I'd love to see an iPod nano with built in GPS (for running) and maps. I know this will never happen. It would simply kill potential Apple Watch sales.
People complaining that sales and profit are down..... Ummmm maybe just MAYBE the reason is because iPod hasn't been updated in years?? They should really differentiate the line from their other products. Maybe let the beats team handle it, they know what sells.
There's still a good market for iPod touch and I see kids with them all the time. Sometimes they even show up on reality TV shows. I know Kitchen Nightmares always hands them out to "modernize" waitresses taking your order and that's just one brilliant idea.
Apple owns the MP3 player market and though it isn't huge anymore why would they throw that whole market away?
People complaining that sales and profit are down.....
Ummmm maybe just MAYBE the reason is because iPod hasn't been updated in years??
They should really differentiate the line from their other products. Maybe let the beats team handle it, they know what sells.
There's still a good market for iPod touch and I see kids with them all the time. Sometimes they even show up on reality TV shows. I know Kitchen Nightmares always hands them out to "modernize" waitresses taking your order and that's just one brilliant idea.
Apple owns the MP3 player market and though it isn't huge anymore why would they throw that whole market away?
Agreed. $410M is not much for apple, but its still $410M.
People complaining that sales and profit are down.....
Ummmm maybe just MAYBE the reason is because iPod hasn't been updated in years??
They should really differentiate the line from their other products. Maybe let the beats team handle it, they know what sells.
There's still a good market for iPod touch and I see kids with them all the time. Sometimes they even show up on reality TV shows. I know Kitchen Nightmares always hands them out to "modernize" waitresses taking your order and that's just one brilliant idea.
Apple owns the MP3 player market and though it isn't huge anymore why would they throw that whole market away?
I think sales are down because an iPod isn't a product you buy every year. I think a ton of people still use mp3 players, but don't necessarily need to buy one often. I'm still using an iPod Classic. I bought 2 new ones when Apple discontinued them. The only other iPod I've bought is a Nano. I agree that there still is a big market for an iPod. All my nieces and nephews have an iPod touch. They are great for kids and adults as well.
but how much profit does Apple really get from iPod sales? Very little. They are better off focusing on their core products at this point.
The best iPods are 2 year old iPhones.
Keeps the low end form factors in place.
Shuffles and mini/nanos are a key part of the ecosystem. just like airport Extremes and Apple TVs. It expands the halo of the iOS ecosystem.
The iPod Touch is the question mark, but is a low cost adjunct to the iPhone 5s/6. (same parts minus the cellular).
I would guess there would be a new Mini/shuffle (aligning with Watch componentry) coming soon, and the Touch being retired or refreshed 'one last time' [to the current iphone 6 form factor].
It is also probably a not insignificant Enterprise device. How many restaurants and other retailers are scrambling for wireless POS terminals? What is the typical device today? an iPod Touch. Add Apple Pay and EMV credit cards to the mix, and you've got another market to dominate.
Correct. My company uses them as a small form factor tablet (the iPad mini is too big) where pocketability is needed and the main app is useful with a small screen. The ease of building and maintaining apps on iOS beats the tar out of almost anything else. We also use them as a digital signage device -- get a TV, a combo HDMI/USB cable that supplies output to the TV and charges using the TV's USB port, and a locking device and you've got a digital sign setup for < $600 where the usual is well north of $1000. Loads content using Wifi so we don't have to add a network cable drop.
Apple stores use them for their mobile POS. iPhone is overkill for many of these uses.
I can see a minor spec bump to maybe the A7 with more or less the same case design being the minimal, low fanfare update. It still has value as a low price point for entry into the iOS ecosystem.
If Apple wanted to (or thought they should) re-jump start iPod sales, they would reposition it in the marketplace as a game device or give it major new capabilities, and Jony Ive would design something purposefully suited to that new mission.
But for me, the iPhone, and soon the Watch, will have replaced my need for a dedicated music player.
I'm pleased Apple have the iPod as I have never owned a mobile phone and my 5th gen iPod touch is very useful indeed and holds all my music, keeping it off my iPad.
The touch will either be dropped completely or will be upgraded to 64-bit because the current iPod is unlikely to be able to run iOS9. An updated iPod touch with GPS would be really nice and make it a lot more useful still, but Apple may feel that's getting too close to the iPhone or mini 3G.
What about including an A7 chip, Touch ID, NFC, better cameras and larger screen (same as iPhone 6). Keep the price under $200 and up the basic storage to 32Gb....could be onto a winner there.
