BYTE OF THE APPLE

July 26, 2009, 8:55PM EST

The iPod Is Dead. Long Live the iPod

Traditional versions of the iconic device are a thing of the past, 
but future iterations will have a long and vibrant future

By Arik Hesseldahl

I was recently cleaning out a closet and came across an interesting 
artifact: my first iPod.

It was nearly eight years ago that I was among the very first people 
in New York City to carry around the first-generation iPod. About the 
size of a pack of cigarettes, it was advertised with the tagline "A 
thousand songs in your pocket." I can even remember the song used in 
the first TV spot: Take California by The Propellerheads.

Since then, I've upgraded to a 2007 model boasting a 160-gigabyte 
hard drive that makes holding a mere thousand songs seem quaint. 
Before long, I will no doubt be waxing nostalgic about this music 
player as well-one that, at not even half full, holds 5,231 songs, 
141 videos, and 228 podcasts.

FIRST QUARTERLY DROP IN IPOD SALES

The iPod as many of us have known it is on the wane and giving way to 
a more feature-rich family of devices that in time will bear little 
resemblance to the trailblazing digital music players that helped 
Apple capture 70% of the North American market. Evidence of the 
iPod's decline came July 21, when Apple disclosed its first quarterly 
decline in iPods sold. In the three months ended in June, Apple 
(AAPL) sold 10.2 million iPods, versus 11 million a year earlier.

Anticipation of the drop-off is "one of the original reasons" Apple 
developed the iPhone and the WiFi-enabled iPod touch, Apple Chief 
Financial Officer Peter Oppenheimer said on a July 21 conference call 
with analysts. Apple is prepared for lower sales of what it calls 
"pocket products:" the iPod shuffle, nano, and classic.

At the same time, the iPod business "will last for many, many years," 
Apple believes. The company has good reason to want to extend the 
life of a product line that's generated $38 billion on sales of 218 
million units, catapulting Apple ahead of SanDisk (SNDK), Microsoft 
(MSFT), Toshiba (6502.T), and others.

...

http://www.businessweek.com/technology/content/jul2009/tc20090726_261031.htm

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