Just under 3.5 million iPods were sold this past holiday season compared to 33.8 million iPhones, according to Apple’s 2013 Q4 sales numbers. In fact iPod sales aren’t doing so hot, with a 35% year over year decrease in iPod sales. Looking at these numbers, it’s obvious that the iPod’s popularity is waning, especially when compared to other products in Apple’s lineup. But is this decrease in popularity being caused by the public or by Apple itself? And if Apple wanted to resurrect the iPod, what could it do?
Chart by ARS Technica
How Apple Views the iPod
When Apple first introduced the iPod, it was far from the most affordable option in the MP3 player market. In spite of its steep price, the iPod quickly gobbled up market share due to its seamless synchronization with iTunes, Apple’s digital media management application. Both were introduced within months of each other back in 2001. This was done with a purpose, as Tim Carmody from the Verge writes:
With iTunes and the iPod, Apple sold music more or less at cost, selling the idea and lifestyle of music to sell high-margin hardware and draw customers into its ecosystem.
This tight relationship between iTunes and the iPod may have been the golden ticket to profitability 13 years ago, but it is now losing relevancy with the growth of streaming music services.
Apple itself cannibalized the iPod’s market share by introducing the iPhone in 2007. Steve Jobs was quoted that year saying that the iPhone was “the best iPod we’ve ever made,” a statement that seems almost prophetic now. The popularity of the iPhone, and now the iPad, has stolen the iPod from the limelight. Additionally, Apple has made no changes to the iPod lineup since the middle of 2013. In spite of holding more than 70% of the MP3 player market, internally Apple has even dropped the iPod portion of its quarterly conference calls.
The pricing of Apple’s products is also curious. The 16GB iPod Touch sells for $229 while a 16GB iPad Mini sells for $299. In other words a $70 price difference is all that separates Apple’s flagship MP3 player from its entry level tablet. As a undecided consumer, you might very well go for the iPad Mini’s larger screen over the flagship iPod in spite of it lacking a Retina display – an upgrade that would cost you $299 extra.
The Struggle for the MP3 Player to Remain Relevant
Since MP3 players emerged, they fulfilled an awesome purpose: enabling users to carry a lot of music on a small device. Apple’s iPod was the creme of the crop and stood out among competitors with its ease of use and smart design. Together iTunes and the iPod made building and listening to your digital music library enjoyable.
Then streaming music services grew in popularity. These services do not encourage users to build their own digital music collections but rather entice them to pay for subscriptions to huge music libraries. The type of device that people use to access the service does not matter, but connectivity does. The iPod, unlike the iPhone, struggles in this area because the iPod can only connect to streaming music services when Wi-Fi is available.
It is hard to dispute the fact that the iPod is a redundant device for people who own an iPhone, which contains all of the functionality of an iPod but with constant connectivity.
The iPod: A Lot More than Just an MP3 Player
Though the iPod Touch is not as popular as it used to be, it could remain competitive in consumer electronics if it were marketed differently. On its own, the iPod Touch features some very strong selling points, including:
- Native iOS environment
- Costs $320 less than the iPhone 5c and $420 less than the iPhone 5s
- Thinner and lighter than its iPhone counterpart
- High quality Retina display
With these features, the iPod fills a usage gap between smartphones, which have high initial and ongoing ownership costs, and tablets, which are not as portable as an iPod. And this is how the iPod should be marketed.
It’s apparent that the iPod Touch isn’t merely an MP3 player, but rather an affordable device that runs iOS apps natively. For this reason the iPod can be positioned as an Apple product that is just as capable as its counterparts the iPhone and iPad.
Where might the iPod be most useful? In the workplace or even in families, where both situations might cause buyers to think twice before purchasing expensive iPhones just so employees or children can access iOS apps. If employees needs to utilize a credit card payment processing iOS app, for example, a company can enable them to do so using an iPod without having to purchase a pricey iPhone or encumber employees with a large iPad. Similarly youngsters can still use the smaller, cheaper iPod to play music, conduct online research and play games.
A $500+ iPhone, along with its related monthly cellular service fees, can be cost prohibitive. While an iPod’s connectivity is more limiting than the iPhone’s due to its dependence on Wi-Fi, the iPod could be useful for those who need to use the device only in Wi-Fi connected places such as office buildings or hospitals. Plus, various apps are available for the iPod that allow it to send texts and even make phone calls when no internet connection available. As far as iOS devices are concerned, the iPod Touch is a great entry-level option that is portable enough to be carried around easily, especially compared to the iPad.
The iPod can also be a handy tool for Web and social media professionals. Its photo and video capabilities, paired with a wide variety of iOS Web development apps, makes it far more powerful than you would think. Some standout iOS apps for these purposes are What The Font, Overgram and, of course, Paper. Plus if you use a Mac, you’ll see seamless interaction between your computer and your iPod. Android users can have the best of both worlds by using an Android device as their smartphone and an iPod as their iOS device. This opens up a lot more options in regards to the apps that could be available for both media creation and work productivity.
And finally the iPod can be substituted in corporate and industrial applications where app and cloud based programs need to run in an iOS environment, but at the fraction of the cost of an iPhone. The healthcare industry is a good example of this, where an iPod can be utilized to interface with electronic medical records to quickly access patient data and charts. According to Leo Sun at the Motley Fool, Siri developer Nuance also has a huge footprint in healthcare with its voice capture, recognition and documentation products, which assist physicians in improving their daily workflow. iPods would be an attractive iOS device option in situations where people, such as nurses who are often on the go and need to carry multiple occupational tools, need something small and light. Healthcare administrators too can find comfort in the fact that iPods do not have the ongoing cellular service costs.
The iPod may be the king of the MP3 players, but as long as it wears that crown, it will become irrelevant very soon. If the iPod were portrayed more as an ‘iPhone Lite,’ its future would be brighter. That type of product positioning will start catching consumers’ eyes again.
