Strategic Focus: Apple Discontinuing Some iPod Models

With all of the hysteria surrounding the rumored announcement of a new iPhone model, quieter rumors swirling about a significant change in the iPod line have received less attention.

The venerable product reconfigured the music business and launched a new era in product design. But its contribution to Apple's sales and profits has continuously decreased.

One rumor is that the iPod will be dropped altogether. Other, more credible sources, claim that the Classic and Shuffle models will be discontinued. Either way, this marks another stage in the company's evolution as a strategic power. Great companies evolve and drop anything they produce that has been eclipsed. GE did it with light bulbs and appliances, Nokia did it with forest products. Kraft, Nestle and other food companies are constantly tweaking their portfolios. iTunes is the strategic asset. Its downloads are available on other, more profitable hardware.

What this suggests, in the post Steve Jobs era, is that the company is taking an unsentimental look at all of its offerings, determining which offer the greatest value to customers and focusing its resources on improving those or extending its franchise to new models. That is what Most Valuable companies do if they want to remain at that level. JL

Doug Gross reports at CNN:

The iPod classic, a venerable stalwart in the world of consumer technology, may be getting the axe along with its cousin, the iPod shuffle, according to a blog that focuses on Apple news.

Citing an unnamed source, The Unofficial Apple Weblog is reporting that, in addition to unveiling the iPhone 5 next week, Apple plans to discontinue the more dated versions of its music player in favor of sleeker models like the iPod Nano and iPod Touch.
The blog notes that Apple teased a "product transition" during its most recent earnings report.

Saying only that the source is not an analyst, TUAW says the rumor makes sense.

"With all the excitement around Amazon, the classic is a holdover from 10 years of iPod existence, bearing many similarities to the original iPod," wrote blog editor Victor Agreda, Jr. "The shuffle is basically the same form factor as the nano, minus a screen."

He writes that the blog had been "sitting on a tip" about the discontinuation and only wrote about it after speculation popped up on other sites.

A groundbreaking device in personal tech, credited with reinvigorating Apple a decade ago, the iPod line now accounts for just about 7 percent of Apple's overall revenues. The iPhone and iPad, which offer music and video streaming along with lots of other features, have in some way trumped the iPod's usefulness.

Last year, Apple made what then-CEO Steve Jobs called "the biggest change in the iPod lineup ever."

But amid big changes to the Touch, Nano and Shuffle, there was no mention at all of the classic iPod, leading many to speculate that the end may be near.