Three reasons why iPod still matters

Apple Online Store“This morning I got an interesting reply tweet from a friend: ‘Can you imagine someone saying in ’07, ‘In 3 years nobody will care about iPod sales,”” Jon Fortt writes for CNBC. “And I realized that in some important ways, he has a point.”

“Three years ago, when the iPhone was young, all eyes were on the iPod and the Mac,” Fortt writes. “Since then, the iPhone has become Apple’s primary growth engine and the focus of the lion’s share of investor attention.”

“When iPod sales underperformed with 9.05 million units sales in last quarter’s earnings report, it scarcely warranted a mention: the big news was that iPhone sales outperformed with 14.1 million units,” Fortt writes. “But here I’d like to make the case that investors should still care quite a bit about iPod sales.”

Here are three reasons why:

1. The Hook: Entry-level iPods are the Trojan Horse that hooks the youngest consumers into Apple’s ecosystem
2. The Line: If Apple wants to hook the younger crowd on its OS, moving them up to iPod touches is essential
3. The Sinker: Financial leverage; iPod provides the scale… that brings better margins and competitive advantages in higher-margin, higher-growth businesses. Bonanza.

Read more in the full article – recommended – here.

MacDailyNews Take: Every iPhone and iPad contains an iPod. If you count all of the the iPods sold, hardware and software iPods, you’ll see that Apple’s iPod business is booming.

Apple’s recent iPod hardware sales figures (not counting software iPods in iPhones and iPads):

Q410 (ended September 25, 2010) – 9.05 million
Q310 (ended June 26, 2010) – 9.41 million
Q210 (ended March 27, 2010) – 10.89 million
Q110 (ended December 26, 2009) – 21 million

Q409 (ended September 26, 2009) – 10.2 million
Q309 (ended June 27, 2009) – 10.2 million
Q209 (ended March 28, 2009) – 11.01 million
Q109 (ended December 27, 2008) – 22.73 million

Q408 (ended September 27, 2008) – 11.05 million
Q308 (ended June 28, 2008) – 11.01 million
Q208 (ended March 29, 2008) – 10.64 million
Q108 (ended December 29, 2007) – 22.12 million


  1. @MDN Take, of course each iPhone and iPad has an iPod within it. But the much bigger story is that it dosen’t even matter.

    I had an iPod Touch for years without ever using headphones with it. The iPad is perhaps the ultimate evolution. Apple used the iPod to get from here to there (‘there’ being a one-day-soon domination of the computing market).

  2. iPod still matters to me, because I’m not going to carry an iPhone with me when I go running. And it’s not like customers are only allowed a quota of one portable Apple device at a time. I’m often listening to my shuffle AND reading on my iPhone, while waiting somewhere or riding the bus, even though I could make my iPhone do both tasks.

    “iPod” is a very general name. The original iPod (through the first four gens), could have been called something else that relates to primarily being a music player. But Apple decided on “iPod.”

    Why? I think that name was selected because Apple envisioned the iPod becoming a more general device over time, as it has. In the future, when WiFi becomes more ubiquitous in urban and suburban areas (available “everywhere” on demand), a mobile “phone” will become less important, just as pagers were everywhere ten years ago, but hardly anyone has one now. Then, I think that whatever the “iPod” has evolved into will be the dominant Apple product line once again. Perhaps it will be the heart of a “wearable” (not just “holdable”) computer system.

    A “Mac” is a “big” computer using keyboard and mouse-equivalent. An “iPad” is a tablet computer. An “iPhone” is a smart phone. Those names are well-defined. But an “iPod” can become basically anything… ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

  3. The iPod touch is the entry level iOS device and there still isn’t a competitor with an equal product. There’s no Android equivalent, Web OS, or Win Phone 7 version of iPod touch available, or if it is, it’s not moving.

    The iPod touch adds a huge number to the iOS platform.

  4. Why I NEVER listen to Anal—– ysts.
    :When iPod sales underperformed with 9.05 million units sales in last quarter’s earnings report, it scarcely warranted a mention:”

    Anal—ysts seem to think that what they say is the only matter. Actual sales, economy, market, etc are all under or over performing if it does not match what they say should be reality.

    What an ego driven bunch of idiots…. Especially if you look at the reason they project what they do…. No knowledge, only 25 year old equations that went out the window when the iPod hit the market.

    Just a thought.

  5. Yeah, I would agree with ken1w – and add that the declines since 2008 don’t seem that big to me.

    summing the numbers above:
    2010 = 50.35
    2009 = 54.14
    2008 = 54.82

    It’s less than 10% – and at the same time, there are 20% (roughly 10 million/yr average?) iPhones, plus in 2010 another 20% iPads (roughly). If anything, the iPod has given up 10% of it’s market to allow for the iPad and iPhone – folks that would have had to choose between one and the other perhaps.

    I think most folks are likely to have several of each… and when the iPhone came out, some decided to forgo the next iPod.

    All this speculation – it’s just another attempt to try and control the stock price. Apple is on course to have it’s best year ever, again. They could start making dishwashers and iPod sales might decline and folks would be in uproar, but if the sales of the dishwashers more than compensated for the decline in iPods, who cares?

  6. steve3246 – My workhorse iPod is a 5th Gen 80 gigger, too. However, it’s starting to randomly restart and does not play Audible’s highest quality files, so I just bought a new 160GB iPod Classic as I wanted capacity to accompany the 1st Gen iPod Touch I still use, too. Didn’t see current value in the 4th gen iPod Touch since I carry my iPad everywhere I go.

  7. I just bought a couple of new generation iPods to show my music hardware development team how to build a better Zune. So hell yeah, from Microsoft’s perspective the iPod is still important. I mean, come on, where would we crib our ideas from if Apple didn’t release a new one every year.

  8. @ken1w, totally agree with you. It’s just that this would be like saying the Walkman “mattered” in the golden age of the PC (the 90s).

    Sure, it matters. But it’s a side story.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.