The Apple iPod Turns Five
No other media player has come close to its success since its launch in 2001. Where will the iPod go in the next five years?
For a little white box that was greeted almost universally with disappointment, Apple Computer's (AAPL) iPod has come a long way since its debut five years ago.
Initial responses ranged from warm to openly dismissive. "Lame" was the final word of a reaction to the player on Slashdot. Others griped that comparably priced players from rivals such as Creative Technology (CREAF) and Archos stored four times as much music or pointed to devices that stored the same amount for far less. Another drawback: The first iPod didn't work with PCs running the Microsoft (MSFT) Windows operating system.
But the naysayers eventually changed their tune, and the iPod went on to conquer the open territory that was the digital music world in 2001. The iPod soon worked with Windows PCs, and by 2003 the iTunes Music Store debuted and revolutionized how music was sold. If you doubt that statement, go visit your local Tower Records store—if it's still open.
Musical Hegemony
Apple has sold nearly 68 million iPods, generating about $14 billion in sales. And if previous holiday seasons are any indicator of future results, Apple could record the sale on its 100 millionth iPod before the end of the calendar year. In fiscal 2006 alone, the iPod business accounted for nearly 40% of Apple's $19.3 billion in revenue. And it's profitable, too. Teardown analyses by market research firm iSuppli have found that Apple usually can expect a 50% gross margin on every iPod it makes (see BusinessWeek.com, 9/20/06, "The Skinny on Apple's New Nanos").
Established electronics companies such as Sony (SNE), Samsung, Toshiba (TOSBF), and Panasonic (MC) have tried to confront the iPod onslaught and largely failed (see BusinessWeek.com, 9/29/06, "Calling All Media Players"). A billion-dollar business has sprung up around the more than 1,000 different iPod accessories, whose makers are hawking leather cases, speakers, and even toilet-paper rollers (see BusinessWeek.com, Slide Show: "The Ultimate iPod Accessories").
Meanwhile, companies large and small have jockeyed for the right to supply Apple with the components that go inside the iPod. Toshiba and Hitachi (HIT) have supplied hard drives. Companies such as Samsung, Hynix Semiconductor (HXSCF), and Toshiba have supplied memory chips, while PortalPlayer (PLAY), a tiny media-chip supplier, nearly owes its very existence to having supplied Apple with chips for the iPod.
Next Stop, Wireless?
So where does Apple take iPod in its next five years? Microsoft's Zune player, due to hit the market soon, will boast wireless fidelity, or Wi-Fi, capabilities. The device will let users share songs from one player to the next. Apple CEO Steve Jobs has been dismissive of Zune. In a published interview he said, "It takes forever," and "By the time you've gone through all that, the girl's gotten up and left."
Those remarks aside, it looks increasingly likely future iterations of iPod will also contain wireless technology. A long-rumored hybrid joining an iPod to an Apple-made wireless phone has yet to materialize, but a partnership giving phones made by Motorola (MOT) the ability to play songs from iTunes playlists did. Other rumors have been fueled by Apple's many patent filings suggesting it might be looking for a way to combine its iPod with a satellite radio service such as XM Satellite Radio (XMSR) or Sirius Satellite Radio (SIRI).
Whatever direction the iPod takes, its first five years will be hard to replay.
http://www.businessweek.com/technolo...eek+exclusives
Damn, its been 5 years and im still managing to live without one LOL
How many of you folks hve an iPod?
Regards,
Lee
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Originally Posted by Lee
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