iPod Redux
By Steve Smith -- TWICE, 7/25/2005
In last year's Success Stories issue (TWICE, July 26, 2004) I dedicated this column to the subject of Apple's iPod and its overwhelming popularity.
At the risk of repeating myself, I'd like to return to the same subject, the iPod. Why? By coincidence, several unrelated reports and stories crossed my desk in the past couple of weeks concerning this juggernaut.
The first instance was when TWICE's senior editor Joe Palenchar was planning to do a Success Story report for this issue on MP3 players, based on unit sales reports from our friends at The NPD Group. He peeked in my office to show me the list and it was remarkable. For the period May 2004 to April 2005 NPD's entire top 10 in MP3 players was populated by some type of Apple iPod, an amazing performance.
Joe suggested that he cover another category, home theater in a box, whose top 10 is far more varied. I agreed, thinking that everyone would know about how iPod became the Secretariat of the business, but in retrospect that could have been a mistake. I hope this column rectifies that oversight.
The next item that crossed by desk was Apple's fiscal third-quarter report (see p. 6). Apple shipped 6.2 million iPods in the third quarter, ended June 25, accounting to $1.1 billion in revenue, compared with 860,000 units shipped in the third quarter last year. That represents a 616 percent jump in unit sales and 343 percent in dollars. And Apple reported it sold its 500 millionth iTunes song.
Senior editor Doug Olenick did a little research and found that in the two quarters prior to the fiscal third-quarter, Apple sold 6.5 million and 5.3 million units, respectively.
And Apple is not sitting on its laurels. The Wall Street Journal and other media outlets reported last week that Apple's iTunes Music Store is in discussions with major recording companies to license music videos that could be sold through the online outlet. While Apple didn't comment, several close to the company say a September announcement is possible.
Apple has garnered most of the profits from iPod, and rightly so. But home and car audio suppliers, and accessories makers have introduced products to tap into iPod's success. In this issue take a look at Sonnace's iPort (p. 34) and Belkin's TuneStage accessory for home theater (p. 44).
On the same page as the Belkin story is a quarterly column written by members of the Consumer Electronics Association's accessories division, in this case Michelle Zenner Kohler of Shure. While stressing the many opportunities to sell iPod accessories, she makes an excellent point about the essence of iPod: “It [is] a combination of excellent product design, smart marketing and great timing.” Zenner Kohler added that iPod features “an unprecedented amount of memory, simple interface and an elegant design.”
There have been few products in the CE industry over the years that have had the type of success Apple has enjoyed with iPod. Yet smart marketing, excellent product design and reliability, and ease of operation are qualities that can be adapted to many existing products. Many are profiled in the Success Stories features that appear in this issue. But that is easier said that done. Apple should be congratulated one more time because something like iPod happens few times in a generation.
And once again a special thank you to The NPD Group for sharing their unit sales information with TWICE and you, our readers.
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