IPod Lifecycle at the Time Thesis

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They are also increasingly differentiated by features, such as thinness and shakeability. While Apple engaged in both stretching and filling during the growth stage in order to build the market, they now appear more concerned with warding off competitors. The success of the iPod has not only driven revenues directly, but has also had the desired effect of improving computer sales. Mac laptop sales have increased 51% in 2007 and 38% in 2008; desktop sales increased 12% in 2007 and 37% in 2008.

At present, the iPod is unlikely to experience steep decline in the marketplace until it is eclipsed by new technology. The iPhone represents one such threat, but diffusion of that product will be at a slower pace than the iPod experienced, because of much more intense competition from cell phones and PDAs. However, iPods tend to last only a couple of years before consumers seek to upgrade to the latest iPod. Apple has continued to invest in R&D even for the core iPod, in order to keep the product relevant and drive these sales. The market may not grow, but Apple will continue to bring in repeat customers as long as they keep improving the product.

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Maturity in the market will likely reduce the average price of iPods and we will see other firms move into the market as Apple gradually loses its technological advantage. That Apple has tied the iPod in with its other products will help to combat this, however.

I feel that Apple managed the iPod extremely well. After a somewhat slow introduction, the product caught fire, at which time Apple made the right move by using a combination of stretching and filling to build the market. Now that they own the market, they are using filling to drive repeat customers and ward off competitors. Moreover, they have managed the iPod in such a way as to drive new business to their other product lines. I would have a difficult time recommending that Apple use a different approach to the life cycle management of the iPod, though from this point I think the next step is to make a radical change in the iPod's uses by integrating it with other products better, something we have already begun to see with the development of the iPhone.

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