Say Goodbye to the iPod

The iPod you know won't be around much longer.

Crazy, you say? It wouldn't be the first time I've been proven wrong, but two interesting studies have me thinking that Apple (Nasdaq: AAPL  ) is preparing a graceful exit for its older-school music players:

  • Of  2,176 e-reader owners and potential buyers surveyed by comScore, 15% planned to buy an iPad in the next three months, versus 14% for Amazon.com's (Nasdaq: AMZN  ) Kindle. By comparison, 10% of respondents cited Barnes & Noble's (NYSE: BKS  ) Nook and 9% Sony's (NYSE: SNE  ) Reader.
  • Flurry Analytics estimates that devices using the iPhone OS -- i.e., the iPhone and iPod Touch -- accounted for 19% of portable game revenue in 2009, up from 5% the year prior. Both Sony's PlayStation Portable and Nintendo's DS lost share over the same period, Flurry estimates.

The obvious conclusion from these reports is that Apple's planned transition from computer company to mobile-device company is well underway.

But I also get the sense that consumers have shifted expectations for what mobile devices can (and should) do, and they're increasingly confident Apple can deliver. More confident, it seems, than they are of heavyweights Microsoft (Nasdaq: MSFT  ) , Google (Nasdaq: GOOG  ) , and Nokia (NYSE: NOK  ) filling the gap.

But to do that, Apple will need to concentrate resources on multipurpose, multitouch, interactive devices that cover music, video, telephony, and more -- the sort that don't rhyme with "shmy-pod." Consequently, investors should expect Apple to spend more on research and development and marketing over the next few years. In tech, turf wars get expensive, and Apple needs to win this one.

Now it's your turn to weigh in. Will the iPod meet its end in 2010, or shortly thereafter? Please vote in the poll below. You can also add to the discussion by leaving a comment.

Apple and Amazon are Motley Fool Stock Advisor selections. Google is a Motley Fool Rule Breakers recommendation. Microsoft and Nokia are Motley Fool Inside Value picks. Motley Fool Options has recommended a diagonal call position on Microsoft. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He had stock and options positions in Apple and a stock position in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is, dare I say it, en fuego.


Read/Post Comments (28) | Recommend This Article (20)

Comments from our Foolish Readers

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  • Report this Comment On March 24, 2010, at 3:26 PM, marv08 wrote:

    This is a bit confusing... You see the iPod on the way out, but then you cite the success of the iPod touch?!

    The iPod Nano is still the hottest selling MP3-player in the world (and size is a main selling point for e.g. outdoor activities and the gym) and the touch is gaining faster than the iPhone does. So, nope, iPod stays.

    The amount of people willing to pay for data plan subscriptions for their children is limited. Non-converged devices still cater to a need. Also: the iPod touch is Apple's guarantee that no other modern smartphone platform can achieve a similar market share and developer momentum (RIM is stone-age software, Android has too many versions and alternative GUIs, Nokia has a different OS on every phone).

  • Report this Comment On March 24, 2010, at 3:35 PM, pfkraushaar wrote:

    Sorry but I don't think you're even close. The iPod form may change but I'm not sure I want an all in one device in the gym for example. Sure, an all in one would be really handy but not for all things. Evolve yes, but go away.. no.

  • Report this Comment On March 24, 2010, at 3:36 PM, mgm5685 wrote:

    For me at least, I don't want all my functions to be in one device. I don't like single points of failure, or to put it less generally, a singular battery. I will never use a phone/laptop/reader until the battery life of the device isnt an issue to multi-task. I get much more life out of my cell phone and laptop because I use an iPod for my music, which is often on for hours and hours.

  • Report this Comment On March 24, 2010, at 4:15 PM, ChandraC wrote:

    Foolish speculation, appropriately enough. iPod is rising....again!

  • Report this Comment On March 24, 2010, at 4:35 PM, TMFMileHigh wrote:

    Hello marv08,

    >>This is a bit confusing... You see the iPod on the way out, but then you cite the success of the iPod touch?!

    My apologies. I'm referring to earlier editions of the iPod, such as the Classic, nano, and Shuffle. None of those is multitouch or multipurpose, unlike the touch.

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On March 24, 2010, at 4:43 PM, kedo76 wrote:

    They will always need the smaller iPods for the people who don't want an iPhone or the larger iPod touch. Gym rats, runners, or travelers who just want a small player, etc., will go ape if they couldn't get a smaller player and Apple wouldn't lose this crowd.

  • Report this Comment On March 24, 2010, at 5:10 PM, gaucho420 wrote:

    I have no plans for an Iphone or an Ipad...yet I use my Ipod everyday. If they do leave it behind, I'll buy it from someone else. The need to upgrade to the other APPL devices is limited, for me at least.

