iPod touch viewed as in final stage of product life cycle

Posted:
in iPod + iTunes + AppleTV edited January 2014
With the iPad mini now joining the iPhone and iPad 2 in Apple's sub-$400 product lineup, the company is expected to reduce its investment in the iPod touch going forward.

Ming-Chi Kuo of KGI Securities, an analyst with a strong track record in relation to Apple's future plans, said in a research note this week that the iPod touch "has entered the final stage of its product life cycle." The latest version, released this month for a starting price of $299, has a larger 4-inch display, but sales are still expected to be significantly affected by the iPhone, which can be had for free with a new two-year contract, and the new $329 iPad mini.

Sales growth of the iPod touch is therefore expected to be limited, even in spite of the major redesign issued by Apple. As a result, Kuo believes that Apple will not invest significantly in developing future models.

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Apple announced at its iPad mini unveiling on Tuesday that its new iPod touch and iPod nano collectively sold 3 million units in their first month of availability. The iPod has become a diminishing aspect of Apple's overall business, as the iPhone and iPad have taken center stage.

Even if Apple does focus less on the iPod touch, it's not likely that the company would discontinue the product in the near future. Apple routinely boasts during its quarterly earnings reports that the iPod touch accounts for more than half of all iPods the company sells.

And the $249 hard-drive-based iPod classic, which offers 160 gigabytes of storage, continues to live on in Apple's product lineup, despite the fact that it has not been updated in years.

In April of this year, Kuo predicted that Apple would discontinue its 17-inch MacBook Pro. Only months later, in June, that prediction proved accurate, as the 17-inch MacBook Pro was removed from Apple's notebook lineup.
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Comments

  • Reply 1 of 75


    So how are all these 12 year olds affording $70 a month for an iPhone, anyway? The iPod touch still has a huge market, and always will.

  • Reply 2 of 75

    Quote:

    Originally Posted by Tallest Skil View Post


    So how are all these 12 year olds affording $70 a month for an iPhone, anyway? The iPod touch still has a huge market, and always will.



    Exactly. Simply because some products have similar price points does not mean they serve the same roles. Clearly the iPad Mini & iPod Touch serve different purposes.

  • Reply 3 of 75

    [dupe]
  • Reply 4 of 75
    blastdoorblastdoor Posts: 2,358member
    What does that really even mean?

    What "investment" is required for the iPod Touch? All they have to do (and more or less all they've ever done) is put N-1 generation iPhone components into the N generation iPod Touch. How hard is that? And why would they ever stop doing that? It seems like a great way to make a little bit more money off of the iPhone investments that they've already made. A big chunk of the fixed costs in something like the A6 is in the development. The more units you can spread that fixed cost across the better, so why not always put A(n-1) in the iPod Touch?

    The only sense I can make of this statement is that perhaps the physical design won't change for a long time. But I don't see that as a very big deal.
  • Reply 5 of 75
    mj1970mj1970 Posts: 9,002member

    Quote:

    Originally Posted by Tallest Skil View Post


    So how are all these 12 year olds affording $70 a month for an iPhone, anyway?



     


    Mom and Dad.


     


     


    Quote:

    Originally Posted by Tallest Skil View Post


    The iPod touch still has a huge market, and always will.



     


    I agree about present., not as sure about "always will."


     


    It's possible that iPod touch will get cannibalized, but not likely from from iPad mini. The iPod touch and iPad mini are different animals.


     


    Cannibalization from from iPhone is more realistic. But it can also come from the bottom: iPod nano. As iPod nano gains more functionality (and it wouldn't have to be a lot of functionality) iPod touch loses it's appeal...then iPad mini becomes a potential cannibal for iPod touch.

  • Reply 6 of 75
    andysolandysol Posts: 2,506member


    Seeing that it is overpriced because it doesn't offer a smaller model- yup.


     


    It should have offered an 8gb $229 or $199 version.  It didn't- and I, too, predicted the end of the Touch.  Then they come out with the $30 too expensive iPad mini (psychologically speaking).  I would have bought a $229 iPod Touch and a $299 iPad mini.  As it stands, I'll get neither.


     


    I appreciate their stance of making quality products- which is how it should be- but you can't have Tallest saying "How are 12 year olds going to afford..." and then price it at 300 bones!  Give a smaller price point for those 12 year olds...

  • Reply 7 of 75
    mjtomlinmjtomlin Posts: 2,422member

    Quote:

    Originally Posted by Blastdoor View Post



    The only sense I can make of this statement is that perhaps the physical design won't change for a long time. But I don't see that as a very big deal.


     


    Yeah, that's what I'm guessing was meant... There's not much more they can do with it.

  • Reply 8 of 75
    andysolandysol Posts: 2,506member

    Quote:

    Originally Posted by MJ1970 View Post


     


    Mom and Dad.


     


     


     


    I agree about present., not as sure about "always will."


     


    It's possible that iPod touch will get cannibalized, but not likely from from iPad mini. The iPod touch and iPad mini are different animals.


     


    Cannibalization from from iPhone is more realistic. But it can also come from the bottom: iPod nano. As iPod nano gains more functionality (and it wouldn't have to be a lot of functionality) iPod touch loses it's appeal...then iPad mini becomes a potential cannibal for iPod touch.



    You're dead on MJ- it's also called "Mom and Dad's old iPhones".  They become the "Touch" or they get them on the phone plan with their old phones.

