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The rise and fall of ipod?

  This transformed the way we listen to music, and it helped turn Apple into one of the most valuable companies in the world. Apple has sold more than 400 million iPods since launching them in 2001, and over 35 billion songs.

But sales have been in decline for over a decade. How did the iPod go from being one of the most popular gadgets to being basically nonexistent?

In 1999, the US music industry had its biggest year yet. Around this time, two things were exploding and growing. Over 40% of households had a computer, and the Internet was rapidly gaining users. A new market for digital media was emerging. CD's made-up over 80% of US music revenue at the time. You could listen on a big stereo, or portable CD player or Rip an entire album to your computer. But CD players and early portable media players had a lot of issues. They were big and clunky, would often skip during playback, and neither held many songs. Apple saw this as an opportunity. It considered the competition totally inadequate, and it wanted to create something that was smaller and more powerful. But Apple didn't know exactly what this device was.

Until its former head of Hardware, John Rubenstein met with Toshiba at a Macworld Expo in Tokyo. Rubenstein was shown a 1.8 inch hard drive, which was incredibly small for the time. This new hard drive combined storage and portability, exactly what Apple was looking for. Apple's new media player was now possible.

The first iPod was announced on October 23rd, 2001 by Mac. 

It had a 5 GB capacity, cost $399 and promised to hold 1000 songs in your pocket. In 2020 That might sound a bit underwhelming compared to a 2019 iPod touch. It had 84% less storage and adjusted for inflation costs almost $400.00 more and it was super chunky, but compared to other products at the time it looked and functioned.


 Better it held a lot more songs and the now iconic scroll wheel made it easy to navigate a big music library.


 Before the iPod, there really wasn't an easy way to take a lot of music with you on the go. It really set the stage for Apple to be the dominant player when it comes to mobile devices. But not everyone saw the iPod as the success it would become. Initial reviews were critical due to its high price and limited functionality. The New York Times quoted 1 analyst who said, it's a nice feature for Macintosh users, but to the rest of the Windows world, it doesn't make any difference. It seems like an expensive product that only targeted a relatively small portion of computer users. What really made the iPod so successful and it really boils down to one thing was that it was very easy to use. The iPod did one thing and it didn't really well. Back in 2001 it was actually.  You know, pretty sleek and portable. The iPod was almost like a status symbol. You wanted to show off your music collection. But Apple wasn't relying on just the iPod. Nine months earlier, Apple released iTunes, a digital music player for Mac. The ecosystem was a little bit more fragmented when you get into other companies and the way they do things. They all had proprietary software that just didn't work as well as iTunes and wasn't as easy to use. And the iPods FireWire connector transferred songs faster than USB. You could put a CD's worth of songs onto your iPod in 10 seconds. In April 2003, Apple launched the iTunes Music Store, which sold hundreds of thousands of songs for $0.99 each. They store sold over 1,000,000 songs in its first week, but iTunes was only available on the Mac, which had less than 3% of the global computer market share. So six months later, Apple surprised everyone and released iTunes for Windows. 


 ITunes for Windows is probably the best Windows app ever written. Now, anyone could use an iPod. In its first eight months, iTunes sold 25 million songs, and iPod sales exploded year after year.


 The iPod became kind of like the face of you know. Portable MP3 players. Then it made it really difficult for anyone else to compete. And it also convinced people you know if you like iTunes and you like your iPod so much, then maybe you would like using a Mac too. But it wasn't just consumers, the music industry loved the iPod too. In the early 2000s, piracy was growing fast.


 Napster had gained 80 million users in just three years. The music industry saw file sharing companies like Napster as its biggest threat. It is clear then that if music is free for downloading, the music industry is not viable. iTunes bridged the gap between the music industry and consumers by providing an easy and affordable way to buy music online. We're going to fight illegal downloading by competing with it.


 In 2004, the President of the Recording Industry Association of America told Newsweek the iPod and iTunes Store are a shining light at a very bleak time in the industry. Over the next couple of years, Apple upgraded the iPod and released more models at various price points like the Mini Shuffle and Nano, which brought larger storage, better portability, and new features like video playback. For the people who had massive music libraries, there was like the Big Classic one and then, if you really just wanted to take a few songs with you, you had the little shuffle that you can clip onto. They really tried to think about every type of person who was buying an iPod and what they would want from it.



    In 2007, Apple released the iPod Touch, a touch screen iPod that had apps, games and an Internet browser. Sales peaked in 2008 with 54.8 million units sold. In an interview with Wired in 2004 will Smith called the iPod the gadget of the century. I think anybody who grew up in the early 2000s remembers those iPod ads it also marked the Shift from being a computer company to a personal electronics company without the iPod. You could really argue that. Like, who knows if there would be an iPhone today? But the devices success wouldn't last much longer. Months before the iPod touch launched, Apple released another product. You might have heard of an iPod. The phone. And an Internet communicator. This is 1 device and we are calling it. IPhone. So if you had all three of those things in one, you probably didn't need to have a separate device just to listen to music anymore. Adding insult to injury, Apple called the music app on the original iPhone iPod. The rise of the iPhone and the fall of the iPod have a direct relationship. iPod sales began to decline in 2008 while the iphone's growth was massive. At the time, Apple was still releasing new models of the iPod, but it would soon abandon its own product in 2009, Den Chief Financial Officer Peter Oppenheimer said. We expect our traditional MP3 players to decline overtime as we cannibalize ourselves with the iPod touch and iPhone. In 2011, iPhone sales overtook the iPod. Three years later, Apple discontinued the iPod classic. At the time, the iPod was less than 2% of apples revenue. It was clear that the ipod's days were numbered. On an earnings call in 2014, Tim Cook even said all of us have known for some time that iPod is a declining business. Finally, in 2017, Apple discontinued the Nano and Shuffle. These were the last of Apple's devices that didn't connect to the Internet, which meant they couldn't use the services that Apple was focusing on. Like the App Store, Apple Music and Apple TV plus. But the death of the iPod also closes a chapter on Gadget history. Single purpose devices like the iPod Classic feel antiquated next to smartphones and tablets that are essentially portable computers. Unlike the Apple Watch, which acts as a companion to your smartphone, the iPod was just redundant. Even though it defined the product category, it couldn't save itself from its own company. But it was also hurt by a larger music industry trend. As streaming services like Pandora and Spotify grew, people started buying music less. Even Apple is replacing iTunes with its streaming service, Apple Music. In fact, streaming is now the largest source of US music. Industry revenue. But the iPod isn't completely dead yet. Apple refreshed its iPod touch in 2019 with a faster processor and more storage options. So the iPod isn't totally irrelevant, it can certainly feel that way. A new iPod touch kind of just gives Apple another device that people can access their services on. An iPod still have a few uses. They're good devices for kids going to the gym or for people who still like owning music. But in 2020 when our devices. And do everything and go everywhere. It seems unlikely that a single purpose gadget could find mass success again.


 

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