As the iPod Stays Hot, It Risks Losing Its Cool

:: THE NEW YORK TIMES 8 May 2005 | By KEN BELSON ::
SO President George W. Bush listens to an iPod, it was learned recently. How uncool is that?

You'd think any marketer would love a little product placement with the consumer in chief. But the iPod - and Apple products generally - have reached near-cult status partly because they cultivate an image as the electronic toys of the anti-establishment set.

If someone as mainstream as President Bush has caught on to something allegedly so hip, what can Apple do to keep iPod chic and cutting edge?

Many successful gadget makers have wrestled with this issue and few have conquered it. Nokia's handsets, treasured for their sleekness just a few years ago, are now ridiculed as clunky blocks. Palm organizers, once signature accouterments in Silicon Valley and on Wall Street, barely register a yawn when they are pulled out at dinner parties.

Even TiVo, which is now synonymous with the digital video recorder, has lost its cachet as cable and satellite operators introduce their own versions.

The stakes, though, may be higher for Apple, a company that for two decades has cultivated the aura of techno-chic. Apple promotes the iPod, for instance, with a counterculture package of freewheeling dancers, psychedelic coloring and raucous music. The company's devotees are almost as fanatical as the Deadheads who followed the Grateful Dead on tour.

With simple styling and an easy-to-use format, it is little surprise that even the president has stumbled upon the iPod. Apple has a daunting 75 percent of the digital music player market, dominating companies like Dell and Samsung.

But these and other rivals are bound to catch up, which means Apple must continue to innovate to stay cool. "It's no longer, 'Will the iPod stay fashionable?' but 'Can Apple keep the tempo up?' " said Paul Saffo, a strategist at the Institute for the Future in Palo Alto, Calif.

Apple isn't standing still. It has extended its iPod line to include iPod Minis - smaller, cheaper versions of the iPod with less memory - and the iPod Shuffle, a stripped-down player that Apple promotes for its ability to play songs randomly.

Apple has also encouraged the development of accessories, including a flashlight that snaps on to iPods. And despite resisting at first, Apple has introduced the iPhoto, which lets users download digital photos from their computers.

It has also latched onto musicians to share some of their luster. Apple makes an iPod U2 Special Edition complete with the autographs of each of the band's members. Its online iTunes store is also a repository of exclusive songs and hip tastes.

"When I look at that store, it's clear Apple has a music director who manages the store, like a radio station manager," said Joe Wilcox, who tracks the industry for Jupiter Research. "It's a subtle thing, but it feeds into the whole cool factor."

Cool, though, is temporal, particularly in an industry as ever-changing as consumer electronics. "There could be something out there that is on the verge of coming out that has a new delivery system that could knock it out quickly," said Irma Zandl, the head of the Zandl Group, a research firm based in New York that tracks youth trends.

One school of iPod watchers says Apple should connect its mobile machines to the Internet, much like the Blackberry and cellphone. This would let people download songs on the run.

Cellphone companies are thinking the same thing; several have released handsets with digital music players inside. Motorola plans to release handsets that can download songs from the iTunes Web site.

Others say Apple has to integrate the iPod into everyday items like cars and exercise treadmills. The company now works with carmakers to make room on their dashboards for the players.

Still others say Apple needs to do for DVD's what it did for CD's - let people download movies quickly and cheaply and move them to their players with little fuss.

Apple is not alone in trying to find a new paradigm. Sony has spent a quarter of a century massaging the Walkman brand to keep its flame burning. Sony has released waterproof players, ever-thinner designs and even a line specially made for children. Walkman morphed from a cassette player into a CD player in 1984, and a mini-disc player in 1992.

Yet despite its ubiquity, the Walkman has limped recently as an MP3 player because Sony's format is harder to use than Apple's.

Which all shows that even the most recognizable and stylish brands lose their shine.

Geoffrey Moore, author of "Crossing the Chasm," an exploration of the life cycle of electronics, notes: "Anything truly edgy necessarily has its own mortality, like Baudelaire or Jimi Hendrix."