You are kidding me right? The iPhone 5S, WITHOUT NFC cost $549 with 16GB. So, you are saying remove the phone bit (which is about $10 or $20 from the BOM), and sell it for $200?
Personally, I'd rather they just killed off the iPod range completely. I know they won't, since it's a big market, but to me it's a dwindling market that isn't that interesting any more. Everyone I know, old and young, has a phone which has enough storage for music. Nobody has a music player.
If they leave that market, someone else will come in to fill it. Its a good preemptive move to stay there and fill that space.
I keep an iPod Touch in my car at all times to play music thru it. I use the touch to access the music. The factory radio is just a dumb terminal for me. Just update the music periodically. I don't want my phone attached to the radio. I think there is still a market for it. If Apple leaves the market, that will give space for someone to come in and claim it, and take off from there. That is exactly what Apple did. Apple needs to keep that space closed off as a preemptory strike.
Instead of the Nano/Shuffle you should use the Watch.
The iPod will die in a year or two once the Watch has 16GB of storage and GPS
Oh sure...show me BOM cost and talk. Same fking profit margin as iPhone. What's "losing money" comment about? Please.
Oh...using $350 Apple Watch + $100 Bluetooth headphone for the music while exercising instead of $49 iPod Shuffle or $149 iPod Nano with included wired headset? You got to be kidding me.
I agree with you on most things, but sometimes you're over your head with Apple Watch. Did iPod Touch die? iPhone can do everything iPod Touch does and more...just like Apple Watch can do everything that Nano and Shuffle do and more, but it doesn't mean it will kill the product. Why? because not everyone wants to get Apple watch. In fact, less than 10% of iPhone owners buy Apple Watch.
last years iPod revenue was $2 billion. This year will probably be less than $1 Billion. It is no secret that iPods have very low gross margins, probably about 25%.
So after you take out admin expenses the iPod business is probably making only $100 million in profit a year. That is very little for how much effort it takes to redesign a new iPod, set up new production lines, write software for it, ect.
Pure guess? BOM for $149 Nano is around $43 which is less than 30% of the device price while iPhone 6 and 6+ is around 32%-34%. That means profit margin of iPod is even better than iPhone. Numbers don't lie.
Your original creative accounting is now a fact? And now you're predicting $0 future profit by using your earlier "calculations" as evidence? Nice one, that's one way to "prove" your position.<ha!!>
Sorry, but I don't buy your figures as anything but boohockey. They don't do anything to these products, not even upgrade them to latest technology and they still sell $1B/year, that's a revenue stream you let sit and contribute minimal effort to keep going, if you can do a bit more effort and increase it significantly, you do that (if you have the resources), but you don't kill it, and that's possibly where Apple is at, assuming this report is accurate.
Personally, I hope they don't kill it, I have a Shuffle that I use for the gym, my iP6+ is nothing I'd ever be so stupid to take into the gym, or go running with, it's too big, but the Shuffle is perfect, and I know others are of a similar mind. These products do have use cases and they do sell, they just don't receive the love from Apple because, well, they'd rather sell you an $800 phone (requiring a SIM) than one of these cheaper devices (as would the telcos).
Completely agree. For gym purpose, Shuffle and Nano are blowing iPhone out of the water. BTW, profit margin on iPod is even higher than iPhone since the BOM costs less than 30% while iPhone is
Quote:
Originally Posted by sog35
In 2012 iPod made $7 billion in revenue
In 2013 it was $4 billion
In 2014 it was $2 billion
This year will probably be $1 billion
Next year probably $500 million
Apples profit margin is about 25%.
No doubt the iPod is much lower - probably 10-15%
That means next year Apple will make about $50 million in profit.
It is just not worth Apples time and money to invest in a device that the Watch will soon replace.
Some of you need to realize Apple is not a non-profit organization and they are thinking ten years from now. Who the hell would want an ipod 5 years from now? Apple is better served using there resources on a growing market instead of the dying mp3 market.
Dude...get your fact straight...Apple profit margin is 25% overall but it doesn't mean iPod profit margin is low. Compare side by side, cost of BOM for iPod lower than iPhone and you think Apple should focus on the higher cost to build product? Please. Money is money. 1 more billion won't hurt.
Comments
C'mon Apple, finish off the Point & Shoot camera's.
Thank you, Continuity.
I'd love to see an iPod nano with built in GPS (for running) and maps. I know this will never happen. It would simply kill potential Apple Watch sales.
Ummmm maybe just MAYBE the reason is because iPod hasn't been updated in years??
They should really differentiate the line from their other products. Maybe let the beats team handle it, they know what sells.
