Wednesday, September 21, 2011

Cannibalize yourself

Over the past four quarters, unit sales (of iPods) are down 12.5% from the prior year, while revenue has fallen by 6.2%. Sales of the IPod are in decline.
Or are they?

Have you met my little friends the iPod Touch, the iPhone and even the iPad? Are they all fully functioning iPods? Yes they are. And are their sales numbers? Yes they are.

Apple doesn't report iPod Touch sales but Apple has indicated that iPod Touches now account for more than half of all iPod sales. The iPhone and the iPad sold 20.3 and 9.2 million units respectively in the last quarter alone. If you count all of these devices as iPods - and you should - then iPod sales have not decreased - they've increased immeasurably in the past five years.

What's the lesson here? The iPod was the device that first saved Apple from obscurity then launched Apple to fame. Yet in ten short years the iPod went from being Apple's hottest product to being an afterthought.

Cannibalize yourself. Don't wait for your competition to do it. Apple's philosophy is that if anyone is going to steal market share from their products then that someone is going to be Apple. That should be your philosophy too.

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