If Apple is selling two and half times as many iPods now as they did in 2006, I don't think you can call that a slow down at all.
The paragraph you quoted said "For the 2010 holiday shopping season, though the iPod posted 250% more revenue than it did in 2006", but that is an error in the article. In the 2006 holiday quarter, iPod revenue was $2906 million. In the 2010 holiday quarter it was $3391 million (see graph at the bottom). That is a 16% increase, not 250%. It also said nothing about number of iPods, just revenue.
Looking at full financial years in Apple's reports (note that Apple's financial year ends in September):
2005: $4540M revenue, 22.5M iPods, average price $201
2006: $7676M revenue, 39.4M iPods, average price $194
2007: $8305M revenue, 51.6M iPods, average price $160
2008: $9153M revenue, 54.8M iPods, average price $167
2009: $8091M revenue, 54.1M iPods, average price $149
From independent comments by Apple at special events, I estimate that 12 million iPod Touches had been sold by the end of calendar 2008, and 32 million by the end of calendar 2009, so it seems that 2009 iPod sales were almost 40% iPod Touch. There must have been a similar proportion of Shuffles being sold for the average price to be as low as $149, with most of the rest being Nanos.
Total iPod sales declined in 2009, but there was a financial crisis.
Since then, we have these figures for 6 months from Oct 2009 to Mar 2010:
Q1+Q2 2010: $5252M revenue, 31.8M iPods, average price $165
(Q1 is the holiday quarter ending Dec 2009, so this will be more than half the iPods sold in FY2010.)
iPod unit sales are down 6% but revenue is up 4% (compared to the same period a year earlier), so a greater proportion of iPod sales so far this financial year are the expensive models (Touch).
Generally looking good for steady or increasing sales of iPod Touch, but the iPad may shift the goalposts. We'll know more in a couple of weeks when Apple releases the results for the June quarter (first one in which iPads were sold).
I have a Ford Edge with navigation and the Microsoft Sync system and I keep an iPod Nano plugged into the USB port. I can control the iPod with the nav system's touch screen or with voice commands.
I've seen this in action and liked it a lot. Just wish Apple had something similar for cars.
My Infiniti's connection is awful. It also keeps the iPod from suspending (hibernating?) when the car is off and within a day drains the iPod's battery.
Just got myself the 160gb classic. I figured I'd better get it before it's discontinued, since I need it as the music source for my car. Will probably stand me in good stead for a few more years. The Touch and the iPhone are way too dainty for that use.
Quote:
Originally Posted by antkm1
as this study shows, there are a lot of factors that weigh into the success or decline of the iPod. I think part of it is the fact the iPod had changed very little since 2006. My personal history of iPod purchases has been:
2005 - Ipod shuffle (getting my feet wet into the Apple way of life)
2006 - iPod Mini 16gig(purchased on ebay for $200)
2008 - iPod Classic 80gig (wanted my entire music library at a blink of an eye)
2008 - iPhone 3g 16gig (still have my iPod Classic, don't need the phone to do everything)
I see no date in mind to replace my Classic iPod. It's my music server for home, office, car, and travel. And i think that's all it needs to be. the iPod Touch doesn't work at a device for the car, and most car stereos suck at reproducing the UI of the iPod classic, so how can you make that any better? ... I love my iPod Classic, but would love a smaller form factor...throw in the iTunes store, wifi for updates to podcasts, keep the wheel and you'd have probably the final iteration and all I'd ever need.
You guys should have quite a few years to look forward to enjoying your perfect-for-purpose Classics.
My iPod Photo (60GB, 2004) is still my traveling auto jukebox and DJ-on-the-go music device - looks and works like new - and gets more attention for its now retro "bulk" than yet another person brandishing the latest iteration.
And my Sony belt clip am-fm digital radio from 1997 has survived several drops into sinks and bathtubs. All saving me moolah towards my next MBP and iPad 2.....
The iPod is still relevant as a product, probably not considered the most valuable Apple asset, as in if it fails Apple are history. Apple has always pushed on and the most successful products rarely die, they often morph into the next great thing.
