Apple reported its earnings for the fourth quarter of 2013 yesterday, and made a boatload of money, sold gazillions of iPhones and iPads, and even had a strong increase in Mac sales. But one of the most striking parts of their report was a sharp drop in iPod sales: down 52% over the previous year, with revenues from the iPod down 54%. As Macworld points out, the iPod only represents 2% of Apple’s income now.
Remember back in the heyday of the iPod, when it was driving Apple’s growth? That little portable music player set Apple on the road to the post-PC era, and allowed the company to break away from being a (mostly) computer-only company. With a variety of different models, Apple had a product line that was the envy of other tech companies, who were never able to catch up.
So is the iPod dead? I don’t think so; it’s simply morphed into other devices. At the time of this writing, Apple still has 15 of the top 24 places on Amazon’s list of best selling MP3 players. But the smartphone has essentially killed off the portable music player. People will still buy iPods to use in the gym, when running, cycling or other sporting activities, but as more people have smartphones, there is less need for iPods.
The only exception is the market for people with large music libraries. Apple’s iPod classic still has the largest capacity – 160 GB – but even that is getting tight for big music fans. Three months ago, I suggested that Apple make an iPod pro for the high-end audio market; I still think that’s a good idea.
But the iPod as a concept has been replaced by a device that can do so much more. As smartphones continue their growth, the iPod will continue its decline. Nevertheless, don’t expect Apple to stop selling iPods any time soon; with nearly 20 million sold each year, it’s still a profitable part of Apple’s product line, and one that probably doesn’t cost very much to maintain. Apple hasn’t made any serious updates to the iPod line since September 2012, when the company last updated the iPod nano to a new form factor. (Updates to the iPod touch don’t really count, because they just leverage technology developed for the iPhone.)
We may see the occasional update to the iPod in the coming years, but it clearly looks like the iPod product line is in its last iteration. Unless Apple makes an iPod pro…