September 17, 2006

Has Apple lost its iPod mojo

Apple made "It's Showtime" announcements this last week, and for the first time since the introduction of the iPod, I'm not running to the store to buy something. I've owned every generation of iPod created, and there are three in my house today. Each new iPod brought some new feature, form factor, or capacity improvement that I simply had to part with my money for.

It didn't happen this time, and I'm surprised. I recently settled in with a 4GB Black Nano, and have been extremely happy with it. My two daughters have Shuffles, but I'll upgrade them to Nanos for Christmas (shush, it's still a secret!) Since I've been encoding my audio collection in ALAC, no iPod can hold my entire collection. This means my old strategy of buying the latest iPod for the capacity improvement is now bonked.

Apple's only new form factor was the Shuffle, but I've tried the Shuffle, and can't live without a screen. Life isn't random. So form factor didn't drive a new purchase for me, and I'm not sure the new Shuffle will drive many additional sales for Apple. The sub $100 DAP market segment is quite saturated, features are roughly at parity between vendors (hard to differentiate with a limited BOM), and people just want those players for simple music playback. You buy a Shuffle to live in the cult of Apple, IMHO, not because it is an amazing piece of technology or a unique solution to customers' problems.

Capacity improvement? Not a big driver. Form factor? Apple didn't deliver here. Features? Nope. Didn't get that either. The movie thing is interesting, but have you ever watched long form factor video on a DAP. Trust me, I have, and it is not fun. The iPod form factor was not built for long form video. It is too hard to hold an iPod within the proper focal range for your eyes for extended periods. Games? Interesting, but if Apple wants to compete with Nintendo DS or Sony's PSP on the game front, they'll need a new form factor. Games are a secondary feature for Apple.

Where was the big new thing? Could Apple be slipping in the portable music space? Where is the subscription service? Where are the wireless headphones that finally get rid of the tangling web of cables that surround my iPod? Where is the ability to share songs between iPod users? Where is the ability to ability to sync with iTunes without the dock? Where is the integrated dock on a Mac that sits next to my TV and lets me use a Mac as a Media Center (or was that iTV?). Where is the music recommendation engine that drives new music sales by highlighting new music based on what I listen to in iTunes. Where is Karaoke or the integrated lyrics? Hi-def audio? Where is inductive charging? Where is a new controller or iPod user experience that is finally optimized for long list navigation? Where was variable speed playback for music, or more importantly, podcasts? Video blog support? Integrated DVD compression?

I'm shocked to see Apple cede the high ground on new features to Microsoft of all people. While Apple screwed Zune's launch by lowering their price points across the board (severely impacting Zune profitability at launch), they let Microsoft take the high ground on music sharing. And Zune's solution is not ideal! Wait till some other companies make their announcements in this space.

I realize that Apple doesn't ship innovation until it is bulletproof and elegant. This statement doesn't explain the lack of innovation coming from Cupertino. After the Nano, Apple's improvements have all been incremental.

The DAP market is maturing. If people wanted a player, they have one. Companies will have to now convince customers that a new DAP has something so compelling that it is worth upgrading. What is Apple's play here? Or will they wait and let wear and tear drive customers to the store for replacement iPods? I think not ;-)

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