iPod at 10: A game changer getting long in the tooth

As Apple's iPod turns 10 years old this weekend, the device that rocketed Apple into massive profits and popularity has taken a back seat to Apple's newer products.

Apple's original iPod in 2001.
Apple's original iPod in 2001. Apple

On October 23, 2001, Apple took a big step in its corporate renaissance with a little device that stored all of 1,000 songs, cost an eyebrow-raising $399, and had more than a few critics chuckling at Steve Jobs' expense.

Jobs even seemed to anticipate that skepticism when he introduced the first iPod at a private event in the company's Cupertino, Calif., headquarters. In classic form, he saved the big reveal until the very end of the presentation, pulling out the iPod like a magician showing off the correct card pulled out from a shuffled deck.

"Why music? Well, we love music, and it's always good to do something you love," Jobs said. "More importantly, music's a part of everyone's life. Everyone. Music's been around forever, it will always be around. This is not a speculative market. And because it's a part of everyone's life, it's a very large target market all around the world. It knows no boundaries."

He was right. Customers snapped up more than 125,000 iPods in the first two months it was on sale. Sales continued to grow, more than quintupling in some cases, peaking when Apple proceeded to run through four consecutive years of people buying more than 50 million iPods.

That same ecosystem was bolstered by the simultaneous growth of Apple's iTunes software, an integral part of the iPod sales machine and Apple's hardware and software combination. All told, Apple has now sold more than 320 million iPods since launching it a decade ago, as well as increasing its lineup to multiple form factors, colors and capacities.

Source: Apple quarterly earnings

The music-centric event would go on to become an annual tradition, marking a turning point for Apple. It was expanding beyond computers and computer accessories to something people could use when away from those devices, while luring them into Apple's ecosystem.

But it's no secret the bloom is off the rose with Apple's landmark music player. Despite selling a seemingly healthy 42.6 million units of the device in its most recent fiscal year, which wrapped up last month, iPod sales have been on the decline, due in no small part to cannibalization. Apple effectively built the entirety of why you'd ever want an iPod--and then some--into the iPhone, the same gadget that's now pulling in the bulk of Apple's business.

Apple has also shifted its development focus onto those newer devices, giving the iPod line only marginal improvements every few years. In fact, during the past several cycles, the company's seemed almost at a loss at what to do with some of its iPod models, choosing to shift colors and pricing, versus making the kind of dramatic overhauls it now saves for its other portables.

A brief history
When the iPod was introduced, it was like nothing the industry had ever seen. It was a cross between the early crop of diminutive flash-based MP3 players that sported a relatively small amount of on-board storage, and the much larger, hard drive-based players that had gigabytes of storage, but came in sizes that more closely resembled CD players. By comparison, the first iPod came in about the size of a deck of cards, while still managing to have a hard drive inside. It also had an unusual exterior of chrome and translucent white plastic, with what would become iconic white headphones bundled in.

The device was married to two pieces of Apple technology: one software and one hardware. On the software side, Apple made use of its burgeoning iTunes software, giving buyers a way to sync over music they had ripped to their computers. On the hardware side, there was FireWire, Apple's high-speed data plug, which gave Apple an edge on competitors with a single cable that could sync and charge the device at the same time. Of course now it's easy to look back at both things and think about it as obvious, but at the time it was unique and attractive.

Apple continued to improve the iPod, lowering prices, shrinking its size while increasing the built-in storage, adding compatibility (and later replacing Firewire) with USB 2.0, and extending battery life. That went on for another three years before Apple decided to fork the line, adding the iPod Mini. The Mini held less storage than the original iPod but came in at a dramatically smaller size, with multiple colors and a lower price than its older sibling. It was a success from the get go, quickly becoming Apple's best seller.

In 2005, Apple added to the iPod line once again with the Shuffle. Making use of flash memory for the first time in an iPod, the no-screen Shuffle became Apple's entry-level model, offering a design that could be worn around a listener's neck and that would double as a USB drive. Apple followed that up later in the same year by killing off the Mini with the iPod Nano, a tiny flash memory-based iPod with a color screen that made the Mini seem chubby by comparison.

Over the next two years, Apple hit repeat on its iPod playlist, refreshing units with new features and continuing to add to its iTunes software and iTunes Music Store. The biggest change to the line didn't come until the introduction of the iPhone, which was Apple's first touch-screen iPod. With the iPhone, the iPod software came in the form of an app that iPhone users could launch, something that would follow as a separate piece of hardware three months later with the introduction of the iPod Touch, a device that's essentially an iPhone without the phone components. Apple then overhauled its entire iPod line, touting the iPod Touch as the biggest and best iPod (just short of the iPhone, which could obviously do a bit more), relegating the old click wheel iPod to be called the "classic."

An uncertain future
Even with declining sales and relevance, Apple's shown few signs of abandoning the iPod, or reducing its line. In fact, Apple's never cut an iPod model since the product launched--at least not without replacing it with a newer design. One could argue that's what will likely happen to the Classic in place of the more popular Touch, but it hasn't yet.

But Apple's a company that famously kills off things in the name of progress. It did it with the floppy drive, and is in the process of that once again with optical drives and hard disk drives on the MacBook Air. One can look at the current iPod line over the past few years and see that what's exciting is everything at the very top, which once again is more like the iPhone.

Jobs talking iOS 3.1 features at a music event in 2009.
Jobs talking iOS 3.1 features at a music event in 2009. Stephen Shankland/CNET

Yet even with its less than historically impressive sales numbers, and a feature stall, the iPod continues to drive people into the company's product ecosystem. At Apple's iPhone 4S introduction earlier this month, CEO Tim Cook alluded to as much, saying that "nearly" half of new iPod sales were going to people buying their first iPod. A similar number that gets thrown around by the company is that about half of people buying a Mac these days are first timers as well.

No doubt there will be a day when the iPod as we know it will cease to exist. But even then we'll still be able to look back on it as the product that helped build the foundation for the devices we have now, and the ones we haven't seen yet--a value that's harder to quantify than sales numbers alone.

 

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