There's still a good market for iPod touch and I see kids with them all the time. Sometimes they even show up on reality TV shows. I know Kitchen Nightmares always hands them out to "modernize" waitresses taking your order and that's just one brilliant idea.
Apple owns the MP3 player market and though it isn't huge anymore why would they throw that whole market away?
People complaining that sales and profit are down.....
Ummmm maybe just MAYBE the reason is because iPod hasn't been updated in years??
They should really differentiate the line from their other products. Maybe let the beats team handle it, they know what sells.
There's still a good market for iPod touch and I see kids with them all the time. Sometimes they even show up on reality TV shows. I know Kitchen Nightmares always hands them out to "modernize" waitresses taking your order and that's just one brilliant idea.
Apple owns the MP3 player market and though it isn't huge anymore why would they throw that whole market away?
Agreed. $410M is not much for apple, but its still $410M.
People complaining that sales and profit are down.....
Ummmm maybe just MAYBE the reason is because iPod hasn't been updated in years??
They should really differentiate the line from their other products. Maybe let the beats team handle it, they know what sells.
There's still a good market for iPod touch and I see kids with them all the time. Sometimes they even show up on reality TV shows. I know Kitchen Nightmares always hands them out to "modernize" waitresses taking your order and that's just one brilliant idea.
Apple owns the MP3 player market and though it isn't huge anymore why would they throw that whole market away?
I think sales are down because an iPod isn't a product you buy every year. I think a ton of people still use mp3 players, but don't necessarily need to buy one often. I'm still using an iPod Classic. I bought 2 new ones when Apple discontinued them. The only other iPod I've bought is a Nano. I agree that there still is a big market for an iPod. All my nieces and nephews have an iPod touch. They are great for kids and adults as well.
The consumer use of the iPod Touch may have a dwindling audience, but the enterprise use may be the reason behind a refresh. Some uses could be:
* wireless POS terminal (DCGOO mentioned this above)
* corporate device for wifi calling only
* corporate device for using proprietary apps and databases (such as using the new IBM-designed apps)
* only accessed by TouchID
but how much profit does Apple really get from iPod sales? Very little. They are better off focusing on their core products at this point.
The best iPods are 2 year old iPhones.
Keeps the low end form factors in place.
Shuffles and mini/nanos are a key part of the ecosystem. just like airport Extremes and Apple TVs. It expands the halo of the iOS ecosystem.
The iPod Touch is the question mark, but is a low cost adjunct to the iPhone 5s/6. (same parts minus the cellular).
I would guess there would be a new Mini/shuffle (aligning with Watch componentry) coming soon, and the Touch being retired or refreshed 'one last time' [to the current iphone 6 form factor].
It is also probably a not insignificant Enterprise device. How many restaurants and other retailers are scrambling for wireless POS terminals? What is the typical device today? an iPod Touch. Add Apple Pay and EMV credit cards to the mix, and you've got another market to dominate.
Correct. My company uses them as a small form factor tablet (the iPad mini is too big) where pocketability is needed and the main app is useful with a small screen. The ease of building and maintaining apps on iOS beats the tar out of almost anything else. We also use them as a digital signage device -- get a TV, a combo HDMI/USB cable that supplies output to the TV and charges using the TV's USB port, and a locking device and you've got a digital sign setup for < $600 where the usual is well north of $1000. Loads content using Wifi so we don't have to add a network cable drop.
Apple stores use them for their mobile POS. iPhone is overkill for many of these uses.
The consumer use of the iPod Touch may have a dwindling audience, but the enterprise use may be the reason behind a refresh. Some uses could be:
* wireless POS terminal (DCGOO mentioned this above)
* corporate device for wifi calling only
* corporate device for using proprietary apps and databases (such as using the new IBM-designed apps)
* only accessed by TouchID
these are good points.
However....
For all of the above... the iPad Mini Retina (The ipad touch is a 'Mini Mini') is the key comparision here, not the iPhone.
And the pricing after this year for the current retina and a high end Touch will be darned close.
If Apple wanted to (or thought they should) re-jump start iPod sales, they would reposition it in the marketplace as a game device or give it major new capabilities, and Jony Ive would design something purposefully suited to that new mission.
But for me, the iPhone, and soon the Watch, will have replaced my need for a dedicated music player.
Apple will only get about $1 billion in revenue this year on iPod.
Would you have a link for that?
The touch will either be dropped completely or will be upgraded to 64-bit because the current iPod is unlikely to be able to run iOS9. An updated iPod touch with GPS would be really nice and make it a lot more useful still, but Apple may feel that's getting too close to the iPhone or mini 3G.
