Time to Celebrate the iPod's Fifth Birthday

Oct. 23, 2006 — The big news on iPod's fifth birthday is, well, the iPod.

Buzz continues to surround Apple's slick line of hand-held media players as talk of the long-awaited iPhone — an iPod that also doubles as a cell phone — and a video iPod with a bigger screen and touch-screen controls persist.

With 70 percent of the market in Apple's hands and more than 65 million iPods in consumers' hands, there seems to be nothing even close to threatening the player's dominance — even with major players like Microsoft trying desperately to pump up the hype on its forthcoming player and download store, Zune.

"They [Apple] simply have a tremendous ability to refresh their product line and continue to win the hearts and minds of consumers," said Michael Gartenberg, vice president and research director for Jupiter Research.

"It's not going to be a simple thing for Microsoft to come in and challenge Apple in the short term," Gartenberg said.

Every time it seems as though Apple's great white hope might be unseated, the company reinvents it by adding new features like a color display, more storage space, or bright and expressive colors.

When the iPod was released in 2001, CEO Steve Jobs said that, "With iPod, listening to music will never be the same again."

Boy, he wasn't kidding.


It's Not Technology
"The reason the iPod is so successful is that the brilliance behind the technology is not in your face," said Adam Goins, a 25-year-old iPod owner living in New York. "The brilliance of the technology is that you don't think of it as technology."

Goins says the reason the iPod makes the competition appear invisible is that the company isn't selling a high-tech geek accessory, but an idea.

The TV and print commercials for the device barely show it in action.

Instead, they sell viewers an image: This product is fun, it's easy to use, and it's cool.

"When you see Microsoft coming out with a device, and they're taking it from a technological standpoint, to a certain extent that matters," he said. "But on the level of a consumer, you get the iPod because it's very stylish, because they've taken it to the level of being about fashion. The technology becomes almost irrelevant."

All that style comes with a big price tag, but as with any fashion accessory, Goins says that if you want to stay hip and on the edge of popular culture, you have to be willing to part with a few bucks.

"As anyone is well aware, the price means nothing when it comes to fashion," he said. "If they really want it, the cost doesn't matter."

While Goins may represent why the iPod has consumed 70 percent of the market and shows no signs of slowing, he may also be an example of why that market is limited to just 30 percent of Americans.

While Apple has done an admirable job of marketing the iPod to young, urban hipsters, the company has had a harder time broadening the market considering the cost of entry, despite a variety of iPods at varying prices.


iPod 101: The Perfect Digital Storm
Though many credit Apple's iPod and the iTunes download store for starting the whole digital-music craze, the real glory belongs to a music filing sharing program created in a dorm room at Northeastern University in 1999.

Created by Shawn Fanning, Napster was a software program that allowed people to view and download music files from other participants' computers via an Internet connection.

Though it's best known for kick-starting the debate about copyrighted music in the digital age, it also set up the playing field that allowed the iPod to rise to ubiquity.

"The question is: 'What company profited the most from Napster?' The answer is probably Apple," said Ross Rubin, director of industry analysis for NPD Group.

The popularity of Napster gave users a lot of music they didn't know how to get out of their computer except on CDs, which were limited in terms of how much they could hold.

When Apple came along with the iPod — far from the first player of its kind — the market was ripe for a product that was easy to use and made sense of the whole digital-music thing.

The iPod plugged right into a computer's USB port, and the software needed to make it run was relatively idiot-proof.

The introduction of the iTunes music store, where tens of thousands of songs were available for download for 99 cents a piece, completed the circle, as evidenced by the more than 1 billion downloads the service has sold.

With about 70 percent of Americans still undecided in the digital media player space, there's a lot of potential for a competitor to sneak in and take a bite out of Apple.

But if iPod can maintain its "cool factor" and the company can continue to make meaningful changes to the product line to keep it fresh and relevant, there's no telling how many birthday candles iPod could earn.--abc.com