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Apple Dumps PortalPlayer Chip

Zonk posted more than 8 years ago | from the unhappy-executives dept.

147

Quash writes to mention a BusinessWeek article about Apple's decision to not use the PortalPlayer chip in a future version of the iPod nano. From the article: "PortalPlayer stock promptly shed $9.46, or nearly 42% of its value, and more than $220 million in market value. Apple generally doesn't discuss future products, nor its manufacturing or component supply strategies. It had no comment on the matter. But theories about who may have been the beneficiary of PortalPlayer's misfortune are abounding."

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Why were they dumped? (4, Interesting)

Whiney Mac Fanboy (963289) | more than 8 years ago | (#15174149)

Interesting that this announcement from Apple came the quarter after PortalPlayer announced [thestreet.com] a new technology (called Preface) that's designed to work with Windows Vista only.

So - were they dumped for practical reasons or for punitive reasons? What do people think?

Onto a different aspect of this story - the company being touted as the most likely supplier of replacement chips is Samsung (allready a supplier of a good deal of ipod flash memory) [technewsworld.com] . Is it really wise for Apple to trust a competitor [samsung.com] with components crucial to Apple's core business? (ipods are Apple's core business now).

Well, I guess Apple are happy doing business like this [microsoft.com]

Re:Why were they dumped? (1, Funny)

Anonymous Coward | more than 8 years ago | (#15174184)

Maybe their CEO did not greet Steve in the coffee shop earlier that morning...

Re:Why were they dumped? (4, Funny)

gEvil (beta) (945888) | more than 8 years ago | (#15174213)

Maybe their CEO did not greet Steve in the coffee shop earlier that morning...

"I'm going to fucking kill PortalPlayer!"

Whoops. Wrong Steve...

Re:Why were they dumped? (3, Insightful)

ClamIAm (926466) | more than 8 years ago | (#15174235)

I don't believe that Samsung is a direct competitor to Apple in the DAP market, much the same way Dell isn't really a competitor to Apple in the desktop PC market. Apple goes after a pretty narrow market, and they're highly successful there. Samsung is more a more broad-ranging company sells tons of different things [samsung.com] . It's a bit like comparing a small boutique carmaker to General Motors. Both make the same product, but are not really competing against each other.

Re:Why were they dumped? (1)

homer_ca (144738) | more than 8 years ago | (#15174351)

Not really. The iPod is as mass market as they get. They have a product lineup stretching from $70 to $400. Sure, they sell at a small price premium over comparable players, but everybody shopping for a digital music player wants one.

Samsung is more diversified in more markets than Apple, but their MP3 player lineup is just as expensive and much less appealing than Apple. I don't see Samsung picking up the MP3 player market if Apple falls. The only brand that could win by default is maybe Creative.

Re:Why were they dumped? (1)

ClamIAm (926466) | more than 8 years ago | (#15174674)

I think this has more to do with the size of the market for these devices. DAP players are still not completely mainstream, as they require a computer and either some technical knowledge or a friend that can teach you. Before Apple and Itunes, the MP3 player market was a lot smaller and the software/hardware was worse (not that it's a lot better now). But it's important to note that it took a few years for a "breakthrough" product to come along and destroy the rest of the industry under the force of its own common sense. I predict that someone else will find a magic forumla that will compete or overtake the iPod. It might just take a few years.

Re:Why were they dumped? (0)

Anonymous Coward | more than 8 years ago | (#15174237)

Just because Vista would support a second LCD on a laptop that would allow a user to see if he's received emails and other info without turning on his laptop doesn't mean it will be Vista-only.

Re:Why were they dumped? (4, Interesting)

dsginter (104154) | more than 8 years ago | (#15174292)

I think that we are close to seeing why Apple *really* switched to Intel. Put on your tin foil hat because I'm about to take you for a conspiracy theory ride:

1) Intel have been working with Ovonyx [ovonyx.com] since 2000 on a technology called phase change memory [sciencenews.org] (or PRAM, for short). Basically, PRAM uses chalcogenide - the same material used in rewriteable optical media - in a solid state RAM, only it is manipulated electrically, instead of optically. This gives the RAM nonvolatility and random accessibility. It is several orders of magnatude faster than flash (nearly as fast as DRAM) and has a write cycle endurance of 10^12 demonstrated as of about 4 years ago.