What about including an A7 chip, Touch ID, NFC, better cameras and larger screen (same as iPhone 6). Keep the price under $200 and up the basic storage to 32Gb....could be onto a winner there.
You are kidding me right? The iPhone 5S, WITHOUT NFC cost $549 with 16GB. So, you are saying remove the phone bit (which is about $10 or $20 from the BOM), and sell it for $200?
Umm, there kind of are already cellular-enabled iPod touches. We call them iPhones.
Personally, I'd rather they just killed off the iPod range completely. I know they won't, since it's a big market, but to me it's a dwindling market that isn't that interesting any more. Everyone I know, old and young, has a phone which has enough storage for music. Nobody has a music player.
If they leave that market, someone else will come in to fill it. Its a good preemptive move to stay there and fill that space.
I keep an iPod Touch in my car at all times to play music thru it. I use the touch to access the music. The factory radio is just a dumb terminal for me. Just update the music periodically. I don't want my phone attached to the radio. I think there is still a market for it. If Apple leaves the market, that will give space for someone to come in and claim it, and take off from there. That is exactly what Apple did. Apple needs to keep that space closed off as a preemptory strike.
because the Nano/Shuffle don't make any money.
Apple is not in the business of losing money.
Instead of the Nano/Shuffle you should use the Watch.
The iPod will die in a year or two once the Watch has 16GB of storage and GPS
Oh sure...show me BOM cost and talk. Same fking profit margin as iPhone. What's "losing money" comment about? Please.
Oh...using $350 Apple Watch + $100 Bluetooth headphone for the music while exercising instead of $49 iPod Shuffle or $149 iPod Nano with included wired headset? You got to be kidding me.
I agree with you on most things, but sometimes you're over your head with Apple Watch. Did iPod Touch die? iPhone can do everything iPod Touch does and more...just like Apple Watch can do everything that Nano and Shuffle do and more, but it doesn't mean it will kill the product. Why? because not everyone wants to get Apple watch. In fact, less than 10% of iPhone owners buy Apple Watch.
last years iPod revenue was $2 billion. This year will probably be less than $1 Billion. It is no secret that iPods have very low gross margins, probably about 25%.
So after you take out admin expenses the iPod business is probably making only $100 million in profit a year. That is very little for how much effort it takes to redesign a new iPod, set up new production lines, write software for it, ect.
Pure guess? BOM for $149 Nano is around $43 which is less than 30% of the device price while iPhone 6 and 6+ is around 32%-34%. That means profit margin of iPod is even better than iPhone. Numbers don't lie.
Your original creative accounting is now a fact? And now you're predicting $0 future profit by using your earlier "calculations" as evidence? Nice one, that's one way to "prove" your position.<ha!!>
Sorry, but I don't buy your figures as anything but boohockey. They don't do anything to these products, not even upgrade them to latest technology and they still sell $1B/year, that's a revenue stream you let sit and contribute minimal effort to keep going, if you can do a bit more effort and increase it significantly, you do that (if you have the resources), but you don't kill it, and that's possibly where Apple is at, assuming this report is accurate.
Personally, I hope they don't kill it, I have a Shuffle that I use for the gym, my iP6+ is nothing I'd ever be so stupid to take into the gym, or go running with, it's too big, but the Shuffle is perfect, and I know others are of a similar mind. These products do have use cases and they do sell, they just don't receive the love from Apple because, well, they'd rather sell you an $800 phone (requiring a SIM) than one of these cheaper devices (as would the telcos).
Completely agree. For gym purpose, Shuffle and Nano are blowing iPhone out of the water. BTW, profit margin on iPod is even higher than iPhone since the BOM costs less than 30% while iPhone is
In 2012 iPod made $7 billion in revenue
In 2013 it was $4 billion
In 2014 it was $2 billion
This year will probably be $1 billion
Next year probably $500 million
Apples profit margin is about 25%.
No doubt the iPod is much lower - probably 10-15%
That means next year Apple will make about $50 million in profit.
It is just not worth Apples time and money to invest in a device that the Watch will soon replace.
Some of you need to realize Apple is not a non-profit organization and they are thinking ten years from now. Who the hell would want an ipod 5 years from now? Apple is better served using there resources on a growing market instead of the dying mp3 market.
Dude...get your fact straight...Apple profit margin is 25% overall but it doesn't mean iPod profit margin is low. Compare side by side, cost of BOM for iPod lower than iPhone and you think Apple should focus on the higher cost to build product? Please. Money is money. 1 more billion won't hurt.