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Apple iPod Domination

The new Apple iPhone 4S was introduced by new CEO Tim Cook at last week's keynote event, which was overshadowed by who and what was not there -- Steve Jobs and an iPhone 5 (see video at Apple's site).

Cook still followed the typical Jobs keynote format, starting by highlighting Apple's progress across the board -- the retail stores and OS X Lion, and then iTunes, the iPhone, iPad, iPods, and iOS and App Store. He then highlighted the new features in iOS 5 (see my summary), and the new iCloud services (see summary).

Then came the new products: the iPods, and the big news on the iPhone 4S and the Siri intelligent assistant (see previous post).

Unlike last year, when the iPod line was significantly re-focused (see earlier post), this year's iPod announcements were rather low key, focusing on price reductions:

The iPod nano was updated a bit, although it's still the same small square with multi-touch screen for playing music and listening to FM radio. (The 16 GB model holds about 4000 songs.)

The new nano adds larger icons on the 1 1/2 inch screen, and more clock face designs (from analog to Mickey Mouse) for wearing as a wrist watch. It also steps up as a fitness device, tracking walking and running, and even providing motivational real-time voice feedback.

The nano price has dropped to $129 for 8 GB, and $149 for 16 GB (was $149 / $179), and it's still available in silver, graphite, blue, green, orange, pink, and (PRODUCT) RED.

The iPod touch was not updated, but also dropped in price, so now it starts just under the $200 level -- or $199 for 8 GB (was $229), and the same $299 for 32 GB, and $399 for 64 GB -- but now available in black and white.

Apple continues to position the touch not so much as a mini-iPad which runs the same apps, or as the world’s most popular music player, but also as the #1 portable game player. [The new iOS 5 update is available for not only the current iPod generation 4 (with cameras), but also the previous gen 3 product (with Wi-Fi).]

Unmentioned in the keynote, the iPod shuffle (with no display) continues to be available with 2 GB for $49, and the boring old iPod classic is still hanging around with 160 GB hard drive for $249 -- in case you need to carry a massive media collection.

Apple's lack of exciting news on iPods demonstrates not only the maturing of the market, but also the lack of serious competition -- although in the keynote, Cook did note that of the 45 million iPods sold in the last 12 months, almost half were first iPod for that customer -- so there's clearly some action still in this market.

Apple's dominance is demonstrated by a nice graphic of Apple U.S. Market Share in the Oct. 7 issue of the New York Times. All the Apple products have shown nice growth over the years (except the iPad dropping from 92% to "only" 76%). But the iPod line has been particularly spectacular, starting at around a 38% share after its introduction in 2005, growing to 50% in 2006, 60% in 2009, and now up to around 76%, with a total 315 million units sold.

This market domination is further assisted by the lock-in from the Apple infrastructure, including the iTunes store for music, videos, and books (with 16 billion downloads since the introduction in 2005), and the App Store (18 billion downloads since 2008).

And now iOS 5 strengthens your electronic connections with PC Free, so you can activate and update your device wirelessly, and with the free iCloud services to store and sync your media, apps, contacts, calendar, and documents all online -- plus iTunes Match to store your entire music collection virtually online, so you can access all your music from any device.

Yes, dedicated music players no longer spark great excitement, especially as their features are integrated into the iPad and iPhone. But they're still useful for dedicated listening, especially for travel and exercise, and still clearly a nice market for Apple.

See my Apple iDevices Gallery for more on the new iPhone and iPods, and a chronology of the Apple iStuff.

Find the Apple iPod touch on Amazon.com

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This entry posted on October 10, 2011.

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