The good thing about the Apple (AAPL) iPod is that the company has sold 160 million of them. That is the bad thing about the device as well. Apple ships about 10 million units a quarter, and that figure is no longer going up very fast.
It does not seem right to say that too many people have iPods but it is starting to look that way. Apple has to come up with a new reason for consumers to walk into store with iPods on their minds. Mac and iPhone sales have been good, but the little MP3 player is what makes Jobs run.
Apple is supposed to say something important about the iPod at a September 9th conference. That is a rumor, but it might be true.
It has already been pointed out that Apple only has a few options to jump-start iPod sales. What has not been said, at least not often, is that none of them is likely to work.
Apple could cut prices on the machine. That would bring in more buyers, but it would saw off margins and that is not going to do much for Apple’s share price. It also turns the iPod into a bit of a commodity which is something that Apple has tried to avoid with all of its products. Apple hardware is special. Products from companies like Dell (DELL) and HP (HPQ) are junk.
Apple could try to add new features to the iPod. Since it already does everything a multimedia player is meant to do, it is difficult to imagine what those additions might be. Speculation is that Apple will try to turn the device into the "brain" for home entertainment systems. That would put it into competition with a couple of dozen other companies from cable firms to Amazon (AMZN).
Apple shareholders need to get used to the fact that the iPod will be nothing more than a steady financial producer in the future. The Mac and iPhone have to step up. Apple’s challenge is that its "PC" and smartphone have much more competition than the iPod ever had.
Apple’s best days may be in the rear view mirror.
Douglas A. McIntyre
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