Brand Health Check: iPod

Marketing 15-Jun-05, 12:20

The brand that kick-started the music download revolution may have misread the market with the iPod Shuffle. Bill Britt asks whether the budget device is damaging Apple's image.

Is Apple's iPod starting to lose its lustre? The digital music player that revolutionised the music industry - and transformed the fortunes of Apple Computer in the process - was launched three years ago and became such an iconic product that last year's introduction of the iPod Mini turned into one of the hottest launches of recent years. US sales were so impressive that Apple, running low on stocks, had to delay the European roll-out from April to July 2004.

Yet if recent reports are to be believed, the latest addition to the stable, the iPod Shuffle, is not faring so well. The budget version of the iPod was launched in February, but a 2 June item on the appleinsider.com news and rumours website claimed that Apple was sitting on a 'significant inventory' of the product. The rumour helped to send Apple Computer's stock price down 4.5% in a single day, and by the middle of last week its share price had fallen a further 3%. Apple UK has declined to comment on its current inventory of iPods.

The iPod Shuffle is barely bigger than a packet of chewing gum, but its small size and lower price comes at the sake of performance. The cheaper of the two versions of the iPod Shuffle, which is priced £69, holds only 120 songs, and these can only be played in a random order.

The iPod and iPod Mini have made Apple the digital music player world leader - in the three months to 26 March, more than 5m iPods of all descriptions were sold worldwide. But there are concerns that the iPod Shuffle does not represent value for money compared with its MP3 rivals. It is rumoured that Apple is about to announce plans for another version of the Shuffle with a bigger memory, suggesting that it feels the product needs a tweak.

We asked Tim Booth, creative director of online gadget shop I Want One Of Those, and Mintel analyst James McCoy how Apple can revive the Shuffle's image and prevent the iPod brand suffering.

DIAGNOSIS 1 - TIM BOOTH, CREATIVE DIRECTOR, I WANT ONE OF THOSE

Apple pulled off a remarkable coup when it took over the worldwide MP3 market with the iPod. It was a brilliantly executed brand campaign, riding on the back of a beautifully designed product. Then it made a mistake by bringing out the Shuffle and trying to repeat its success with a very average product. The iPod sold more as a fashion product than a technical one, but that doesn't mean it could afford to be a poor product.

The Shuffle is little more than a memory stick with a 'shuffle' feature. Just because it is white does not mean it will convince a now far more technically aware public. You can buy a higher-spec and more versatile MP3 player for the same money.

What is Apple saying with the Shuffle? What it sounds like to its customers is 'our brand is about being cool and hip, and you have to pay for that'. Customers will pay for a brand up to a point, but if they think they are being ripped off, its credibility will wane, and the brand can become irrevocably damaged.If Apple is not careful, people will become wary of any new MP3 technology it produces.

REMEDY

- Get over yourself. Design isn't everything - make the product as good as the design.

- Stop, think and dump the Shuffle as soon as possible.

- Ask customers what they actually want.

- Plan the next coup carefully, and launch a beautifully designed and highly functional product into an emerging market, not a bandwagon product into an old market.

DIAGNOSIS 2 - JAMES MCCOY, ANALYST, MINTEL

There is no inherent problem with the iPod Shuffle - it is just nowhere near as flexible or as useful as its bigger brothers. Despite the iPod's user-friendly interface, anyone new to the digital music player scene still needs to be convinced that a digital player provides some sort of benefit over a standard CD player, much less a portable CD stereo.

What prevents many consumers from buying a digital music player is the daunting prospect of downloading. It is true users can transfer their CDs onto an iPod Shuffle via iTunes software and do not have to attempt downloading, but Apple has not done enough to show non-users how easy this is.

The iPod Shuffle has not been marketed as an easy-to-use product. Its proposition is that it is the baby of the iPod family, suggesting that buyers need to be aware of the range and its functions in the first place.

The Shuffle should be positioned as a supplementary device for digital music enthusiasts. And Apple must do more to convince enthusiasts that the Shuffle is more than just a glorified memory stick.

REMEDY

- Give current iPod owners a discount on a Shuffle and promote it as a supplementary music player useful when jogging, for example.

- Upgrade the Shuffle quickly to offer some extra features. Be dynamic enough to encourage purchase, but not so dynamic as to siphon sales from the iPod Mini.

- Run a campaign for iTunes to show technophobes how easy it is to transfer music to a digital format.