Apple’s iPod – This transformed the way we listen to music. And it helped turn Apple into one of the most valuable companies in the world. Apple has sold more than 400 million iPods since launching them in 2001 and over 35 billion songs.
In 1999, the US music industry had its biggest year yet. Around this time, two things were exploding in growth. Over 40% of households had a computer. And the internet was rapidly gaining users. A new market for digital media was emerging. CDs made up over 80% of US music revenue at the time. You could listen on a big stereo, a portable CD player, or rip an entire album to your computer. But CD players and early portable media players had a lot of issues.
They were big and clunky, would often skip during playback, and neither held many songs. Apple saw this as an opportunity. It considered the competition totally inadequate, and it wanted to create something that was smaller and more powerful. But Apple didn’t know exactly what this device was.
Until its former head of hardware, Jon Rubinstein, met with Toshiba at a Macworld expo in Tokyo. Rubinstein was shown a 1.8-inch hard drive, which was incredibly small for the time. This new hard drive combined storage and portability. Exactly what Apple was looking for. Apple’s new media player was now possible.
The first iPod was announced on October 23, 2001. It had a 5-gigabyte capacity, cost $399, and promised to hold 1,000 songs in your pocket. In 2020, that might sound a bit underwhelming. Compared to a 2019 iPod Touch, it had 84% less storage and, adjusted for inflation, cost almost $400 more. And it was super chunky.
But compared to other products at the time, it looked and functioned better. It held a lot more songs, and the now iconic scroll wheel made it easy to navigate a big music library. Before the iPod, there really wasn’t an easy way to take a lot of music with you on the go. It really set the stage for Apple to be the dominant player when it comes to mobile devices.
But not everyone saw the iPod as the success it would become. Initial reviews were critical due to its high price and limited functionality. The New York Times quoted one analyst who said: “It’s a nice feature for Macintosh users. But to the rest of the Windows world, it doesn’t make any difference.“
It seemed like an expensive product that only targeted a relatively small portion of computer users. What really made the iPod so successful, and it really boils down to one thing, was that it was very easy to use. The iPod did one thing, and it did it really well. Back in 2001, it was actually, you know, pretty sleek and portable. The iPod was almost like a status symbol. You wanted to show off your music collection.
Fall Of iPod
IPod sales began to decline in 2008, while the iPhone’s growth was massive. At the time, Apple was still releasing new models of the iPod. But it would soon abandon its own product. In 2009, then Chief Financial Officer Peter Oppenheimer said, “We expect our traditional MP3 players to decline over time as we cannibalize ourselves with the iPod Touch and the iPhone.“
In 2011, iPhone sales overtook the iPod. Three years later, Apple discontinued the iPod Classic. At the time, the iPod was less than 2% of Apple’s revenue. It was clear that the iPod’s days were numbered. On an earnings call in 2014, Tim Cook even said, “All of us have known for some time that iPod is a declining business.”
Finally, in 2017, Apple discontinued the Nano and Shuffle. These were the last of Apple’s devices that didn’t connect to the internet, which meant they couldn’t use the services that Apple was focusing on, like the App Store, Apple Music, and Apple TV Plus.
But the death of the iPod also closes a chapter on gadget history. Single-purpose devices like the iPod Classic feel antiquated next to smartphones and tablets that are essentially portable computers. Unlike the Apple Watch, which acts as a companion to your smartphone, the iPod was just redundant.
Even though it defined a product category, it couldn’t save itself from its own company. But it was also hurt by a larger music industry trend. As streaming services like Pandora and Spotify grew, people started buying music less. Even Apple is replacing iTunes with its streaming service, Apple Music. In fact, streaming is now the largest source of US music industry revenue.
It’s Not The End [Yet]
But the iPod isn’t completely dead yet. Apple refreshed its iPod Touch in 2019 with a faster processor and more storage options. So the iPod isn’t totally irrelevant. It can certainly feel that way. A new iPod touch kind of just gives Apple another device that people can access their services on. And iPods still have a few uses. They’re good devices for kids, going to the gym, or for people who still like owning music.
But in 2020, when our devices can do everything and go everywhere, it seems unlikely that a single-purpose gadget could find mass success again.