Could the iPod Be On Its Deathbed?

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If sales of Apple's iPod are any indication, the heyday of the MP3 player is over and done with.

iPod sales have been steadily declining since their peak at 22.7 million in December 2008, and analysts estimate another 7.2 percent drop over the quarter that just ended.

Apple still commands 70 percent of the MP3 player market, but it's clear that other mobile devices, namely smartphones and tablets, can do the job of an MP3 player (while performing a myriad of other functions, too).


In September of last year, Apple dramatically revamped its line of iPods, even giving the iPod Touch some features that were unique to the iPhone 4 at the time, namely FaceTime. Smartphones are increasingly dominating U.S. mobile phone purchases, and as consumers purchase the feature-rich devices, they no longer have a need for the single-purpose MP3 player. Rumors have blazed for years that Apple would discontinue one (typically the iPod Classic) or more iPod models, but it hasn't happened yet.

It's worth nothing that for the first time since the iPod Touch was introduced, it's not being included in Apple's Back to School promo as a freebie with a Mac purchase. The iPod Touch was replaced with a $100 iTunes gift card - a freebie that can be used with almost any Apple device, and could help bolster their soon-to-be burgeoning iCloud streaming service.

It's possible that Apple could lay an iPod, likely the old iPod Classic rather than the more popular iPod Touch, to rest at its upcoming September event.

But although iPod sales are shrinking, it's hardly an issue for Apple. The iPhone 4 sold 18.6 million units in the first quarter of 2011 alone. And according to a study from Resolve Market Research, between 80 and 90% of tablet-owning respondents had an iPad or iPad 2. But, some analysts think Apple missed out on an opportunity for more sales.


"We believe iOS devices would have been up ~20 percent (quarter over quarter) if iPhone 5 had shipped in June," Piper Jaffray analyst Gene Munster said today. In late June, Google's Andy Rubin tweeted that there are over half a million Android device activations happening daily, and yesterday, that number jumped up to 550,000 per day. Some of those extra purchases could have been iPhones, had an iPhone 5 been available.

Regardless, Apple still has a solid spot as one of the top three smartphone manufacturers in the United States. And as more and more people lay their MP3 players to rest, they'll be turning to smartphones to plug in for their mobile music fix.

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