October 7, 2008 9:02 PM PDT

iPod dying? It's already dead

Posted by Matt Rosoff

There has been much blogorrhea on Tuesday over Apple co-founder Steve Wozniak's offhand comment to the Telegraph that the iPod would go the way of the transistor radio and the Sony Walkman, becoming a cheap and eventually boring commodity product.

iPod? Isn't that the music application for the iPhone?

News flash: it's already there. Sure, Apple will still sell millions of units every quarter, and it might even continue to grow unit sales and revenue for a while. But it's clear from Apple's most recent announcements that the company no longer views the iPod as its main vehicle for innovation--new (old) form factors, colors, and one interesting update are the kind of incremental tweaks you make to a cash cow product line, not the groundbreaking innovations that move markets forward.

Apple passed its mantle of innovation to the first iPhone a year ago, and that's where the action's going to be, from now on--multifunction devices with interesting new interfaces (touch is just the beginning) that act more like tiny computers than single-purpose devices. iPod? That's just another application icon on the iPhone deck.

(And here's something you'll never hear in a presidential debate: I was wrong. Specifically, I was wrong when I suggested that consumers would continue to favor single-function devices and that the iPhone's bet on convergence would sink it. I underestimated the power of the touch screen and Apple's relentless focus on ease of use, which have made the iPhone the first ultraportable computer for mere mortals.)

I appreciate Microsoft's latest Zune innovations, but they needed to be in the product when it launched two years ago. MP3 players are becoming a commodity in which low price overrides new features--especially given how tight consumer spending is likely to be this holiday season. Microsoft isn't into commodities, unless it's got dominant market share, so look for the company to turn its attention to building a more competitive version of Windows Mobile. Zune will live on--as the music playback application for Microsoft's mobile phones.

Originally posted at Digital Noise: Music and Tech

Matt Rosoff is an analyst with Directions on Microsoft, where he covers Microsoft's consumer products and corporate news. He's written about the technology industry since 1995, and reviewed the first Rio MP3 player for CNET.com in 1998. He is a member of the CNET Blog Network. Disclosure.