Apple: iPod Growth Asymptotically Approaches Zero

The story behind the story at Apple is not over-conservative guidance — and so I’m not sure why people keep repeating that gotcha mantra about Steve Jobs guiding down every year at this time — it is the declining growth in Apple’s key product, the iPod. While the law of large numbers says that monster growth can’t continue forever, at least not in absolute numbers, it is something else altogether for year-over-year Christmas unit iPod growth to approach zero — which is what is happening right now:


[Huge props to SAI for the chart — and for some prescient lead-up analysis from Henry Blodget of the AAPL quarter. ]


  1. is the supply of apple fan bois being constrained by a new form of birth control practiced by yuppies on both coasts?

  2. So, that chart shows iPod sales without iPhones (I think). That seems like half the story. If you’re taking from one product by feeding another in your own product line, that’s not as bleak a picture at all.
    Agreed that iPods are getting towards tapped out. But bully on Apple for having the next thing already in the market.

  3. Many of us who own Apple are looking at Mac sales – the halo effect from those who go to the stores for iPods. There is plenty of room for market penetration and good margins.
    And of course the iPhone.
    An objective analysis would include all current products as well as expected and emerging products, as well as the iPod workhorse.

  4. Forget the iPhone, I think this graph does not present the whole picture even for iPods.
    What about revenues generated out of the iTunes ? With the entry product being out there on the Apple network(or should I say walled garden), the revenues out of iTunes sales would probably present a different picture

  5. Some good comments here. I think the Ipod was bound to flatten out at some point- cannot grow at 50% forever. Clearly though, Iphone is an opportunity.
    But I think the halo effect is most interesting to note. Apple has always had the “cool” product vote, but I sense the halo effect and the brand franchise has expanded on the Ipod-Iphone momentum.

  6. I don’t know why units are being emphasized over margins. Who do you think Apple (and media creators and third party accessory makers) makes more money from: a million people buying iPod Shuffles or 750,000 people buying iPod Touches? I’m sure when Microsoft announces how much Zune sales have grown, everyone will be comparing it to Apple even though their total sales are still a drop in the bucket, let alone what their profit margin must be.

  7. aapl is performing on all cylinders. not a thing wrong with the company. the only problem here is the WILD WILD optimism that WAS embedded in the share priced. who is to blame for that? part of it is incredible bias in favor of the company by the sexy gadget obssesed financial and tech media.

  8. Assuming these units are in global units shipped, I am very surprised the growth rate is 5%. They bring iTunes stores online in more and more countries all the time, which seems like it would drive iPod sales in those countries. Also, there’s no iTunes for China or India yet, is there? I wouldn’t look at this as a no-growth-prospect cash cow put out to pasture just yet…