2) Intel patent applications have led me to believe that they have made great strides in the technology, while remaining very tight lipped. Here's some insight [uspto.gov] . Note that they are discussing the displacement of SRAM, DRAM and flash with this technology. Noteworthy, is the following:

[0058] Turning to FIG. 5, a portion of a system 500 in accordance with an embodiment of the present invention is described. System 500 may be used in wireless devices such as, for example, a cellular telephone, personal digital assistant (PDA), a laptop or portable computer with wireless capability, a web tablet, a wireless telephone, a pager, an instant messaging device, a digital music player, a digital camera, or other devices that may be adapted to transmit and/or receive information wirelessly. System 500 may be used in any of the following systems: a wireless local area network (WLAN) system, a wireless personal area network (WPAN) system, or a cellular network, although the scope of the present invention is not limited in this respect.

Now, here's where it all begins:

Envision, if you will, a high-speed, nonvolatile memory with very low power consumption. This enables the following:

1) Intel Robson Technology [google.com] . This would answer the question of durability. Why would Intel demo such a technology if flash memory would wear out in short order? With PRAM, you've got CMOS compatibility so you can throw the whole deal right into the processor.

2) Ultra-low power wireless devices. Add Intel's Wireless USB [intel.com] and you've got the perfect medium to talk to your iPod. In addition, your gonna end up using it for more than just an iPod. Store your entire "desktop" on the damn thing, add some authentication mechanisms and you can use any wireless USB equipped PC to log into your "wireless personal server".

There's more, but this should be good for now.

You, sir... (1)

giorgiofr (887762) | more than 8 years ago | (#15174363)

... are a real paranoid :D Thanks for the ride, though. Food for thought!

Re:Why were they dumped? (0)

Anonymous Coward | more than 8 years ago | (#15174635)

It is several orders of magnatude faster than flash (nearly as fast as DRAM) and has a write cycle endurance of 10^12 demonstrated as of about 4 years ago.

You realise a (very slow) 100MHz (10^8/second) RAM bus could exhaust that endurance in (10e12/10e8)/60/60 = 2.78 hours, and a 1GHz RAM bus could exhaust it in 16.67 minutes, right?

You'd need to be able to distribute wear across the entire device. I'm no expert on RAM allocation, but I can't imagine that would be easy.

Just my $0.02...

Re:Why were they dumped? (1)

Oculus Habent (562837) | more than 8 years ago | (#15174789)

Flash has similar write-cycle issues, but neither are intended as system memory, only as storage.

Also, if you find yourself writing to the same single bit one hundred million times per second, you should consider some other technology for your hardware buffer.

Re:Why were they dumped? (1)

Lumpy (12016) | more than 8 years ago | (#15174636)

too bad ther already was a wifi enabled mp3 player on the market. it failed because the nimrods that made it kept it closed and used a nasty stupid way of getting music onto the player.

and their Pc software sucked horribly.

Personally I dont want to transfer music at 802.11g speeds. firewire is insanely faster.

Soniqcast Aireo [engadget.com] is the wifi mp3 player.

dont be tempted. it completely and utterly sucks based on the software and crappy firmware in it alone.

Re:Why were they dumped? (1)

dsginter (104154) | more than 8 years ago | (#15174773)

Personally I dont want to transfer music at 802.11g speeds. firewire is insanely faster.

If you re-read my original post, you can see that I suggested wireless USB (480mbps). I think that you'll find the bottleneck elsewhere in this case.

Re:Why were they dumped? (4, Insightful)

xoboots (683791) | more than 8 years ago | (#15174673)

Looking at the last earnings report from Apple it seems that the REAL reason they switched to Intel was to lower overall component costs. Scale matters -- being the only retail game for PPC was putting a premium on Apple's marginal costs; since switching to the Intel ecosystem they reap the reward of using essentially commoditized parts.

So it wasn't really about a supposed technology ramp-up which they touted and I doubt they were banking on "future" technologies. The way I see it, it was simply a matter of the bottom-line: you really can lower costs when using high-availability parts. Go figure.

Never-the-less, that's some fun technology to be watching.

Re:Why were they dumped? (2, Interesting)

CapnGib (31274) | more than 8 years ago | (#15175665)

the REAL reason they switched to Intel was to lower overall component costs.

That is no doubt part of the story... but what could the cumulative per unit savings really add up to? While there is a very real cost savings on the cpu and associated architecture, the cost of the transition is huge. Rosetta development, maintaining support for 2 architectures, convincing 3rd party developers to ship UBs, Osbourne effect... If it really were only about saving a buck or two, it was a pretty risky move. Still, AMD could have given Apple cheap fast x86 compatible cpus for lower cost (Apple would have become AMDs biggest cpu partner overnight and thus could have likely brokered a pretty sweet deal). So if it were all about marginal costs on the CPU+arch, AMD would have been a better choice. Besides, Apple computers have always been premium-priced compared to WinPCs. They seem to be content in that portion of the market, even with Intel CPUs.

