Pixel Envy

Written by Nick Heer.

“Time to Scrap the iPod”

An anonymous writer at the notoriously unreliable Seeking Alpha, “Options Calling”, is unimpressed with iPod sales. And who can blame them? Apple’s certainly selling fewer iPods than they were just a few years ago. But this article is so weak. Let’s start with the title:

Time to Scrap the iPod

Why’s that weak? Well…

The reason behind the fall of the Nano and Shuffle could be the release of the iWatch, which is expected to release in October this year.

Because of the iWatch, it’s time to scrap the iPod. Geddit?

Anyway, let’s get to some bar graphs:

In a recent report, Apple Inc. presented its second quarter earnings’ “unaudited summary data”, and the picture it presented wasn’t much like what people might have expected.

The iPod, for one, posted an extremely dismal 53% drop in sequential change in revenue, and a 54% drop in units sold. Apple enthusiasts would argue that the drop in sales from the first quarter onwards is characteristic of the company…

A 54% drop in unit sales is, indeed, surprising, if this were year-over-year. But this is sequential, and Apple’s first quarter is their holiday quarter. It’s not only “Apple enthusiasts” who would argue that a sequential drop in sales between Q1 and Q2 is characteristic — anyone who looks at the numbers would also make that argument.

The author then makes the argument that the iWatch could cannibalize iPod sales, which is actually not a bad line of thought if the rumours are correct. But they’re just that: rumours. So, to then demand that Tim Cook drop the iPod lineup is absurd. And, yet:

So why not scratch a device out altogether that has been reporting declining sales for five straight years? Why not invest in better projects that would ensure better returns to the company – and its shareholders – than the iPod? Apple Inc. CEO, Tim Cook definitely needs to do some brainstorming, and soon.

Why not? Because in fiscal year 2013, Apple still sold over 26 million of the things. It’s not nearly as big of a business as the iPhone or the iPad, but it’s still really big. They’re still building the iPod Classic, too, which is hilarious to me.

It’s clearly not Apple’s primary business any more; they don’t put iPod sales figures in their quarterly financial press releases. But if they’re going to drop models from the lineup, or even drop the iPod as a brand altogether, they’re going to do so when they’re poised for one of their own products to take over.

For an anonymous blogger to advocate otherwise based on rumours, and to suggest that Cook is not doing best for the company or shareholders, is irresponsible.