The iPod is still the most popular stand alone music player, and still the envy of companies like Sony!!! Also the iPod touch is very popular and as others have question is this including in the report?
For me, and probably many others, the iPod Shuffle and Nano are still the music player to use at the gym or out jogging, just press play and go!
Apple's revenue numbers have historically been strongest during the winter holiday season (their fiscal Q1), even when all they sold was Macs. And fiscal Q2 (Jan-Mar) has always shown the weakest revenue.
But to me, it looks like Apple is trying to spread out their product releases as widely as possible throughout the year in order to give each new iPad, iPhone, and iPod line several months in the spotlight. This year iPad was on Apple's home page for six full months: Jan - Jun, but that might change if Apple gets really serious about Apple TV.
Interesting that Apple chooses to release products at the end of a quarter. I suppose this allows time for the launch and manufacturing to ramp up and for sales to begin in earnest in the following quarter.
So, if we continue the current trend of promoting newly released products, without adding a beefed up Apple TV into the product mix, we get this:
Q1: Oct-Dec: Holiday promotion of all Apple products
Q2: Jan-Mar: iPad promotion
Q3: Apr-Jun: iPad promotion
Q4: Jul-Sep: iPhone promotion
If we add a new, industrial-strength Apple TV after iPad has been sufficiently established, we could see the focus change each quarter:
Q1: Oct-Dec: Holiday promotion of all Apple products
Q2: Jan-Mar: Apple TV promotion
Q3: Apr-Jun: iPad promotion
Q4: Jul-Sep: iPhone promotion
Oh, and I think Apple should stay away from CES. Staging a special Apple media event in January after CES does two things to Apple's benefit: 1) It steals attention from CES and makes it less important, and 2) it reinforces consumers' perception that Apple is the innovator that everyone else copies in a blind panic.
The latter was glaringly obvious this January, as many slate PCs were announced half-heartedly, as though the manufacturers were afraid of making huge mistakes, in public, just before iPad was to be announced. It's as if they were lost in the woods and frozen in their tracks. Remember Ballmer's timid demo of the HP Slate? No? I don't blame you.
I forgot to add that if iTunes gains cloud-based streaming functionality, it could add some sizzle to the iPod announcement in Q4. Apple's product quarterly focus could look like this:
I saw a guy just this week using one of those. The funny part about it was that he was listening through iPhone ear buds.
that is funny. Well, if anyone watched "Lost", the character of Hurley had a portable disc player for the first season or two of the show, until the batteries died, and that was 2004.
Just like in real life, profit is what really matters. It would be more interesting to derive the exacting profit margins for iPods and then tally them as a percentage of Apple's profits.
Gross revenues don't mean much if your making a product that has razor thin margins. Just ask Dell and HP.
I don't believe the iPod died at all, or is even waning. The iPhone is the iPod, evolved. Apple realized that people had two devices and one resource they all wanted: a phone, an iPod, and the Internet. iPod itself evolved.
Exactly. I've had three or four different iPods over the years, but I finally ditched my touch for an iPhone 4 and I love it. This is my iPod now, and it has a phone, camera and GPS, too.
If people were leaving their iPods for Zunes (do they still make those?) or for some new technology that made MP3 players obsolete, that would be one thing. But if people are upgrading to a more expensive Apple device that happens to have a different name ... what's the problem?
First, there are no more than 10 devices in the entire HISTORY of consumer electronics that have sold 100 million - the ipod being one but more importantly, for most companies, it's like being a movie star but once that period is passed, most of them live on that glory for 10+ years ... look at Moto - while the RAZR phone didn't actually sell 100 million what was the follow up? The RAZR 2? Two very important things - a) Apple has launched essentially TWO additional multi-billion businesses (iphone should clear 100 million sold this year) on adding to it - the iphone at the start was clearly an ipod with touch features + a phone ... and the ipad is built on the ipod business of media ... but what is also more amazing - unlike most other companies that add features to a product but are forced to lower prices as the product life goes on - only Apple has maintained pricing and margins in moving people to the ipod touch ... AND has maintained its market share even though competitors can clearly come in and undercut them severly and yet, the ipod maintains about a 70% market share. NO ONE ELSE CAN CLAIM THAT ... people are pretty quick to call it the end of the ipod era but are the ipad and iphone, merely an extension of the ipod ...
