iPod - Apple's Best Innovation

iPod - Apple's Best Innovation

Apple is the World's Number One Innovative Company, two years in a row according to BusinessWeek's 2006 list of the world's 25 most innovative companies. BusinessWeek proclaims "their creativity goes beyond products to rewiring themselves." BusinessWeek ranks the innovative companies based on the responses received from over 1,000 global executives of the largest global corporations; survey questions include innovation metrics on process, product and business model innovations.

According to BusinessWeek, innovation today is “much more than new products.” Innovation is also “reinventing business processes and building entirely new markets that meet untapped customer needs.” The ubiquity of the Internet and globalization of the business expand generation of new ideas. Innovation is then “selecting and executing the right ideas and bringing them to market in record time.”

iPod driving Apple to Number One Innovative Company

iPod, powered by Apple, introduced in 2001 and masterminded by Steve Jobs, combines outstanding design, easy-to-use interface, superb performance, and an experience like no other. Apple assumed the world’s number one innovative company position and held it again in 2006 in large part due to the exponential growth of iPod – aptly called the iPod phenomenon. Just ask the tens of millions of fans walking, driving, jogging, exercising, chatting, playing, humming, relaxing, singing, rocking, screaming, and above all enjoying their daily iPod experience. Imagine if they were to miss their iPod for a day, or even for a few hours. iPod is oxygen – pure and simple – the source of life for these millions of fans. Not to mention iPod has become associated with personal status and symbol that speaks of cool, hip, polished, and different. What began as a new product quickly became a revolution. iPod is by far the best commercial innovation the world has seen in the last few years, and perhaps is the best innovation from Apple dating back through its storied history of innovation firsts. Apple one-upped the iPod design innovation by creating new innovations in business model with the launch of iTunes online service enabled by strategic partnerships with the Music, TV and Movie industry.

A Glorious History of Innovations

Apple has created great innovations beginning with the first Apple computer in 1976, Graphical User Interface (GUI) along with the popular Macintosh introduced in 1984, the reliable PowerBook introduced in 1991, the PDA named Newton that created a new industry of handhelds in 1993, the new millennium revolution beginning with the iMac in 1998, the new iBook hot on the heels of the iMac in 1999, the iPod that put an oomph in the MP3 players and essentially changed music as we know it in 2001, iTunes software and Music store service that changed the Music industry business model and made it easy for fans to listen and buy music piecemealed in 2003, iPod mini, iPod (U2 Special Edition) and iPod photo in 2004, iPod shuffle, iPod nano, iPod with Video and Mac Mini in 2005, the new iMac with Intel core Duo processors and the new MacBook with Intel processors in 2006.

Five years of iPod Innovations

2006 marks five years of iPod innovations. Apple's Hardware engineering chief Jon Rubinstein assembled a team of engineers to design and build the first iPod in less than a year, and it was unveiled by CEO Steve Jobs on October 23, 2001 as a Mac-compatible product with a 5GB hard drive that put "1,000 songs in your pocket." Since then, Apple has introduced fourteen different models of iPods in various colors, displaying photos, downloading and playing videos, branded and signed by U2, with numerous forms and shapes, different capacities for holding songs, pictures and videos, with connectors, next generation models with better wheels, and more. For instance, the new iPod video introduced in 2005 was the first iPod that could download and playback full-motion video with a larger color screen and better display resolution – an innovative package under $300 for the base model. Or the innovation in the wheel that is akin to the driving wheel on a car – from an original mechanical scroll wheel to the current touch-sensitive click wheel. According to PC Magazine, “In the years since (2001), the iPod's market share has grown tremendously, iPods have shrunk in size, Apple's iTunes Music Store has taken the lion's share of legal digital music downloads, and the iPod accessory market has exploded and taken on a life of its own. All this has made the iPod as synonymous with "MP3 player" as Kleenex is with facial tissues.”

The love for iPod

Why do people love iPod perhaps more than their spouse, boyfriend, girlfriend or children? It has to do with the simple yet elegant design that makes it extremely easy-to-use (Toyota’s Innovation Factory), exceptional sound, video and imagery, and the amazing experience. The flexibility provided by the iTunes software and service that allows you to try and download any music and video with the click of a button from any computer or the Internet to your iPod. And all the available accessories from wireless headsets, remote controls, beautiful skins, acoustic speakers, to connectors that can literally take your iPod music and videos anywhere – inside the room, in the car, in the office, on the plane, even while taking shower. iPod fans can’t live without their iPods literally. And the search is still on for a music fan that has switched from an iPod to another MP3 player. And there is that small sharing thing: hard-core iPod fans don’t like to share their iPods with others. BYOiPod. Bring your own iPod.

iPod’s Topline

In the latest quarter ending September 2006, Apple sold 8.7 million new iPods, generating $1.5 Billion in sales, a third of Apple’s total quarterly sales. By the end of 2006, there will be over 67 million iPods in the world; Apple is poised to eclipse the 100 million iPods mark in 2007. iPod has revived Apple from the depths in 2001 when annual sales had plummeted to $5.36 Billion and Apple was losing money. Apple’s shares were under $10. Compare this to 2005, when Apple had sales of $13.9 Billion, and profits of over $1 Billion. Apple’s shares have climbed sixteen folds. The Apple machine is kicking into high gear, in large part due to iPod Innovation Revolution. iPod’s halo effect is even evident in the latest quarter when Apple sold more Macs than it has ever sold before: 1.61 million.

The next generation iPods

What innovations can be expected from iPod? Can Apple create jazzier, easier, feature-rich iPods?

How about iPods that beam songs and videos to each other, to a computer or even to a TV? Or iPods that deliver Presentations and Live Videos in team meetings. iPods with GPS Navigation system. iPods that combine as cell phones. iPods that can receive satellite radios. What innovations will Apple bring out next? Steve Jobs indicated in the latest quarterly earnings press release that 2007 will be an exciting year full of great new products. The world will be watching.