The Death Of The IPod

Remember the day when all we media types carried those (now quaint) Personal Digital Assistants (PDAs) around with us?  There we were, efficiently organizing our lives, jotting down lists of action points or brilliant ideas to be acted on later, or -- more likely -- using them to play solitaire to fake our way through desperately dull meetings or conference presentations

Considering how quickly PDAs were embraced by the digerati, it was a bit of a surprise to notice one morning that they were suddenly going out of fashion after having come so recently on the scene.  Admittedly the less-than-stellar reliability and battery life could be a problem from time to time, but hey -- it was early days.

But alas, no matter how fond we may have been of our little electronic icon of techno-efficiency, for a great many people the PDA slipped beneath the oncoming tide of the new next, and  are now largely part of the old last.

Or are they?

Surely they are still with us.  In fact, still with us in greater numbers and in more splendor than ever before.

Whereas some may feel the good old PDA has been superseded by the smart phone with all its bells and whistles, on closer examination, it seems to me that quite the reverse is true.  The PDA woke up one morning and quietly began to devour the good old cell phone.

Just take a look at the ever increasing array of "phones" on offer at your local retailer.  Doesn't it strike you that a remarkable number of them look just like the PDA -- palm-sized and endowed with a nice chunky screen? And what about functionality?  How many of the functions of your Treo or BlackBerry originated on the cell phone?  Not as many as you will have found on your PDA. methinks.

Fair enough, the PDAs of old weren't video-enabled and many of them never made it to the point where they could offer a meaningful link to the Web (if any), so there is plenty of progress that has taken place since the two morphed into one and the "phone" became a subset of the PDA.  But if the PDA really had died, I personally wouldn't hold out much hope for video on the move.  The form factor would have been wrong (we're all familiar with the old refrains about cell phone screens being too small for video consumption -- which for many people and formats they are).  In other words, if the PDA form factor hadn't already existed, we'd have had to invent it as the current video capabilities started to emerge.

And this is why I'm skeptical about the future of the iPod.  I know this is a desperately unfashionable viewpoint, and I should stress that I don't see it going away altogether. There are circumstances where it is the perfect device for listening to music (not least when trying to escape the excruciating tedium of running on a treadmill).

But for video we have both the screen size issue and the need to first download the file from iTunes to your computer's hard drive and then to make the transfer onto the iPod itself.

And with the continued increase in the number of devices that can store video (including the iPhone), with improvements in technologies delivering video to mobile devices, the chances of the iPod retaining much share in the mobile video space seem slim indeed.  

Admittedly, the announcement last week of the iPod Touch makes it clear that Apple is not about to stand still -- and right now pretty much no one can match them for device-based inventiveness and design combined with savvy marketing.

Ultimately then, increased competition in the device market alone isn't likely to be a killer blow for the iPod or for Apple.  Perhaps more threatening however, is the fact that any other devices that offer a better video service will - by virtue of their capacity - also be able to offer a comparable content service if the companies behind them market that way.  Of course, their ability to do so will depend on the nature of any deals they can cut with content owners (unless the content owners themselves do it, a la Hulu).  

And this is where it could turn really nasty for Apple.  Just now it seems that there's not a whole lot of love lost between the world of the content producers and Apple (something about price per download) and the relationship between the two sides may be souring at a time when the technology (and a few examples to learn from -- including iTunes) might facilitate a real split that could genuinely hurt Apple and put the content crowd back in the driving seat.

But if download-to-own may be getting tougher in the future, there are rumblings that the rental business could be a source of growth for Apple.  According to an article in yesterday's Financial Times, Apple is talking to the movie studios about the rental-on-demand opportunity through iTunes.  

Whereas the studios have been reluctant to talk about downloads for purchase on the grounds that they may cannibalize DVD sales, if the rumors are true, they are more relaxed about rental downloads.  With the major studios having sold off their interests in Movielink to Blockbuster, linking up with iTunes to do essentially the same as Movielink offered -- only to a much larger user base than any of the competition -- makes an awful lot of sense.

So while serious competition for both iTunes and in the basic device market for the iPod could take the shine off Apple, the possibility of a video rental market aided by the iPod Touch could help out. What it would do for the download-to-own market is something we can only speculate on -- probably push the price up (at least in the short term).



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