P.S. The iPod touch was definitely the "gateway drug" to the iPhone for me. I resisted increasing my monthly cell phone bill for a long time, but after getting to like this "pocket computer" and then seeing AT&T cut their data prices in half, the time was right.
I am curious as to why you think Q4 of 2010 is going to be so outstanding for Apple? I mean you are estimating a ~21% increase over the holiday quarter of that same fiscal year. The largest similar growth was in 2008 and Q4 was only ~10% higher than Q1. Is there anything in-particular that you believe would fuel such an amazing quarter?
Every other Apple mobile device is an iPod++ Zaky! Duh!
The iPod is software. Even if the device dies, the iPod lives on, subsumed into its descendants and siblings, adding its discrete value to the selling price of its new host device. And why shouldn't the iPod device die when there are more capable options that encapsulate it? How much less would the iPhone and iPad be worth to consumers if they lacked the iPod's functionality, now massively enhanced? $50? $100? I hope you're getting the picture because it's certainly writ very large and clear to those who care to look at these things. Blindingly obvious some might say.
Viewed in this light, iPod sales have never been higher!
As the French say 'The more things change, the more they stay the same.
Sometimes, self-appointed wannabe analysts fall over themselves trying to make a point. You seem to have fallen over Mr. Zaky. Big time. What happened?
Apple has never sold so many iPods as it does now and will keep on selling more going forward. Count the sales per model. Errr... count the competition's pmp sales.
Apple sells what (?), 5, 6, 10, 20 times as many computers as they used to sell pre June 2007. Can you see that? Count the OSX platform variants in play. Hell, they sold 3 million computers aka iPads aka iPods in just 80 days. They sold another 1.7 million iPod/computer/phones in just a couple of days.
Andy. Andy baby. Asleep at the wheel?
Let's go just a little further, Mr. Zaky. Let's call it 'walking the extra mile', shall we?
When is an iPod Touch or iPad a phone? When you use them to talk to people, silly! It doesn't have to be a cellphone to qualify as a phone. FaceTime on Wi-Fi anyone?
An iPhone can be an iPod any time you want. So can an iPad.
An iPod Touch and iPad can be a phone much of the time, or most of the time if you make it so, as Jean-Luc might say.
Apple sells many more phones than all but Nokia. Count the devices it sells on all its the call-capable platforms.
That's what massively disrupting markets is all about. Take the market's preconceptions, and yours too it seems, chew on them and spit them out. Ring the changes. Hand out Kleenex to your competitors if you feel charitable.
Your financial stats may be numerically accurate (as in Zaky says 'X iPods sold, contributing Y to revenues which is Z% of total revenues yada yada ...') but all that is just so much simplistic doodoo. That may be upmarket bs, but it's still bs.
You might as well measure the number of Christians in the world by counting how many go to Church every week. They're out there, everywhere. You just have to make the effort to count them properly.
As sales of trucks declined with the rise of the car, the limo, the Mini, the roadster, etc., did we lose sight of the fact that the new variants retained the four wheels, the seats... etc .... all that the truck possessed in fact? Did fewer people drive around as a result?
This post is just empty nonsense. I don't mean to be rude but it is the kind of elementary mistake no serious analyst would make. That's why there aren't more than a handful of such people in the whole world. Are you building up some steam to short AAPL by any chance? That wouldn't be .... nice.
The iPod is dying. Long live the iPod+++.
Apple sells more iPods today than ever before. It's all uphill for the iPod from now on. No, no not downhill, I said UPHILL!
Buy Apple!
And buy AAPL while you're at it.
It's gonna make you prrrrrrroud!!
This is edited down from a response first posted elsewhere.
"After years of serving as Apple's main source of revenue, the iPod's influence on the company's financial health has diminished"
The article starts off with this bold claim, and then doesn't substantiate it. Your data only shows a single quarter where the iPod contributed over 50% of the revenue. It seems to me that your data shows that the Mac was Apple's main revenue source in every year and every quarter except one.
