It's official. Apple has sold its 100 millionth iPod and has secured its title as the fastest-selling music player in the short-lived digital era. But can the company sell 100 million more before new technology disrupts the market?
Apple sold its first iPod five and a half years ago. Since November 2001, the computer maker has unveiled more than 10 new iPod models, including five generations of the original iPod, and two generations each of the iPod mini, nano, and shuffle. Coupled with the iTunes Music Store, Apple has cornered the digital music market.
Apple's formal announcement about hitting the 100-million mark included Grammy Award-winning artists Mary J. Blige and John Mayer offering personal endorsements for the player. Blige said, "It's hard to remember what I did before the iPod." And Mayer suggested that if it weren't for the iPod, "the digital music age would have been defined by files and folders instead of songs and albums."
Apple CEO Steve Jobs called the 100-million mark a "historic milestone" and thanked music lovers for making iPod a success. "iPod has helped millions of people around the world rekindle their passion for music, and we're thrilled to be a part of that," Jobs said in a statement.
The iPod Ecosystem
The iPod has sparked an ecosystem of over 4,000 accessories made specifically for the player, including cases, arm straps, and speaker systems. And more than 70 percent of 2007 model U.S. automobiles currently offer iPod connectivity.
Then there's iTunes with its mega collection of digital media. Those who own iPods can make selections among over five million songs, 350 television shows, and over 400 movies. The iTunes Store has sold over 2.5 billion songs, 50 million TV shows, and over 1.3 million movies to date. In addition, Apple has shown industry leadership through its recent deal with EMI to peddle its library of music free of copy protection.
These reasons, along with user-friendliness, an attractive design, and solid branding efforts, contribute to the iPod's market leadership, according to Steve Baker, an analyst at NPD Group. "The iPod is not the best priced product. It's not the most feature-rich product. It's not the smallest or the coolest. But Apple consistently comes out with a product that meets the needs of what most people want."
Do People Want More?
Apple's competitors are still trying to offer something more. The Zune, for example, features wireless connectivity and an FM radio. And its latest competitor, a tag team effort by Yahoo, SanDisk, and tech startup Zing, offers a Wi-Fi-enabled player and ecosystem that lets users buy music directly from the new Sansa Connect.
A recent survey from Jacobs Media suggested there might be room for competitors that can offer what the iPod does not. Some 43 percent of iPod owners surveyed said they want an FM radio integrated into the next version of the iPod. Another 18 percent said they want more storage capacity. A larger screen was also on the wish list. Apple relies on the iPod Radio Remote, an external accessory that sells for $50, to satisfy its customer's demands for the radio feature, but has not indicated it would offer an integrated radio or wireless connectivity.
Surveys aside, Apple's market dominance isn't likely to change on the basis of hardware features like FM radio and Wi-Fi, Baker said. "A change in the way consumers use media might cause people to think about the iPod differently," he explained. "The biggest future danger to the iPod is how fast video becomes important and if cell phones become the vehicle for it. That could put the iPod at risk."