Forbes writer: Is Apple iPod’s bloom fading?

“Poor Steve Jobs. His Apple Computer has become so successful that it now has only himself to compete with. And he might be losing,” Rachel Rosmarin writes for Forbes. “Jobs announced Wednesday afternoon that Apple sold 8.5 million iPod music players last quarter. That’s an impressive number, but less than the 9 million-plus that Wall Street had predicted. And it’s substantially less than the 14 million Apple had sold in its previous quarter. IPod sales still helped push the company profits and sales up 41% and 34%, respectively, and Chief Financial Officer Peter Oppenheimer noted that iPod sales, which now make up more than half of Apple’s sales, were up significantly over the same period last year.”

“But a drop in sales of nearly 40% from the previous holiday quarter seems severe. Apple allowed its product lineup to go slightly stale, for once, as it didn’t launch any innovative new iPod models in the first quarter,” Rosmarin writes. “Have the ubiquitous white machines crested the top of their popularity curve?”

“If the iPod’s bloom is fading, Apple may want to rethink its approach to its iTunes digital music and video store–one of the company’s true winners of the second quarter,” Rosmarin writes. “With more than one billion songs served, Apple’s iTunes store now has nearly 90% of the paid-download music market, according to Nielsen NetRatings. Perhaps soon would be a good time for Apple to consider cashing in further on the store’s success by opening its copy-protected content to other devices, as the French government has suggested in a bill… Some day, the iPod really will wane, and Apple should be ready to capitalize on the next big non-computer thing: maybe an Apple-designed cell phone?”

Full article here.
This is what happens when someone who has little or no understanding of what’s going on with a company gets assigned to write an article about said company. In the plus column, Rosmarin hints that she actually does realize that her premise is a put-on with the line, “Some day, the iPod really will wane…” As in, “iPod sales are not really waning, I’m just yanking your chain.” Newsflash: Apple will sell less iPods in the quarter after Christmas than in the quarter containing Christmas. This will happen for as long as Apple sells iPods.The decline in iPod sales last quarter wasn’t severe, it was seasonal. New iPods are coming, on that you can bank. There are hundreds of millions of iPods left to be sold by Apple. That’s right, hundreds of millions. Also, it’s not time to open FairPlay; you don’t open it until some real competition shows up, if ever. Finally, hope springs eternal (here, too) for an Apple-designed cell phone+iPod. We wouldn’t mind Apple as a mobile virtual network operator (MVNO), either.

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Related articles:
Apple reports Q2 2006 earnings: $4.36 billion revenue, $0.47 earnings per share – April 19, 2006
Apple to become mobile virtual network operator (MVNO)? – April 19, 2006

33 Comments

  1. Me too iSteve. I lost my silver iPod mini in my move. I need a replacement but I’m waiting for the next generation before I buy. I want one with a big hard drive this time. 4GB just isn’t enough.

  2. Mac sales eclipsed iPod sales last Q, which prompts articles like this regardless of actual sales numbers, margins or profit. It was to be expected and – in the long term scheme of things – irrelevant.

    iPod penetration is still quite small compared to potential growth. And when the next generation (video) iPod is released, we’ll see quite a bump in numbers.

  3. Those poor pundits who’ve only been following Apple since the iPod boom haven’t yet learnt to expect the unexpected like we longtime Macheads have. Apple will blow us all away again and again, at future times of its own choosing, once all the pieces are in place. In the meantime, strap yourselves in and prepare to enjoy the ride!

  4. “fewer” ipods, not “less” ipods. less is used for continuous things, or things that are so numerous they can be considered uncountable such as grains of sand. apple has sold a lot of ipods, but not enough to be uncountable.

  5. This is the reasons for the slowdown:

    1: Economic conditions in the US, post real estate bubble decline, people are not as spendy with their cash due to high mortages, rent and of course gas and oil prices which reflect on everything from food to clothes.

    2: Apple has about satisfied the new market for iPods, now it’s slowing down to a more steady amount.

    3: Apple has pushed the new iPods as fast as possible and some of us have so many of them because we felt we needed to have the newest toy. We no longer feel the need to have the latest iPod.

    4: Some have tried video iPods, but most realize the iPod is mostly good at one thing, playing music.

    5: The iTMS Video store has not taken off because studio’s want to charge $20-$30 a movie and iTMS customers don’t want the lousy quality if they are going to pay that sort of money. Also the internet can’t handle transfering billions of HD or even DVD quality films.

    6: The iPod fad is decreasing.

    All Apple has to do is settle down and keep producing iPods because they have become the industry standard.

    What Apple could do to increase iPod sales is create a iPod Dock/Stereo that accesses iTMS directly over a built in DSL modem. This way the computer tech less types can enjoy a iPod.

  6. “Newsflash: Apple will sell less iPods in the quarter after Christmas than in the quarter containing Christmas. This will happen for as long as Apple sells iPods.”

    Don’t forget that for the last two years iPod sales have been consistently increasing, totally ignoring the typical holiday drop-off that most companies face. Apple’s iPod is only experiencing this now (and probably will continue to in the future).

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