Where did you come up with this misleading headline?
I am curious as to why you think Q4 of 2010 is going to be so outstanding for Apple? I mean you are estimating a ~21% increase over the holiday quarter of that same fiscal year. The largest similar growth was in 2008 and Q4 was only ~10% higher than Q1. Is there anything in-particular that you believe would fuel such an amazing quarter?
In Apple's fiscal year, Q4 2010 is July-Sept., so I think this is the period to which he refers. From what I've read of Zacky's analysis, the anticipated big drivers of earnings growth in this and the next quarters are the iPhone and iPad.
isn't that some measure of success that many companies strive to attain? a device so successful that when you embed it into a variety of other devices that some portion of the general public simply takes it for granted.
Comments
I saw a guy just this week using one of those. The funny part about it was that he was listening through iPhone ear buds.
Heh...a woman at my gym uses a discman and it cracks me up.
If Apple is selling two and half times as many iPods now as they did in 2006, I don't think you can call that a slow down at all.
The paragraph you quoted said "For the 2010 holiday shopping season, though the iPod posted 250% more revenue than it did in 2006", but that is an error in the article. In the 2006 holiday quarter, iPod revenue was $2906 million. In the 2010 holiday quarter it was $3391 million (see graph at the bottom). That is a 16% increase, not 250%. It also said nothing about number of iPods, just revenue.
Looking at full financial years in Apple's reports (note that Apple's financial year ends in September):
2005: $4540M revenue, 22.5M iPods, average price $201
2006: $7676M revenue, 39.4M iPods, average price $194
2007: $8305M revenue, 51.6M iPods, average price $160
2008: $9153M revenue, 54.8M iPods, average price $167
2009: $8091M revenue, 54.1M iPods, average price $149
From independent comments by Apple at special events, I estimate that 12 million iPod Touches had been sold by the end of calendar 2008, and 32 million by the end of calendar 2009, so it seems that 2009 iPod sales were almost 40% iPod Touch. There must have been a similar proportion of Shuffles being sold for the average price to be as low as $149, with most of the rest being Nanos.
Total iPod sales declined in 2009, but there was a financial crisis.
Since then, we have these figures for 6 months from Oct 2009 to Mar 2010:
Q1+Q2 2010: $5252M revenue, 31.8M iPods, average price $165
(Q1 is the holiday quarter ending Dec 2009, so this will be more than half the iPods sold in FY2010.)
iPod unit sales are down 6% but revenue is up 4% (compared to the same period a year earlier), so a greater proportion of iPod sales so far this financial year are the expensive models (Touch).
Generally looking good for steady or increasing sales of iPod Touch, but the iPad may shift the goalposts. We'll know more in a couple of weeks when Apple releases the results for the June quarter (first one in which iPads were sold).
A friend asked me if he should get a iPod nano. I told him spend a tiny bit more and get an iPhone 4.
My girlfriend got me the iPhone 4 yesterday! OMFG!
Reception issue?
Get a bumper!
Lol!
I have a Ford Edge with navigation and the Microsoft Sync system and I keep an iPod Nano plugged into the USB port. I can control the iPod with the nav system's touch screen or with voice commands.
I've seen this in action and liked it a lot. Just wish Apple had something similar for cars.
My Infiniti's connection is awful. It also keeps the iPod from suspending (hibernating?) when the car is off and within a day drains the iPod's battery.
Just got myself the 160gb classic. I figured I'd better get it before it's discontinued, since I need it as the music source for my car. Will probably stand me in good stead for a few more years. The Touch and the iPhone are way too dainty for that use.
as this study shows, there are a lot of factors that weigh into the success or decline of the iPod. I think part of it is the fact the iPod had changed very little since 2006. My personal history of iPod purchases has been:
2005 - Ipod shuffle (getting my feet wet into the Apple way of life)
2006 - iPod Mini 16gig(purchased on ebay for $200)
2008 - iPod Classic 80gig (wanted my entire music library at a blink of an eye)
2008 - iPhone 3g 16gig (still have my iPod Classic, don't need the phone to do everything)
I see no date in mind to replace my Classic iPod. It's my music server for home, office, car, and travel. And i think that's all it needs to be. the iPod Touch doesn't work at a device for the car, and most car stereos suck at reproducing the UI of the iPod classic, so how can you make that any better? ... I love my iPod Classic, but would love a smaller form factor...throw in the iTunes store, wifi for updates to podcasts, keep the wheel and you'd have probably the final iteration and all I'd ever need.
