Apple and iPod: Dead Again.

With the imminent announcement of Apple’s new product next week, there’re several iPod doom stories.

David Galbraith wonders if the “Is the iPod past it?“

His main rationale is that there are UI restrictions going from a music player to a video player. He identifies that the PSP and Sidekick as the trend-setter devices for the mobile video genre and wants iPods to mimic the Sidekick. I am not convinced of that is a good idea, since Blackberries and Sidekicks were designed for different purposes and do not translate to video players, but then I am not a interface expert. Here’s the general theme though:

Now if Apple did a Sidekick style handheld then the combination of the right style device and elegant design would be perfect – but my guess is that they are probably too complacent because of the iPod’s success.

Hmm. Too complacent?

Doom and complacency are echoed in this Observer piece by David Smith (with overloaded inneundo and minimal data to support his central thesis that Apple and/or the iPod are doomed).

Apple has added ever more extras to its digital music-player in a bid to stem falling sales.

OKly Dokly. Features like what? Even one example would do.

Sales are declining at an unprecedented rate.

Could it be because they haven’t updated the iPod in over a year? Also, here’s a better comment on this in Slashdot:

Of course. Because the iPod only sold 1/3 more in both the first and second quarters than last year. But wait – it’s down on last year’s Christmas rush sales!!!! It’s in decline!! The death of the iPod is here!!!!!!! Oh wait. WTF??

WTF is right!

and this comment from Slashdot too:

Q4 03: 336,000
Q1 04: 733,000 (holiday quarter)
Q2 04: 807,000
Q3 04: 860,000
Q4 04: 2,016,000
Q1 05: 4,580,000 (holiday quarter)
Q2 05: 5,311,000
Q3 05: 6,155,000
Q4 05: 6,451,000
Q1 06: 14,043,000 (holiday quarter)
Q2 06: 8,526,000
Q3 06: 8,111,000

We have yet to see a year-over-year decline in sales. It is of course to be expected, that pundits seeking attention will continue to troll with “the sky is falling” articles, just like we’ll keep hearing about how every also-ran is an “iPod killer”

Yikes. Here’s the next point:

Industry-watchers warn that the iPod could soon be regarded by teenage cynics as their ‘parents’ player’ because a mass-market product rarely equates with edgy fashionability.

Assuming that is true, what is a worthy alternative? Oh, wait, the cellphone theory:

Tomi Ahonen, a technology brand expert and author, said: ‘For the first time the iPod has had two consecutive falls after 17 quarters of growth. If I were the manager, I would be wanting my people to explain what is going on. The iPod is wilting away before our eyes.’

He cited new mobile phones with improved MP3 players as the cause of the iPod’s dwindling appeal. ‘In 2005 all the big phone manufacturers released phones that play music. Phones are outselling dedicated MP3 players by six to one. Apple had the market for MP3, but they lost it.

Never mind this report:

A survey of 3,000 consumers by Entertainment Media Research, in association with Olswang, the law firm, puts a cloud over the music industry’s hopes that music for mobile phones will be an important source of growth.

The survey found that just 11 per cent of consumers were already paying for music downloads on their mobile

or this:

market watcher Canalys, which today said the MP3 player makers are, for now, safe from mobile phone manufacturing rivals. It doesn’t need to worry about portable media players, either, if forecasts from market researcher In-Stat prove correct.

The researcher said it believes MP3 player sales will continue to grow despite support for music in mobile phones. “A mobile phone-based player doesn’t offer much to a high-volume music consumer. The convenience of having to carry one device less will usually be outweighed by the design compromises that result”, said Canalys analyst Rachel Lashford. “And a heavy user isn’t going to pay a premium to download each track over the air to a phone when there are cheaper service alternatives that offer a more sophisticated browsing experience, interface and file management.

That complacency question raises its ugly head again:

James Beechinor-Collins, editor-in-chief of T3 consumer gadgets magazine, added: ‘It’s cool across the board: everyone from my seven-year-old niece to my 60-year-old uncle has one. But as the leader Apple needs to keep innovating, not resting on its laurels. We haven’t seen a new product for a year, so Tuesday’s announcement had better be bloody good.

Are there any signs that they are resting on their laurels? No. But, why waste valuable time on constructive analysis when there is a certain meme that can be used to gain online hits. In any case, the signs are “clear” that Apple and iPod are dead.

The company is facing growing competition on every front. Last week Amazon launched a digital TV and film download service in the US, and the supermarket giant Wal-Mart is in talks with Hollywood studios about a similar website. Later this year a new online music store, SpiralFrog, will undercut iTunes by offering a huge catalogue of music for free while relying on advertising for its income. MySpace, the immensely popular social networking site, also poses a threat.

How does the competition measure up so far? Not very well: Amazon reviews suck. SpiralFrog – tbd but DRM and account restrictions seem less than attractive. MySpace – tbd.

Furthermore, according to Smith:

Three out of every four MP3 players sold are iPods, but the device could be challenged later this year by Zune, the contender from Microsoft, whose billionaire founder Bill Gates is not used to losing.

But why would Microsoft enter a market that Ahonen says is dying? Cellphones are killing iPod sales. Does billionaire founder Bill Gates know that only a fool would compete for a piece of a dying market? BTW, Zune prospects seem somewhat less than daunting.

So conclusion? Apple is dead but the Dvorak strategy is alive and well.

[Update] Paul Kedrosky picks up the Observer article. He highlights a piece that I overlooked. David Smith’s comparison of previous technologies, including one with Sony:

Sony Walkman
Launched: 1979

What is it? Portable music cassette player with headphones. Sales fell in the Nineties when portable CD and minidisc players arrived; iPod nailed the coffin shut in 2001. Sony launched an MP3 version last year.

Sales: 60 million sold by 1992, 4 million in the UK.

It is interesting that Mr. Smith chooses to carefully highlight the 60 million number (which plays well psychologically with his storline). Needless to say, if he had stated the that Sony sold over 360 million walkmans, his comparison would have fallen flat. From the SF Chron:

Sony said it has sold more than 330 million Walkmans worldwide, nearly 150 million of them in the United States

So has the iPod lost its groove? It’s too early to tell but that won’t stop the Dvorak strategy (especially because it never fails to work!)