Is the Apple iPod On Its Way Out?

No doubt about it, Apple just announced another stellar quarter. The company sold 9.25 million iPads in Q3, up 183 percent from the same quarter last year. It sold more than 20 million iPhones too, a 142 percent jump. And Apple's profit more than doubled to $7.31 billion.

So what's not to like? Well, iPod sales fell a whopping 20 percent to 7.54 million. Nobody's surprised that iPod sales are falling, as the standalone MP3 player is rapidly losing ground to smartphones that play tunes and do a zillion other things as well.

It's too bad that Apple didn't break out its third-quarter iPod sales by model. It's a safe bet that the iPod Classic, the venerable click-wheel model that's sooo 2007, took the biggest hit, followed perhaps by either the iPod shuffle or nano. The iPhone-like iPod touch, however, is probably selling well.

Of course, it's too early for Apple to kill off the iPod entirely. Seven-and-half million sales in one quarter is still impressive, even if recent trends suggest that the music player's best days are behind it.

It may be time, however, for Apple to prune the iPod tree. Two options:

Kill the iPod Classic: Sure, this old-school device has 160GB of storage and holds up to 40,000 songs. But other than DJs and music industry pros, who really needs to store that many tunes? Besides, with the arrival of cloud-based storage services, including Apple's own iCloud, the mega-capacity music player may soon lose its mainstream appeal.

Drop one of the tiny iPods: The distinction between the iPod nano and shuffle gets fuzzier every day.   The shuffle has a clip but no screen. It's handy for joggers, gym rats, skydivers, and other sports enthusiasts. The nano has a multi-touch screen--a really small one, in fact. Is the MP3 market big enough for both players? Only Apple knows for sure, but I suspect that one of these models is on the way out.

As for the iPod touch? It's a keeper. With its iPhone-like capabilities, this multi-talented media player is popular with the younger crowd. And more importantly for Apple, the iPod touch is a gateway drug to the iPhone.

Long term, the iPod's days are numbered. But don't write its obituary just yet.

Contact Jeff Bertolucci via Twitter (@jbertolucci) or at jbertolucci.blogspot.com.

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