You guys should have quite a few years to look forward to enjoying your perfect-for-purpose Classics.
My iPod Photo (60GB, 2004) is still my traveling auto jukebox and DJ-on-the-go music device - looks and works like new - and gets more attention for its now retro "bulk" than yet another person brandishing the latest iteration.
And my Sony belt clip am-fm digital radio from 1997 has survived several drops into sinks and bathtubs. All saving me moolah towards my next MBP and iPad 2.....
The iPod is still the most popular stand alone music player, and still the envy of companies like Sony!!! Also the iPod touch is very popular and as others have question is this including in the report?
For me, and probably many others, the iPod Shuffle and Nano are still the music player to use at the gym or out jogging, just press play and go!
But to me, it looks like Apple is trying to spread out their product releases as widely as possible throughout the year in order to give each new iPad, iPhone, and iPod line several months in the spotlight. This year iPad was on Apple's home page for six full months: Jan - Jun, but that might change if Apple gets really serious about Apple TV.
Interesting that Apple chooses to release products at the end of a quarter. I suppose this allows time for the launch and manufacturing to ramp up and for sales to begin in earnest in the following quarter.
So, if we continue the current trend of promoting newly released products, without adding a beefed up Apple TV into the product mix, we get this:
Q1: Oct-Dec: Holiday promotion of all Apple products
Q2: Jan-Mar: iPad promotion
Q3: Apr-Jun: iPad promotion
Q4: Jul-Sep: iPhone promotion
If we add a new, industrial-strength Apple TV after iPad has been sufficiently established, we could see the focus change each quarter:
Q1: Oct-Dec: Holiday promotion of all Apple products
Q2: Jan-Mar: Apple TV promotion
Q3: Apr-Jun: iPad promotion
Q4: Jul-Sep: iPhone promotion
Oh, and I think Apple should stay away from CES. Staging a special Apple media event in January after CES does two things to Apple's benefit: 1) It steals attention from CES and makes it less important, and 2) it reinforces consumers' perception that Apple is the innovator that everyone else copies in a blind panic.
The latter was glaringly obvious this January, as many slate PCs were announced half-heartedly, as though the manufacturers were afraid of making huge mistakes, in public, just before iPad was to be announced. It's as if they were lost in the woods and frozen in their tracks. Remember Ballmer's timid demo of the HP Slate? No? I don't blame you.
Q1: Oct-Dec: iTunes/iPod promotion + Holiday sales hype
Q2: Jan-Mar: Apple TV promotion
Q3: Apr-Jun: iPad promotion
Q4: Jul-Sep: iPhone promotion
I saw a guy just this week using one of those. The funny part about it was that he was listening through iPhone ear buds.
that is funny. Well, if anyone watched "Lost", the character of Hurley had a portable disc player for the first season or two of the show, until the batteries died, and that was 2004.
Gross revenues don't mean much if your making a product that has razor thin margins. Just ask Dell and HP.
I don't believe the iPod died at all, or is even waning. The iPhone is the iPod, evolved. Apple realized that people had two devices and one resource they all wanted: a phone, an iPod, and the Internet. iPod itself evolved.
Exactly. I've had three or four different iPods over the years, but I finally ditched my touch for an iPhone 4 and I love it. This is my iPod now, and it has a phone, camera and GPS, too.
If people were leaving their iPods for Zunes (do they still make those?) or for some new technology that made MP3 players obsolete, that would be one thing. But if people are upgrading to a more expensive Apple device that happens to have a different name ... what's the problem?
I am curious as to why you think Q4 of 2010 is going to be so outstanding for Apple? I mean you are estimating a ~21% increase over the holiday quarter of that same fiscal year. The largest similar growth was in 2008 and Q4 was only ~10% higher than Q1. Is there anything in-particular that you believe would fuel such an amazing quarter?