  • Report this Comment On March 24, 2010, at 5:28 PM, TokyoHaze wrote:

    Definitely the older Classic will be gone. It's a dinosaur next to the Nano and Touch. But those two will definitely endure. The Touch is great for my morning commute - I catch up on the latest investment news downloaded from iTunes (I live the US new so get the US news in the morning) and play games for an hour each way. Then it's my music player while at the office. The Nano also rocks because of its very small size. Perfect for running, the beach or anywhere else you don't want to carry bulk. Now I'm thinking about buying the Nano 5G because of the video camera (it will be my 3rd Nano!).

  • Report this Comment On March 24, 2010, at 6:07 PM, grfg8r wrote:

    Do a P.Lynch dempgraphic survey in person....GO TO A GYM! FOOLISH Fool!

  • Report this Comment On March 24, 2010, at 6:13 PM, Borbality wrote:

    You can't underestimate why the iPod was so popular in the first place.

    People have dozens of gigs worth of music, regardless of how they acquired it. This is totally capitalizing on the thing that has nearly destroyed the record industry. And they can sell for $200 a pop!

    This might not be the new core market Apple is targeting, but I think it's significant enough to keep the Classic models around a while. At least I hope it is, or I'll be replacing mine with something else pretty soon.

    I just see the Nano and Touch as a bunch of extras I don't want to bother with or pay for, and with less storage.

  • Report this Comment On March 24, 2010, at 6:48 PM, ejclason2 wrote:

    I hope the Classic (hard-drive based) survives at least until you can get upwards of 100G of flash at a reasonable price.

  • Report this Comment On March 24, 2010, at 7:06 PM, BearishKW wrote:

    cool story, hansel

  • Report this Comment On March 24, 2010, at 7:13 PM, mikenpdx wrote:

    ipods aren't going anywhere. i'll buy that we may see less innovation in the ipod space as they focus on newer products like ipod touch and the ipad and whatever else they're working on but ipods are here to stay. i see no reason to discontinue them altogether.

  • Report this Comment On March 25, 2010, at 1:03 AM, beetlebug62 wrote:

    Everyone's been telling me the iPad is no big deal, since it's JUST a BIG iPOD TOUCH!

  • Report this Comment On March 25, 2010, at 8:30 AM, akeagle52 wrote:

    My vote is no, and here some simple reasons why.

    1. Small is better.

    2. The iPOD is very portable, user friendly and well priced.

    It is logical to say that there maybe several generations of the iPOD, hopefully a better and better product as we go along.

    I am not saying the iPAD will not be successful in it's own right, but the first thing I thought when it was introduce was, "Where will I put it and how will I carry it?" It looks like I will have to have a carrying case or backpack to put it in. It doesn't look like I could carry it on my belt or in my pocket. I would have to carry it with a strap over my shoulder or in a brief case. It looks like a modified laptop. I am really not that excited about the iPAD. The iPOD is perfect for my needs and my medium size laptop serves me very well.

  • Report this Comment On March 25, 2010, at 10:50 AM, mountain8 wrote:

    Invest in male purses. Women are right, one needs a suitcase to carry all these gadgets.

    Vote no to incumbants

  • Report this Comment On March 25, 2010, at 11:58 AM, besomiculo wrote:

    The Ipod is the most over-rated product on the market today. At least untill the Ipad comes out. I feel sorry for everybody who continues to waste their money on apple products when there are better and more affordable products on the market. Also, with computers everywhere in today's world, how many do you need to have at once? Doesn't one do the trick anymore?

    I find it funny how for years everybody felt bad for apple for not being able to compete with Microsoft yet today, apple has become what Microsoft used to be before the judge divided the company. Apple is turning into a monopoly yet everyone is turning and looking the other way for whatever lame reasons. Apple should be in front of a judge as well and they should be broken up so their compition has a chance just like Microsoft had to do.

    Lastly, Steve Jobbs is such a genious that he was voted out of running his own company in the early 80's. That states more to me than anything apple can produce today.

  • Report this Comment On March 25, 2010, at 12:41 PM, bluepennyinvest wrote:

    One day, we also say goodbye to the iphone!

    http://top-penny-stocks.blogspot.com/2010/03/which-stocks-sh...

  • Report this Comment On March 25, 2010, at 4:34 PM, baldheadeddork wrote:

    I don't think Apple is going to drop the iPod just because it's such a terrific gateway drug, err, I mean entry-level device, to get kids into the habit of using Apple hardware. It's not much of a stretch for a middle class parent to buy a <$200 MP3 player for a kid who isn't old enough yet to have a phone, and Apple can use future iPhone development to keep the iPod lines fresh at a low price.

    But this is also one big difference I between the success of the iPod and what Apple fanbois are predicting for the iPad. Five bills or more for an iPad is going to greatly reduce the number of kids toting these around, and selling any electronic gizmo to adults is a crap shoot at best.

