Before Christmas, a co-worker told me he had put iPod nano’s on layway for his two kids as their big Christmas gift. But as Christmas got closer he was talking to his older son (age 15) about iPods and his son said that he would rather have a Playstation Portable (PSP) because it plays music too but also plays movies and the best video games. Upon hearing this, his younger sister (about 10) said that was what she wanted too. So the layaway order for the iPods was cancelled and the kids got PSP’s.
I think that was a really big turning point. The iPod has gone from being so cool that you have to have it, to coming up short on features. Yes, the new ones play video that you download from iTunes, but how long will people be satisfied with something that only plays music and tiny videos?
The Palm went through this. For a while it was the hot thing and every business person needed one. They “couldn’t live” without their Palms. I still feel that way about mine and for a while Palm seemed unstoppable. But then Dell and HP took huge chunks of market share by selling more advanced (and more expensive) handheld devices that were almost like tiny laptops (with Microsoft Windows and Office even). Now some people have Blackberries, some have RAZR phones with cameras. Palm has some phones and has licensed its operating system to other phone makers, but a Palm isn’t a must-have. Having a simple, fairly inexpensive device, that only stores phone numbers and your calendar seems like a waste of pocket real estate.
Take a blackberry, RAZR, or even a Palm and add a tiny 20 GB hard drive and who needs an iPod anymore? Maybe you won’t even need the hard drive, maybe you can just get songs wirelessly from music services, satellite, or even your home computer. Apple is still the top of the heap, but I see them getting left behind. The iPod has been a very successful mp3 player, but I don’t know if people will settle for mp3 players for much longer. And Apple can’t change the iPod too much without it not really being an iPod anymore.