iPod touch viewed as in final stage of product life cycle By Neil Hughes With the iPad mini now joining the iPhone and iPad 2 in Apple’s sub-$400 product lineup, the company is expected to reduce its investment in the iPod touch going forward. Ming-Chi Kuo of KGI Securities, an analyst with a strong track record in relation to Apple’s future plans, said in a research note this week that the iPod touch “has entered the final stage of its product life cycle. The latest version, released this month for a starting price of $299, has a larger 4-inch display, but sales are still expected to be significantly affected by the iPhone, which can be had for free with a new two-year contract, and the new $329 iPad mini. Sales growth of the iPod touch is therefore expected to be limited, even in spite of the major redesign issued by Apple. As a result, Kuo believes that Apple will not invest significantly in developing future models. Apple announced at its iPad mini unveiling on Tuesday that its new iPod touch and iPod nano collectively sold 3 million units in their first month of availability.
The iPod has become a diminishing aspect of Apple’s overall business, as the iPhone and iPad have taken center stage. Even if Apple does focus less on the iPod touch, it’s not likely that the company would discontinue the product in the near future. Apple routinely boasts during its quarterly earnings reports that the iPod touch accounts for more than half of all iPods the company sells. And the $249 hard-drive-based iPod classic, which offers 160 gigabytes of storage, continues to live on in Apple’s product lineup, despite the fact that it has not been updated in years.
In April of this year, Kuo predicted that Apple would discontinue its 17-inch MacBook Pro. Only months later, in June, that prediction proved accurate, as the 17-inch MacBook Pro was removed from Apple’s notebook lineup. and then slow down. As the company will attempt to prolong the maturity phase as long as possible, it will likely introduce alterations and innovations to the product to keep customers interested and stay a step ahead of the competition. Advances in technology and changes in consumer taste and demand may also add to the slowing down of sales growth of the product during this phase.
Prices tend to drop in this phase due to lower costs as well as a high level of competition, and so industrial profits will fall as well. market saturation A situation in which a product has become distributed within a market to the fullest possible extent, leaving demand for the product at a minimum. The actual level of saturation can depend on consumer purchasing power, competition, prices, and technology. maturity The stage in the product life cycle where sales growth ultimately peaks, then slows as the product reaches widespread acceptance, and competition is fierce.
Examples Many popular and known products, such as the iPod and the iPhone, are in the maturity phase at the moment. Apple managed to extend the maturity phase of the iPod by introducing the iPod touch, which introduced a touch screen and new features. It also introduced new functionalities such as the use of apps, making it much more versatile and useful than the older iPods; one could argue that the iPod touch should be considered an entirely new product rather than an innovation on earlier iPod models. Rate This Content: Good? Needs Improvement? Bad Want help studying Maturity? Get the Flashcards Create a Study Guide Take a Quiz The stages of the product life cycle are: •Introduction •Growth •Maturity •Decline Product Lifecycle Management Stage 3: Maturity The maturity stage follows the growth stage in the product’s life cycle (see Figure 0). During this stage, sales growth has started to slow down, and the product has already reached widespread acceptance in the market, in relative terms. Ultimately, during this stage, sales will peak.
The company will want to prolong this phase so as to avoid decline, and this desire leads to new innovation and features in order to continue to compete with the competition which, by now, has become very established, advanced and fierce. Competitors’ products will begin to cut deeply into the company’s market position and market share. However, despite this, sales continue to grow in the early part of the maturity phase. But, these sales will peak and ultimately decline, as the graph shows.
Demand for the product ultimately decreases due to competition and market saturation, as well as new technologies and changes in consumer tastes. Actions the company takes may include: •Improving specific features in order to resell the product (for instance, in the case of a car, the manufacturer may include alloy wheels, new colors, sport or hybrid versions, or other changes in order to keep sales going); •Lowering prices in order to fight off competition; •Intensifying distribution and promotional efforts; Differentiation efforts, in the hope that new customers will start to buy the product. So, during the maturity stage, the following occurs: •Costs are lowered as a result of production volumes increasing and experience curve effects •Sales volume peaks and market saturation is reached •Increase in numbers of competitors entering the market •Prices tend to drop due to the proliferation of competing products •Brand differentiation and feature diversification is emphasized to maintain or increase market share •Industrial profits go down
For the past years we have seen how APPLE Computers Inc. has not only introduced the IPod into the market for music players, but created the new must have pop icon. The following is a brief analysis of the product life cycle of iPods. IPods were first introduced to in 2001 and has since grown into a recognized cultural symbol. Designed and marketed by Apple Computer, iPod is a brand of digital audio/video players that stand apart from the rest due to their user friendly interface and sleek design. Customers can carry their entire music collection and more in their pockets.
Although Apple Computer already had a huge following of loyal customers, the iPod has created a new generation of Apple fanatics that simply cannot get enough of the iPod and all of the iPod attachments that have since developed. The iPod has grown faster than any other music player in consumer electronics history and accounts for half of the company’s revenue from the sales of hardware and content; it has also generated a “halo effect” increase in sales of Mac desktops and laptops. Currently the iPod finds itself in the ending of the growth stage of its product life cycle.
It has shown a steady growth rate as demonstrated in the sales reported by Apple Computers for the past 15 quarters. The most recent quarters have shown a significant increase in the sales volume of iPods, a good indicator that the iPod market is expanding. It appears as though there is now definitely a public awareness of the Apple iPod worldwide. The iPod has contributed significantly to Apple? s growth the past several years. However, iPod unit growth has been slowing, as nothing can grow forever. Apple has made some modifications to its iPod line which should help boost iPod… Read Full Essay Now