Tuesday, October 24

Who Knew?

Who knew? Just a few weeks following the September 11 terrorist attacks a relatively small, struggling computer company held a press conference to announce a new product. At the time, the whole affair seemed more than a little insignificant. But now in hindsight, it is evident that the new product, a little music storage and playback device, would have a stunning impact. Indeed, the Apple iPod has become one of the most recognizable products in the world. It has transformed Apple’s business and its public image--but, perhaps even more significantly, it has transformed the computer industry, the music industry, and perhaps very soon, the television and movie industries as well. All this, from a device smaller than a cigarette package. Who knew?

Well, apparently, Steve Jobs knew.

Admittedly, the Apple CEO’s carefully choreographed pronouncements are more often than not accompanied by cynical quips and murmurings about a “Reality Distortion Field” that always seems to surround him. But in the case of the iPod, on that particular October day in 2001, Jobs couldn’t have been more right. When his stood before a handful of media reps that day, his company had just reported quarterly revenues of $1.45 billion, down 22 percent. Profits had been cut in half, and many were wondering if Apple would be able to survive the onslaught of low-cost PC competitors like Compaq, Dell, Micron, and Gateway.

Oh how the iPod changed all that. This past week Apple reported that it shipped 8.7 million iPods during its fourth fiscal quarter, which ended September 30. In fact, Apple's $1.6 billion from iPod sales in the quarter was more than it generated as an entire company back in October 2001. Those iPod sales were also 35 percent more than the same period last year—far more than what Wall Street’s cautious financial analysts had been expecting. The halo effect for Apple's Mac computers has been nothing less than astonishing, boosting sales in just the last quarter 72 percent (and, oh yeah, of those low cost PC competitors, only Dell still exists in any form even beginning to resemble its former self).

It's hard to overstate the impact of the iPod in just five years on the wider culture. It’s not just the likes of Bono and Madonna who sport those ubiquitous white earbuds these days. The Pope and the President both have iPods. Lance Armstrong trains with his. Condoleza Rice travels to the world’s hot spots with hers. Yo Yo Ma has one. So does Stephen Hawking. So does Billy Graham. So does Brad Pitt. So do I (in fact, I have two--one to run with and one for my home stereo system).

Surely, even the ever optimistic Jobs could not have forseen this.


gordan b said...

I don't see what's unique about an iPod. All it is is another name for MP3 player (well.. media player. it plays for than MP3 files), and those have been around for years.

-gordan b.

gileskirk said...

Gordon: Well, certainly there is something about the iPod. Despite the fact that a host of competitors have come and gone, the iPod has outsold all of them--combined. Is it the elegance of design? Is it the ease of use? Is it the flawless integration? Is it the iTunes support, the Nike+ seemless add-on, or the cottage industries that have sprung up to create peripherals? Or is it all these together? The one thing that is certain, the iPod proves that utility is not all that matters--sometimes, in fact, it is what matters least.

Christian said...

What is revolutionary now is the kind of media that is available in mp3 format. I am not a fan of the DRM in the iPod and iTunes but I love the floodgate that it has opened. I have never owned an iPod but because of the plowing that Apple has done with it, media will never be the same. I have listened to numerous lectures from history confrences, it is how I found George Grant (Thank you wordmp3), so George, when will you start a podcast? I love that you blog but you are a wonderful conversationalist.