Sometimes I can be a little impatient. When I got my 40g iPod I though to myself “Apple is on a bit of a winner here, I wonder if their stock is cheap”. Over a year later, AAPL stock has nearly tripled in price (he notes, kicking himself selling out 4 months ago - doh!).
Way back, when the original iPod was released, folks didn’t think there was much of a market for that type of thing. A posting to SlashDot at the time is worth quoting:
Raise your hand if you have iTunes …
Raise your hand if you have a FireWire port …
Raise your hand if you have both …
Raise your hand if you have $400 to spend on a cute Apple device …
There is Apple’s market. Pretty slim, eh? I don’t see many sales in the future of iPod.
I can remember reading that way back then and thinking that was a reasonable observation - the technical requirements of the 1G iPods did limit it to a narrow target market. The strategy Apple took from there was so correct it’s scary - don’t refactor the iPod itself (beyond capacity and form changes) but adapt it’s interface and software to expand the target market. In retrospect, it is quite spectacular how Apple’s simple decisions to sell 99c songs, release iTunes on Windows and to a lesser extent add USB support, catapulted the iPod into a product that would double their earnings.
Analysts are now projecting that Apple will sell around 23.5 million iPod’s by 2006.
That said, I wouldn’t recommend buying AAPL stock in the new year for a number of reasons - I have a feeling Apple may well become a victim of their own success. Apple are at a fairly critical juncture at the moment and I can’t help thinkin they will suffer a significant popularity backlash when all these new iPod users realise the battery life of their new toys just gets worse and worse. I think my iPod is one of the coolest toys I’ve ever bought, but I will not buy another - my 40gig unit lasts for less than two hours on an overnight charge. I’m waiting for Sony to enter with a decent Network Walkman (but only if they get it working with iTunes). Of course, if Apple fix the battery life issue then I may stay loyal
It would seem the irrational exuberance has affected Apple’s stock price which must be unusal for them. Apple were always very good at making noise in their own space and are famous for having incredibly loyal customers but mainstream popularity is a difficult beast to manage.