The Intel CPU switch is part of a big package. Not the least of which was the aging mobile G4 cpu. Apple promised consumers and investors faster powerbooks and 3gz powermacs for a long time. With IBM, they couldn't deliver and Steve, with egg on his face, had to give one lame excuse after another. The Intel switch made it at least look like Apple was committed to that promise and things are looking up for the mac division once again. Commodity arch makes possible faster powerbooks, imacs and eventually faster powermacs. Even if it cost Apple the same per unit it is necessary to keep the line alive.

Would the Intel switch make an Intel iPod chip deal more likely? Probably. This certainly put Apple in (even more of) a position to pressure PortalPlayer for cost or features. The iPod is still Apple's cash cow. Competing DAPs come and go with more features or lower prices. One day a non-Apple DAP will supplant the iPod. This is the market where cost REALLY matters and commoditized parts makes a BIG difference. Apple dumped Synaptics touchwheels in the name of cost. No doubt PortalPlayer saw the writing on the wall. Cheaper, better iPods are guaranteed, and necessary and this point. The Apple-Intel relationship makes that more likely than an Apple-IBM or Apple-AMD relationship.

Re:Why were they dumped? (1)

xoboots (683791) | more than 8 years ago | (#15175896)

Interesting but...

...if it were all about marginal costs on the CPU+arch, AMD would have been a better choice...

The AMD infrastructure is still of a much lower volume than the Intel infrastructure and has fewer suppliers. Intel is still going to be cheaper in the long-run. The other costs involved in the switch are not negligible but neither are they insurmountable, especially since this time around they were porting an already provably portable OS. I wouldn't be tempted to claim the osborne effect in terms of the switch-over either -- the facts haven't borne that at all.

As for IBM/Freescale being able to keep up to the technological challenges -- I think they could (and do); however, neither really have a vested interest in doing so in timeframes that meet Apple's comptetitive retail needs while Intel (and AMD) does have such an interest. I really think Apple finally decided to evaluate suppliers that feed the retail market and decided to partner with the biggest ecosystem. By far that is Intel's.

As for Apple being priced at retail at a premium to PC products -- that really has nothing to do with marginal costs. That is simply brand power on Apple's side. Reducing costs and maintaining brand power increases earnings -- which is precisely what Apple announced in their earnings report.

What I find very interesting is the false presmise that Apple needed to switch their computing platform to Intel to be able to broker (speculatively I should add) unrelated technology deals with Intel that concern the iPod platform. There is little or no sense to that as far as I can see.

All that said, this switch to Intel certainly does give Apple many opportunities to leverage Intel's considerable product line (especially when compared to AMD) -- everything from CPUs to integrated graphics and sound, compilers (this is barely ever mentioned but I wouldn't be surprised to see announcements on this end) and so much more. I also wonder if they have signed cross-sharing agreements on their patent portfolios. All of these things a player smaller than Intel could not provide.

Re:Why were they dumped? (2, Interesting)

camt (162536) | more than 8 years ago | (#15175016)

Your conspiracy theory is well crafted, except for the fact that PortalPlayer provides the processing chips, not the memory, for the iPods. Apple already has a fairly long, prepaid contract with Samsung for the memory, if my own memory serves correctly.

That said, I wouldn't be surprised to see Intel processors (ARM or XScale?) on a touch/widescreen video iPod in the near future. So I think your theory may be correct about Apple seeing the benefit of a strong Intel partnership not just for the Mac, but for the iPod as well, but I think focusing on the memory is missing the target.

FYI chalconides (or chalcogens).... (0)

Anonymous Coward | more than 8 years ago | (#15175109)

refers to a portion in the periodic table. Specifically the group contains anions of oxygen, sulfur, selenium, tellurium and polonium. I imagine what you're actually referring to is a newer solid state material containing some binary/ternary solid state material that includes chalconides (chalcogenide) - unless they hijacked the nomenclature for marketing....