  • Report this Comment On March 25, 2010, at 7:39 PM, uberzephyr wrote:

    Add my voice to the camp that uses an iPod daily for music, podcasts, and audio books, but still own a "dumb" cell phone to (gasp) make only phone calls. I would be paying a delta of upwards of $600 a year extra if all I wanted to do was use my iPod features on a forced move to a smart phone - and the 3 other people in my family with iPods would be in the same boat.

    I don't think Apple is about to shoot itself in the foot by discontinuing a device that does everything I want from it for a ONE TIME purchase price. Apple STILL sells 50+ million of these devices a year; I don't think there are 50 million people that want to be forced onto a dataplan with its associated high cost.

    When cheap dataplans are rolled into existing cellphone pricing structures, then it will make perfect sense - not that I believe that will ever happen. :)

  • Report this Comment On March 25, 2010, at 9:30 PM, AcheronRecords wrote:

    I find it absurd that anyone would think that the iPod is on its way out. The iPod touch is a genius extension of the iPod line. Since the touch runs on the same platform as the iPhone it is just a segue for people to buy an iPhone. I also think that Apple could add a 3G touch to the mix with a month to month data plan for surfing the web, such as the upcoming iPad.

    We may see the phasing out of iPod nanos, shuffles, and classics and a move to reducing the price of the touch to make it the iPod solution for all users. Though I would think that the nano would stick around for a while too.

  • Report this Comment On March 26, 2010, at 9:34 AM, edesman wrote:

    There has long been a market for portable music devices - think back to the Sony Walkman. If you consider the iPod to be a better product catering to the same market niche, you come to the conclusion that some product will always fill this need. If Apple chooses to exit this market, that is their choice. However, it seems that this niche of portable music for the gym, the beach, commuting on the train, etc... is well entrenched in our culture and will remain.

  • Report this Comment On March 26, 2010, at 1:17 PM, lostmechanic wrote:

    The problem is nothing in apple line, except the Ipod has the large storage capacity. Apple would have to install a harddrive in the Iphone, Itouch and the Ipad, SS drives don't have the capacity at the right cost point. Next the Ipad is locked to ATT and if your are a moble user ATT dosen't have the coverage, I would rather use a un smart phone and not have the dropped calls or flat out no service.

  • Report this Comment On March 26, 2010, at 1:55 PM, WAugust wrote:

    Ditto most all here.

    The only reason they might end iPod would be if they simply couldn't support all else they want to do, but not because there isn't demand for iPod functionality.

    And even if there weren't true, as good as battery life has become for portable devices, it's still not good enough to support phone, data, 3G soon to be 4G, WiFi connectivity, game playing, photo browsing, video watching, music listening, as even average users would like to do in one device in one day.

    The everything-in-one vs. dedicated device debate has been in existence as long as there have been consumer electronics and it's not about to end now.

    Bill Matthies

    http://businesswisdom101.blogspot.com/

  • Report this Comment On March 26, 2010, at 3:28 PM, TomHandy wrote:

    The days of the current iPod Classic are almost certainly numbered. The main thing keeping it around really is the fact that it can offered in much higher capacity than flash-memory based models. Apple couldn't offer a device like the 160GB capacity of the iPod Classic at only $250, given the costs of 128GB or 256GB flash memory. But again, pricing of flash memory continues to fall, so this will eventually no longer be an issue.

    Once it is, the iPod Touch would seem to be destined to stand alone as the main "full sized iPod".

    Even when that does happen though, I don't think the iPod Shuffle or iPod Nano will disappear. They both serve purposes that an iPod Touch or iPhone can't replicate, and their form factors give them appeal that the iPod Classic doesn't have.

  • Report this Comment On March 26, 2010, at 8:24 PM, jonesericr wrote:

    ok I believe the iPod will die but I don't think it will be cut lose, especially since they just updated the slim model. Not everyone wants or needs an iPhone or iPad. The cost of the iPhone is prohibitive for most folks once you add on the data plan, which in most cases you can't opt out of in the US.

    I use my iPhone in the gym for musing and track my running and work out; however, in the car I use my iPod which has podcast's, like Motley fool, see how I worked that into the topic?

    Sounds weird but it works for me.

    No I think as long as there is a cost to the iPhone those in the lower annual income bracket will still want an MP3 player that just plays music, and podcasts.

    ej

  • Report this Comment On March 26, 2010, at 8:27 PM, rcschein wrote:

    They can have my I-Pod Touch when they pry it from my crippled arthritic thumbs !!!

  • Report this Comment On March 28, 2010, at 8:18 PM, rlcato wrote:

    @ besomiculo:

    1. Do you carry your laptop to the gym or jogging? That would be a work-out.

    2. Apple is a monopoly to itself. If you don't like Apple products, what's stopping you from going someplace else?

    3. I don't understand that last comment that happened some 20 years ago. Look where Steve Jobs is now?

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