iPod Marketing Strategy

Everybody knows how successful the iPod has been in the last 4 years, and how it turned the fortunes of Apple.

150 million iPods have been sold worldwide until July 2008.

In March 2003 the Apple share value was $7, in July 2008 the Apple share value is $180. In the last 5 years the Apple share value increased a spectacular 2500%. And so did the Apple stock market capitalization.

Apple stock market capitalization was $7 billion in 2003,
it is $160 billion in July 2008.

By comparison in July 2008 Microsoft stock market capitalization is $240 billion, Citicorp market cap is $90 billion, General Electric market cap is $270 billion, Exxon stock market capitalization is $450 billion.
While Goldman Sachs stock market capitalization is $68 billion, Merrill Lynch market cap is $30 billion.

Apple revenues in 2003 were $6 billion, $30 billion in the 12 months ending in April 2008.


There is no doubt that the iPod has been the main driver in the Apple huge success in the last 5 years.

Few people however are aware - and few market analysts too - that for the first 3 years the iPod was an absolute flop. The iPod was originally launched in october 2001, and between 2001 and 2004 iPod sales were between 100-200 thousand units per quarter, very far from today's 10-20 million units per quarter, and the iPod sales were not even covering the product research & development costs.
Then, in June-Aug 2004 something happened, and iPod sales began to grow strongly, quarter after quarter. Today, we all know where the iPod stands, and what a remarkable success it is.

The iPod made the fortune of Apple, and it stands out as the major turning point in the company growth.

Few people know - and few market analysts too - that the iPod + iTunes business idea was not conceived inside Apple, but was proposed to Apple by an outside source, a music lover and Engineer named Tony Fadell, who was later hired by Apple. Fadell had approached other companies before Apple, including Microsoft, and Microsoft had turned away Fadell and discarded the project, as "uninteresting" ...

Microsoft executives turned down Fadell and the iPod + iTunes business idea saying: "This will not make any money".

Smart guys at Microsoft, indeed.

At Apple things for Fadell went differently.
He was listened to in the meeting. Two weeks later Steve Jobs called back Fadell, he said to him: "Ok, I put you in charge of the development of this products and of the business concept, I give you a team of 30 brilliant guys, designers, programmers and hardware engineers".

The iPod was developed by Tony Fadell and his team in just 12 months.

The name iPod was proposed by Vinnie Chieco, a copywriter who was called by Apple to figure out how to introduce the new player to the public. After Chieco saw a prototype, he thought of the movie "2001: A Space Odyssey" and the phrase "Open the pod bay door, Hal!".

Even though the iPod + iTunes concept did not originated inside Apple, the merit of Steve Jobs and of the Apple Executives was in the ability to listen, catch on the business idea, build a team around Tony Fadell, make a smart development process, and finally coming out with an excellent product, beautifully styled by Jonathan Ive.

And the merit of Steve Jobs and Apple was also in tirelessly development and improving the product, year after year, adding more functions - color display, photo viewing capability in october 2004, video playing capability in october 2005, improving battery life, improving the user interface, slimming down the player size, increasing the storage capabilities, introducing new models as the iPod Mini, cheaper and smaller in size and in storage capabilities, the iPod Nano having flash memory storage instead of hard disk.
Apple also kept improving the iTunes counterpart, and made numerous deals with reluctant record companies.

Apple finally introduced in September 2007 the iPod Touch, utilizing the revolutionary touch interface of the iPhone.

Apple iPod Construction and Outsourcing


It should be noted that, since the second generation of iPods in 2002, the iPods were made compatible not only with the Mac operating systems but with Microsoft Windows operating systems as well.

We should ask ourselves (and to Steve Jobs): how many iPods would have been sold if the iPods had been compatible only with Mac operating systems?

Think Steve, think ...


It shouldn't be forgotten that the iPod development has given Apple the technology capabilities and inspiration for the development of their next big thing: the iPhone.

Apple iPhone Marketing Strategy


the Apple iPod marks another outstanding result in marketing:
the annihilation of competitors.
See the analysis on The Apple iPod and the annihilation of competitors


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