Every other Apple mobile device is an iPod++ Zaky! Duh!
The iPod is software. Even if the device dies, the iPod lives on, subsumed into its descendants and siblings, adding its discrete value to the selling price of its new host device. And why shouldn't the iPod device die when there are more capable options that encapsulate it? How much less would the iPhone and iPad be worth to consumers if they lacked the iPod's functionality, now massively enhanced? $50? $100? I hope you're getting the picture because it's certainly writ very large and clear to those who care to look at these things. Blindingly obvious some might say.
Viewed in this light, iPod sales have never been higher!
As the French say 'The more things change, the more they stay the same.
Sometimes, self-appointed wannabe analysts fall over themselves trying to make a point. You seem to have fallen over Mr. Zaky. Big time. What happened?
Apple has never sold so many iPods as it does now and will keep on selling more going forward. Count the sales per model. Errr... count the competition's pmp sales.
Apple sells what (?), 5, 6, 10, 20 times as many computers as they used to sell pre June 2007. Can you see that? Count the OSX platform variants in play. Hell, they sold 3 million computers aka iPads aka iPods in just 80 days. They sold another 1.7 million iPod/computer/phones in just a couple of days.
Andy. Andy baby. Asleep at the wheel?
Let's go just a little further, Mr. Zaky. Let's call it 'walking the extra mile', shall we?
When is an iPod Touch or iPad a phone? When you use them to talk to people, silly! It doesn't have to be a cellphone to qualify as a phone. FaceTime on Wi-Fi anyone?
An iPhone can be an iPod any time you want. So can an iPad.
An iPod Touch and iPad can be a phone much of the time, or most of the time if you make it so, as Jean-Luc might say.
Apple sells many more phones than all but Nokia. Count the devices it sells on all its the call-capable platforms.
That's what massively disrupting markets is all about. Take the market's preconceptions, and yours too it seems, chew on them and spit them out. Ring the changes. Hand out Kleenex to your competitors if you feel charitable.
Your financial stats may be numerically accurate (as in Zaky says 'X iPods sold, contributing Y to revenues which is Z% of total revenues yada yada ...') but all that is just so much simplistic doodoo. That may be upmarket bs, but it's still bs.
You might as well measure the number of Christians in the world by counting how many go to Church every week. They're out there, everywhere. You just have to make the effort to count them properly.
As sales of trucks declined with the rise of the car, the limo, the Mini, the roadster, etc., did we lose sight of the fact that the new variants retained the four wheels, the seats... etc .... all that the truck possessed in fact? Did fewer people drive around as a result?
This post is just empty nonsense. I don't mean to be rude but it is the kind of elementary mistake no serious analyst would make. That's why there aren't more than a handful of such people in the whole world. Are you building up some steam to short AAPL by any chance? That wouldn't be .... nice.
The iPod is dying. Long live the iPod+++.
Apple sells more iPods today than ever before. It's all uphill for the iPod from now on. No, no not downhill, I said UPHILL!
Buy Apple!
And buy AAPL while you're at it.
It's gonna make you prrrrrrroud!!
This is edited down from a response first posted elsewhere.
The article starts off with this bold claim, and then doesn't substantiate it. Your data only shows a single quarter where the iPod contributed over 50% of the revenue. It seems to me that your data shows that the Mac was Apple's main revenue source in every year and every quarter except one.
Where did you come up with this misleading headline?
Andy,
I am curious as to why you think Q4 of 2010 is going to be so outstanding for Apple? I mean you are estimating a ~21% increase over the holiday quarter of that same fiscal year. The largest similar growth was in 2008 and Q4 was only ~10% higher than Q1. Is there anything in-particular that you believe would fuel such an amazing quarter?
In Apple's fiscal year, Q4 2010 is July-Sept., so I think this is the period to which he refers. From what I've read of Zacky's analysis, the anticipated big drivers of earnings growth in this and the next quarters are the iPhone and iPad.
then again its not the year 3010 (or so) just saying - I'm not getting in line for it (yet).