Re:FYI chalconides (or chalcogens).... (1)

CapnGib (31274) | more than 8 years ago | (#15175877)

Chalcogenides, specifically the "phase change" type, in MatSci-speak, refers to non-oxide chalcogenide glasses and crystals, like Ge-Sb-Te. They tend to have big temperature difference between crystallization (Tx) and melting (Tm) points, Tx Tm, and it cools amorphous. Since the amorphous and crystalline phases are different optically and electronically, these materials make nice persistent optical memory (CD-RW) and potentially nice persistant solid state storage media.

Re:Why were they dumped? (1)

brarrr (99867) | more than 8 years ago | (#15175719)

just to pick nits... and because its along the lines of what i do, chalcogenide isn't a material exactly, but a class of materials in the same sense that nitrides are a class of materials. chalcogenides have O, S, and Se Te usually, sometimes also Eu and others.

europium chalcogenides were the first semiconducting magnets, predating the field of spintronics (spin electronics which has been a subject of a few /. articles) by 20-30 years... but their useable temperature is a max of 4 or 5 kelvin.

word.

Re:Why were they dumped? (0)

Anonymous Coward | more than 8 years ago | (#15175935)

Although technically oxygen is a chalcogen, just like S, Se, Te, it is a special one. When a materials scientist says "chalcogenide" she usually means a non-oxide chalcogenide.

Feel free to stop calling oxides chalcogenides.

Re:Why were they dumped? (1)

Jopop (952828) | more than 8 years ago | (#15174329)

Well if samsung screws up (IF they provide replacement chips somewhere in the future) their product will suffer too, plus imagine all that lawsuit money for apple. Win-win situation.

Re:Why were they dumped? (2, Interesting)

vought (160908) | more than 8 years ago | (#15174353)

I think Portal has always had designs on the Windows Media/Media Center market. When I worked there a few months after the first iPod shipped, employees were strongly discouraged from talking about their then largest (and possibly only) customer. I worked there for six months and never heard the word "Apple" from a single employee.

The PP2002C,D, etc and PP5003 were good designs to get Portal off the ground, but it was never a product designed for Apple, just a convenient all-purpose dual core CPU with some nice specialized I/O logic. I think Apple probably found the PP500x series a convenient fit, but they can probably get away with less power and more specialization at this point.

I'd be happy that Portal is trying to move into other markets besides the iPod - relying on that one product line to move all their silicon was dangerous - although now they're really over a barrel unless they can ink some significant deals pretty soon - they've added, uh, quite a bit of staff since I contracted there in 2002, and instead of the oldish early '80s location in the silicon ghetto off of Scott Blvd. they're now in fancy new digs...but I still wish the tech pubs dept. would "get back to me".

CLEARLY INTEL (1, Interesting)

Anonymous Coward | more than 8 years ago | (#15174399)

Ever wonder why Apple choose Intel, not AMD for their x86 products? Especially that 32 bit wanna-be dual core, when AMD's design is so much better?

My answer is that there were two categories of chips in the running: computer chips and potable product chips. By combining both chips in a deal, Apple could leverage much better pricing and have more influence over whoever was their supplier. It's a little known fact but AMD also have an ARM like product based on the MIPS architecture (Alchemy AU1200 [amd.com] ) which has media extensions. My speculation is that AMD and Intel were both in the running. However AMD lost because its MIPS product was weaker than the StrongARM product, but the Intel CPU was good enough.

Re:CLEARLY INTEL (1)

Sam Haine '95 (918696) | more than 8 years ago | (#15174708)

MIPS's power consumption is really nowhere near as good as ARM's. Plus ARM is bringing out the desktop-level cortex [arm.com] next year, and AMD really has nothing comparable waiting in the wings.

Re:CLEARLY INTEL (1)

Pope (17780) | more than 8 years ago | (#15175667)

Because Intel could provide the CPU, chipset, everything, all from one supplier who isn't going to see real supply problems.

AMD "lost" because they could not provide what Apple wanted; hell, I doubt they were even in consideration.

They were dumped to use intel chips (2, Insightful)

goombah99 (560566) | more than 8 years ago | (#15174544)

Cringley predicted this months ago. Cringleys speculation was that the reason Apple chose Intel over the nominally superior AMD was to get access to intel technologies on a broad level, including their low power embeded chips for the ipod. (Which they were familiar with from the Newton).

Re:Why were they dumped? (1)

FirstTimeCaller (521493) | more than 8 years ago | (#15175786)

...this announcement from Apple...

Apple did not make this announcement. Portal Player did. Something about wanting to remain up and up with investors...

