The Making of Apple's iPod
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Case Details:
Case Code : OPER064
Case Length : 19 Pages
Period : 2001-07
Organization : Apple Inc.
Pub Date : 2007
Teaching Note :Not Available
Countries : US
Industry : Digital Music Player
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"It's cool across the board: everyone from my
seven-year-old niece to my 60-year-old uncle has one. But as the leader, Apple
needs to keep innovating, not resting on its laurels. We haven't seen a new
product for a year."1
- James Beechinor-Collins, Editor-in-Chief, T3 Consumer
Gadgets Magazine, in September 2006.
"The iPod is far and away the most popular tech gadget
with our panelists. However, for the first time we are hearing negative feedback
about the iPod from some panelists. Panelists cite that the batteries are not
replaceable, so when they die the entire player must be replaced. We have heard
from some conspiracy theorists that the batteries are made to die soon after the
warranty ends."2
- Clara Avruch, Spokeswoman, Zandl Group3,
in September 2006.
Introduction
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On April 09, 2007, US based Apple Inc. (Apple) sold its one-hundred millionth
iPod. With this, iPod emerged as the best selling product of all time in the
digital music player industry (Refer Exhibit I for the growth of sales of iPod
since its introduction). iPod was a highly successful product.
For the financial year ending September 2006, Apple reported revenues of US$
19.32 billion and a net income of US $2 billion. The revenues from iPod for the
same period were US$ 7.7 billion i.e. about 40% of the company's total revenues
(Refer Exhibit II A and II B for detailed financials of Apple).
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After the launch of iPod, Apple's stock price increased more than 700 percent
between October 2001 and August 2007 (Refer Exhibit III for Apple's share
price movements between 2003 and 2007). iPod was first introduced as a music
player. iPod wasn't the first MP3 player to come into the market but it was
the first one to engage the customer.
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It overturned the weaknesses of earlier MP3 players such as bulky
appearance, limited storage, etc. and was able to forge ahead. The product
was developed in a year and was launched on October 23, 2001.
iPod users could download songs and videos from iTunes Store, Apple's online
music store that was launched on April 29, 2003. As the market for the
product increased, Apple kept adding many new features. In March 2002, Apple
added limited PDA4 like functionality,
where by text files could be displayed, while contacts and schedules could
be viewed and synchronized using a computer terminal. |
The Making of Apple's iPod
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