been referenced in comments, but not in the article.  Why not? I think we all know the answer to that.

  • jbelkin

    Analysts are idiots. If the sales of the iPod are dropping and apple had no replacementbproduct to sell (moto razr), then the company is in trouble … But apple not only has a replacement product but two additional lines that actually move iPod users to HIGHER MARGINS -iPhone & iPad.

    No one else in the world has figured out how to do that before … That by itself is astounding.

    What’s also forgotten that after 2years your android-rim phone is a plastic brick, your iPhone becomes a “free” iPod. So, really, there are 200 million iPods out there ALL WITH ITUNES ACCOUNTS!

    And as others have pointed out, 8 million in sales not during a holiday season is something EVERY retailer would want … That’s still 20 plus million units at $150 in revenue – that’s more Sony pep or amazon kindle sales EVER in a year … Though closer to 2 years of psp sales – kindle is definitely not even at 20 million usersvafter 5 years?

    Analysts should look at the market they are spouting about instead of randomly saying things.

  • Alfiejr

    the so-called iPod touch is actually Apple’s iOS mini-tablet of course. its name was purposefully wrong – seeking to transition the old iPod market to the new tablet market when the world was not ready for tablets yet –  but its sales are strong. what is fading is the old-style Nano and Shuffle and the archaic Classic.

    you would think “analysts” would figure the above out. but that would take real analysis, not the BS they crank out.

    there will always be a market for the smaller-than-a-tablet media device form factor of the Nano/Shuffle. but Apple needs to integrate them with iCloud somehow so they are even simpler to use wirelessly (via Blutooth?). i bet we see that in the new models this Fall.

    the Classic tho is at end of life. its replacement i believe will be a new model bigger iPod touch – like 5.5″ screen – still running iPhone apps, not iPad apps. there is a big market segment there (not to be confused with 7″ tablets that Jobs made clear Apple will never build), ideal for portable game players (this is the size of Sony’s new PSP too). and Apple can offer an optional bigger SSD for it with 300G+ for those who still want to carry around everything media they got. i bet we see this new model in the Fall too.

    these three new models would be a powerhouse next get iPod lineup for the holidays. let’s see what happens.

  • MacGoo

    At which point they’ll make an SSD version. ;)

  • Dickusmagnus

    Erinsdad (I could legitimately use that name too,)
    It’s a source of genuine amusement to follow stock analysts’ recommendations and comments on AAPL over the years. Always looking for the negative. The better the news, the more likely,according to analysts, it will soon fade. As a group, analysts are a good measure of successful market contrarianism.

  • Dickusmagnus

    Toshiba has a 220 GB HD out. The rumor is that Apple will keep the price for the Classic the same, but use the 220. That would buy extra time and keep sales humming along. The iTunes store should benefit too. 

  • mlokubo

    they do this purposely to manipulate the market. they’ve been doing this since deregulation over “blogging,” as they defend themselves by saying their speculation is simply opinion. they’re attempting to lower the stock price so they can buy back in before a big release or announcement so they can profit by dumping it during the hype. it’s especially effective against Apple because they’re so secretive.

    I wish bloggers and journalists would figure this out and stop promoting analysts who are blatantly trying to affect AAPL stock prices in this manner… all it does it hurt legitimate shareholders who don’t have portfolios with the large investment firms these analysts represent.

  • imajoebob

    “ANALYSTS SAY MP3s KILLING THE MUSIC SALES”
    makes as much sense.  The iPhone and iPad ARE iPods, you idiots!  Yes, they do more than my creaky old 3G with the cool touch-sensitive buttons, but they’re still just iPods!  You can’t buy a Chevy Vega any more.  Does that mean auto sales ended?

  • techgeek01

    I don’t think it takes a Brain surgeon to figure this out….. xD

    For a while I was looking at getting an iPod, but I decided not to, because soon I will be picking up smartphone and I’m just going to put all of my music onto it.  I rather carry one device than two.My brother has an iPod (touch) and he most likely will replace it with a smartphone, when he gets one.

    But that being said, It won’t die completely.  Smartphone will take a huge chunk out of iPod sales, but there will be people who want/need a device to store all their music in, and bluntly it’s cheaper to get a kid an iPod than an smartphone.    

  • nthnm

    While I see more and more kids that look to be about 13 having iPhones and Blackberries, a lot more have iPods, whether those be touches or nanos. I foresee this being the case until voice and data plans don’t cost such a friggen fortune. I’m in Canada where we pay out the ass, but I have a rather basic voice and data plan and my bill is $85 a month.

  • belli_binair

    Exactly, this is once again another forthcoming of the fact that suddenly everybody started to call EVERY MP3-player an iPod! Ridiculous! Why not call all mobile phones iPhones from now on, or every computer a Mac? pisses me of :-p

  • mai duc chung

    The usual idea is that you would use NFC to set up the link between the two devices and then do an automatic hand over to a different protocol for doing the actual transfer of data – eg Bluetooth,iphone 5

  • TechTeich

    Are these the same “analysts” that predicted an iPhone 5 in October?

About the author

Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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