Smart Buying
In the iPod Zone
Your guide to the core features of Apple's hottest player.
By Sean O'Neill
From Kiplinger's Personal Finance magazine, January 2006
What's next
Apple has a lock on the market today. IPods account for 72% of MP3-player sales, says the NPD Group. But the iPod itself may turn out to be a fad. No matter how trendy Apple's famous white earbuds are now, in several years the cool kids on your block could be listening to their music on another manufacturer's MP3 player, says Paul Saffo, a research director at the Institute for the Future. (Given the iPod's status as fashion icon, Saffo notes, "Paris is no longer the center of fashion. Now it's Silicon Valley.")
But fad or no, you shouldn't hesitate to buy an iPod -- or any other MP3 player -- because you're afraid your music won't work on tomorrow's players. Succeeding generations of devices will be able to play multiple formats, says Jon Erensen, an analyst with Gartner Group.
They will also be cheaper, smaller and smarter. For example, the latest iPod (a 30-GB version) is 45% smaller than the original 2001 model -- at a 25% lower price. And its hard-drive memory (which has rotating platters along with other moving parts) holds six times more data.
In the past year, Apple introduced two devices, the nano and the shuffle, that hold less data but are also less expensive. These devices use flash memory (with a memory chip and no moving parts), which will soon be able to store more data in a smaller space and at a comparable cost to hard-drive memory.
Apple's rivals are racing to develop an MP3 player that will let you load music from an online store without hooking up to a PC. Expect such devices to hit the market within the year, says IDC analyst Susan Kevorkian. Apple may follow suit if the devices win fans.
The first wireless music store that allows you to download music directly to your cell phone was recently launched by Sprint Nextel. About 250,000 songs are available. Each download comes in two versions, one that will play through your cell phone's limited speakers and another on your PC. (You download the PC version from a personal account at musicstore.sprint.com.) For $2.50 a song, you get both the phone and PC versions. Verizon and Cingular are expected to offer a similar service shortly.
It's too soon to know how popular it'll be to search an online music store using a phone's Lilliputian screen, as opposed to using a computer monitor. Moreover, few consumers seem eager to download music directly to their cell phones, and most appear content to keep their MP3 players and cell phones separate.
In the evolution of MP3 players, we're still in the Cambrian era: a time when digital music devices appear in many forms and compete for dominance in the marketplace. Although the iPod may be the most highly evolved today, we would not be surprised if a sixth lobe is now being perfected in an inventor's lab.