  • Reply 9 of 75


    Ming-Chi Kuo doesn't have a very strong track record in relation to Apple's future plans anymore.  He inaccurately predicted as late as the end of August that the 13" Retina MacBook Pro and a new 21.5" iMac would be launched in September before iPhone 5 a new iPod Touch.  (See: http://appleinsider.com/articles/12/08/31/iphone_5_ipad_mini_among_8_new_apple_products_coming_before_end_of_2012 )


     


    I understand AppleInsider wants to continue to compliment Kuo in order to continue to get more "juices" from him, but the fact is that he doesn't have as great a visibility into Apple's near-term product plan as AppleInsider wants to portray publicly.

  • Reply 10 of 75
    What good would an 8gb version of the touch be? Here's 4 apps and 12 songs...have fun sweetie!

    As long as they keep making iPhones, they'll keep making touches. All the work that goes into research and development of iPhone parts can turn right around and be used in a touch. It's like printing money.
  • Reply 11 of 75

    Quote:

    Originally Posted by Tallest Skil View Post


    So how are all these 12 year olds affording $70 a month for an iPhone, anyway? The iPod touch still has a huge market, and always will.



    I believe the iPad mini is going to cannibalize the iPod touch market.

  • Reply 12 of 75
    Analysts are clueless sometimes.
  • Reply 13 of 75
    nagrommenagromme Posts: 2,834member
    Apple has a hugely successful tablet in a segment nobody else has any traction in: pocket tablets. This device runs the same apps as the successful iPhone. It just got a huge upgrade in which Apple took it more seriously than ever. It%u2019s the flagship of the iconic iPod brand. It sells so well that other companies would kill for it, and reaches a market with needs/wants that no other Apple product can meet. They%u2019ve been advertising it on TV for the first time in ages.

    No, it%u2019s not on the way out. It will hold its place at the small end of the tablet market.
  • Reply 14 of 75


    Originally Posted by MJ1970 View Post

    I agree about present., not as sure about "always will."


     


    As iPod nano gains more functionality (and it wouldn't have to be a lot of functionality) iPod touch loses it's appeal...



     


    There will always be people who can't afford an iPhone. And why would it gain more functionality? That's why the iPod touch exists.





    Originally Posted by chadmatic View Post

    I believe the iPad mini is going to cannibalize the iPod touch market.


     


    Nope.

  • Reply 15 of 75

    Quote:

    Originally Posted by Blastdoor View Post



    What does that really even mean?

    What "investment" is required for the iPod Touch? All they have to do (and more or less all they've ever done) is put N-1 generation iPhone components into the N generation iPod Touch. How hard is that? And why would they ever stop doing that? It seems like a great way to make a little bit more money off of the iPhone investments that they've already made. A big chunk of the fixed costs in something like the A6 is in the development. The more units you can spread that fixed cost across the better, so why not always put A(n-1) in the iPod Touch?

    The only sense I can make of this statement is that perhaps the physical design won't change for a long time. But I don't see that as a very big deal.


    That's not even close. The new Touch is a redesign and is thinner, at 6.1mm, than the iPhone 5 is. So clearly Apple had to put investment into that. It's a different form factor. 


     


    I think Apple will look to take future iPhones to that form factor, but it's probably a couple of years away.

  • Reply 16 of 75

    Quote:

    Originally Posted by j1h15233 View Post



    What good would an 8gb version of the touch be? Here's 4 apps and 12 songs...have fun sweetie!

    As long as they keep making iPhones, they'll keep making touches. All the work that goes into research and development of iPhone parts can turn right around and be used in a touch. It's like printing money.


    I disagree. Apple knew small tablets would eventually kill the Touch. That's why they decided to do a small tablet themselves. Might as well cannibalize your own product. Nano can solve most folks' need of a small, portable music device. If they want gaming, video (in bigger size), and more they'll go with iPad mini.

  • Reply 17 of 75

    Quote:

    Originally Posted by johnswilson1 View Post


    I disagree. Apple knew small tablets would eventually kill the Touch. That's why they decided to do a small tablet themselves. Might as well cannibalize your own product. Nano can solve most folks' need of a small, portable music device. If they want gaming, video (in bigger size), and more they'll go with iPad mini.



    And if they don't, they'll go with the touch which does the same things but also fits in your pocket and costs less.

  • Reply 18 of 75
    irelandireland Posts: 17,743member

    Quote:

    Originally Posted by Tallest Skil View Post


    So how are all these 12 year olds affording $70 a month for an iPhone, anyway? The iPod touch still has a huge market, and always will.



     


    Always is a long time.

  • Reply 19 of 75
    gazoobeegazoobee Posts: 3,754member

    Quote:

    Originally Posted by Tallest Skil View Post


    So how are all these 12 year olds affording $70 a month for an iPhone, anyway? The iPod touch still has a huge market, and always will.



     


    There will "always be an England" too, (except one day there won't be).  


     


    I would expect that what the analyst means is that they will likely just leave the shell the way it is and update the internals year by year (or bi-yearly perhaps), until the waning interest in the product completely evaporates.  I already see people using old iPhones as media players even though they use something else for their phone and I would expect most kids would gravitate to the iPad mini more than the iPod touch after a generation or two.  

  • Reply 20 of 75
    irelandireland Posts: 17,743member

    Quote:

    Originally Posted by fishstick_kitty View Post



    Analysts are clueless sometimes.


     


    Tech analysts are clueless more often than sometimes.

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