iPod accessory manufacturers are scrambling to get a share of the iPod after market following the announcement that more than 100 millionth iPod’s have been sold in 5 years. This makes it the fastest selling music player in history.
According to various research Companies and the Consumer Electronics Association the iPod accessory market is also booming with growth in excess of 65% tipped this year. Last year Apple has canned its controversial “Made for Apple” iPod accessories licensing program, replacing it with a flat fee program that is easier for Apple to manage.
The initial licensing program was based on Apple taking a percentage of revenue from all products that connected to an Apple 17pin iPod connector.
Originally Apple proposed a fee of 1.5% but as the popularity of the iPod increased and sales moved into the tens of millions Apple told organizations like Bose that they had to pay up to 10% of revue back to Apple for being an official partner of the “Made for Apple” program.
Instead, the program has been replaced with a flat US$4.00 per unit fee.
Apple who at the time refused to comment on the fee is now reaping millions from the program as most leading Hi Fi Companies are now producing docking stations or integrating iPod connect technology into their products. Also contributing to Apple license fees are home automation Companies who manufacture iPod connected automation systems.
The flat fee move favours the manufacturers as well as Bose who late last year was angry with Apple over the move to increase licence fees.
The recent announcement by Apple shows that consumers have embraced the iPod, which went on sale in November 2001, far more quickly than they did Sony Corp.’s Walkman, the pioneering cassette player and headphones introduced in 1979 that changed how people listened to music. It took Sony about 14 years to sell 100 million Walkman devices. Apple of Cupertino, Calif., reached the same milestone in just over a third of the same time.
Apple executives said they had little inkling of how well the iPod would do when the company released the product. “There’s no way anybody could have ever guessed,” said Greg Joswiak, vice president of iPod product marketing at Apple.
Despite vigorous competition from companies like Microsoft Corp., SanDisk Corp. and others, the iPod still holds a commanding lead over rivals, with 74% of U.S. retail sales of MP3 players in February, according to NPD Group Inc. Apple’s share of digital music players sales is smaller abroad, but Mr. Joswiak said Apple is making international sales a major focus for the iPod. He said the iPod has over a 50% share of the market in Japan and over 60% in Australia.
Apple said the company is still primarily selling iPods to first-time buyers. “It’s hard to imagine where the saturation point is,” said Philip Schiller, Apple’s senior vice president of worldwide marketing. “It’s anybody’s guess.”
The company also said its iTunes Store, designed as a close companion to the iPod, and has sold over 2.5 billion songs, 50 million television shows and 1.3 million movies.
