The iPod Turns Five: Mature, Or Youthful Toy?

Five years ago the Mac community was shocked when Apple introduced the iPod.

The iPod was an expensive, brick-like toy; a CD player without CDs, a me-too anomaly with a future.

Who wanted to walk around with a set of pearl white ear plugs telling the world you lived in a music shell?

Apparently, nearly everyone. iPod ear plugs, five years later, are ubiquitious.

What was the digital music world like before the iPod? In a word, “Napster.”

Back in the day, people just stole their music from online via Napster and other free music services.

The introduction of Apple’s iPod changed the course of portable music players, and music buying habits.

Today, Apple’s iTunes Store is in the Top 5 of all music retailers in the US. Digital music sales exceed 10-percent of the total market.

Roughly 40-percent of Apple’s resurging revenue comes from the iPod line; even more for profits.

The iPod introduced what is known as the iPod “halo effect.” Millions of Windows users love their iPods so much, they also buy Macs.

Even better is the effect the iPod generation of sales has had on Apple’s stock price.

Since 2001 when the first iPods hit the streets, Apple’s stock has gone from approximately $9 per share to $79 per share (post splits).

In just the fiscal year of 2006, Apple sold nearly 40-million iPods worldwide and maintains an 80-percent market share for both portable players and online music sales.

The original iPod, when compared to the svelt models of today, was bulky, clumsy, yet elegant. Only the elegance has remained.

Since the 2001 models, Apple has thinned down, slimmed down, all iPod models, reduced the price to spur the market and block out competitors.

There’s even talk of monopoly problems with Apple’s iPod, iTunes, and iTunes Store holding so much of the online music market.

It was less than two years ago when Apple shocked everyone, Mac and Windows users alike, by ditching the hot selling iPod mini in favor of the nano.

Apple’s famous Click Wheel navigation device is the ultimate in simplicity, not duplicated by competitors (except those who create a round pad with click points).

The iPod generation has spawned a major generation competitors, each with their many attempts at iPod Killer Creation.

All have failed as the iPod’s market share and popularity, in sales, profits, and unit sales, have only increased.

Other portable music players claim longer battery life, lower prices, more features, even different colors, but none has captured the fancy of users like the iPod.

The iPod has even attracted Microsoft’s attention; again, and again. First with PlaysForSure for Apple hardward competitors, soon with Zune, a re-branded Toshiba Gigabeat portable player just for Microsoft.

How many iPods have you owned through the years? I bought an original in 2001, a five gigabyte wonder that still works, but is on the second battery.

I’ve also had a mini, and an iPod photo, and a new generation iPod with video.

What’s next? What can Apple do for an encore in 2007? Smaller size, larger screen, larger hard disk, wireless?

We know where iPod has been, so where is it going?