It’s about time Apple (AAPL) came out with something new to lure the customers. The iPod, first of its kind, used to be every teenager’s fantasy. Come 2008, people over the world were taken by surprise. This time Apple had revolutionized the mobile phone market. They were out with iPhone- something that had the speed and accuracy of a PC (in fact much better) and would fit on one’s palms. The iPod was history. People over the years have moved away toward iOS, iPhones and iPads. Things seem so bad for iPods that the segment could not even generate $1 billion in revenue in the last holiday quarter. The revenues from the segment have dropped by 55% year over year and the units have sold by only 52%. The company keeps coming out with redesigns of iPods every second quarter. One thing that the company needs to understand is that it shouldn’t be wasting time on producing something that never generates more than $2 billion in revenue. At least, this has been the case of late. Wasting time on something as poor as iPod is nonsensical.
What the company must focus on instead are iPads and iPhones. The company already has released a 4 inch Retina screen. The new kid has been named iPad SuperMini. It uses the A6 chip (or even an A7 for 64bit compatibility) instead of the A5 and move to the 8 megapixel camera from the current 5. The price for the iPads also reduces largely. The A6 (or A7) SuperMini could keep current iPod Touch pricing, that is $229 for 16Gb, $299 for 32Gb and $399 for 64Gb and a new 128Gb version for $499 could largely replace the 160Gb capacity of the iPod Classic - as that would be twice its price, Apple should be able to sell the existing Classic stock at full price. This might help increase the unit sales. It won’t be long before people start discarding their current iPads and move away to the iPod Touch because it is effectively a 4 inch iPad, better in resolution.
What can be the other solution to get over the iPod disaster is to include similar features in products like iWatch and other wearables. An iOS iPod Shuffle could even be kept on as a low end, introductory product for an iWearables range. This would put them in a much better situation rather than having a separate iPod range. One thing’s for clear, people are not interested in iPods anymore. This can also help the company to mobilize the stagnated resources of the iPod market.
The company seriously needs to redesign their marketing strategy. What’s required is a new product in market rather than offering the old blend of iPods, iPads and iPhones. iPads have disappointed lately and the company needs to replace the current product with something much better. They can try including the features in iWatches they offer. The company has been on a decent run for a while and investment could be fruitful.