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Apple’s Most Revolutionary Product Isn’t Going Away Anytime Soon

By Jamal Carnette, CFA - Jul 9, 2015 at 8:25AM

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If the rumors are correct, Apple oldest mobile device is getting a long-awaited refresh.

Apple's iPod may be getting a relaunch with new colors. Photo: Apple

It's safe to say that the 21st century has been good to Apple ( AAPL -0.61% ). The company is in the midst of a 14-year product super cycle in which each consecutive new product has sold 100 million units faster than the one before it.

Recently, the company's iPhone and iPad have gotten the majority of media attention: for different reasons, as the former is strengthening while the latter is struggling. Meanwhile, Apple Watch sales figures will be of intense interest in Apple's next quarterly earnings report.

Lost in the larger conversation is Apple's iPod. And that's unfortunate, as I think it was actually Apple's most revolutionary product, but understandable, as sales have fallen to the point where the product is no longer material to Apple's results. After years of reporting iPod results separately in its quarterly and annual earnings figures, Apple now reports iPod revenue under a catch-all "Other Products" category, lumped in with Beats Electronics and Apple TV sales.

Furthermore, Apple discontinued the older iPod Classic last year and the iPod product line hasn't had a significant refresh in three years. The totality of these actions have led to speculation as to whether Apple will eventually discontinue the iPod.

Last month, Apple added to that speculation when it pulled the iPod from the top menu of its home page and replaced it with Apple Music. But it appears that Apple will continue to offer the unit -- and it is even adding a new color scheme for potential buyers.

Apple is pivoting back to music
For those who have upgraded to the newest release of iTunes 12.2, you may have noticed Apple's version of an Easter Egg. It's a graphic with the three current versions of the iPod -- the iPod Touch, iPod Nano, and iPod Shuffle -- displayed with three colors that do not (currently) exist. And while this isn't firm evidence that the iPod is getting a refresh, astute observers (via Apple Insider) also noticed that the iPod's calendar read "Tuesday 14," presumably hinting at a July 14 release.

Assuming Apple does release a refreshed iPod with new colors, this would be indicative of a direct pivot back to music. Recently, fans were treated to a rebranded and relaunched iTunes experience with a new streaming-music offering and the introduction of Beats 1 Radio. The splashy reboot, plus a redesigned iPod lineup, could bolster Apple's performance in music delivery and storage: an area in which Cupertino has been struggling recently, after changing the entire music-delivery business a little more than a decade ago.

All that said, the iPod line isn't important to the company's financial performance and probably never will be again -- hence the removal of the iPod as an independent product category in Apple's financial statements and from its home page -- although new colors and upgrades certainly wouldn't hurt sales. Investors should keep looking toward Apple's iPhone (the iPod with a phone attached) for growth.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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