Re:Why were they dumped? (1)

henryhbk (645948) | more than 8 years ago | (#15175839)

Apple used to use IBM chips for their CPU's while competing against IBM in the desktop and laptop markets, they have also used Sony components while competing in the MP3 and computer markets. These large corporations are heavily segmented (the chip business is often a seperate business unit from the consumer product devisions) so this is not as crazy as it seems.

Re:Why were they dumped? (1)

icebike (68054) | more than 8 years ago | (#15175944)

The Broadcom Conference [yahoo.com] call STRONGLY hinted that newer broadcom chipsets (smaller, lower power comsumption, cheaper, faster, yadda yadda) were going to be the replacement for these PortalPlayer chips.

Much of the work of several chips has been bundled into single chip solutions by Broadcom, making fabrication much easier for video applications and handsets (cellphones).

Apple didn't make this announcement. (-1, Informative)

Anonymous Coward | more than 8 years ago | (#15174195)

PortalPlayer did. Nice proofreading, editors.

Re:Apple didn't make this announcement. (1)

gEvil (beta) (945888) | more than 8 years ago | (#15174271)

And nowhere does it say that Apple made the announcement. Nice reading skills, AC.

Re:Apple didn't make this announcement. (1)

idontgno (624372) | more than 8 years ago | (#15174282)

Sheesh. "Informative", forsooth.

I'm not sure what you're whingeing about. Nobody said anything in the title or summary about an "announcement" by anyone.

Hell, I guess technically, you're correct; within the context of what shows up directly up in /., Apple didn't make this announcement. But doinking the editors is just silly and trollish.

Hell, there are plenty of things to doink editors about here; making crap up is pointless.

Re:Apple didn't make this announcement. (1)

monoqlith (610041) | more than 8 years ago | (#15174298)

Uh - who said that Apple made the announcement? The summary says that BusinessWeek's article is about Apple's decision to drop PortalPlayer, not the announcement of its decision to drop PortalPlayer.

Sigmatel or their own? (2, Informative)

WiZZLa (912473) | more than 8 years ago | (#15174209)

It's possible they are making their own chip, but wouldn't it be ironic if they went with Sigmatel (who bought Rio). Maybe then they can finally get gapless playback and a decent mp3 player.

Re:Sigmatel or their own? (1)

pintomp3 (882811) | more than 8 years ago | (#15175178)

i don't think gapless is dicated by the chip. you can get gapless on your ipod by loading rockbox now. doesn't matter to most people anyway since often their songs aren't ripped for it and they r buying singles instead of albums more. listening habit has changed too, random/shuffle doesn't benefit from gapless.

Re:Sigmatel or their own? (1)

xPosiMattx (797462) | more than 8 years ago | (#15175532)

You already can get gapless play back in the iPod with RockBox [rockbox.org] 's firmware, which would imply its not the fault of the PortalPlayer chip.

Samsung (2, Insightful)

Metabolife (961249) | more than 8 years ago | (#15174238)

You are treating Samsung as an evil business. Just because they are trying to enter a marketplace doesn't mean they will sabotage their reputation by selling faulty chips to apple. Seeing as how the volume of ipod's sold would tower over the volume of samsung players sold, samsung would probably be better off selling apple computer chips.

I know why! (-1, Offtopic)

DarkYoshi (895118) | more than 8 years ago | (#15174240)

Apple's dumping PortalPlayer? This can mean only one thing: The regular MacBooks are being announced this Tuesday! And from this information, we can also see that they will have 1.66ghz Core Duos and 13.3 inch screens!!!!1!!1!!1!!11!!!one!!!!1!

In another news ... (0, Offtopic)

porky_pig_jr (129948) | more than 8 years ago | (#15174266)

Apple decided not to use Microsoft software in the future version of their OS. The shares of Microsoft promptly went down by 50%.

Not dumped entirely (2, Informative)

john82 (68332) | more than 8 years ago | (#15174268)

Apple has NOT dumped PortalPlayer entirely. At least, not yet.

Instead, Apple announced that PortalPlayer's latest chip will not be used in an upcoming version of the iPod Nano. PortalPlayer is the supplier for this particular chip in the current Nano and Video iPods. The announcement made no mention of changing the supplier for the current product line.

Re:Not dumped entirely (1)

tgd (2822) | more than 8 years ago | (#15174500)

Actually if you RTFA, Apple didn't announce anything, PortalPlayer announced it, and Apple has not confirmed it.

As such there was nothing said about Apple's plans, as it was not an apple release.

Re:Not dumped entirely (1)

FirstTimeCaller (521493) | more than 8 years ago | (#15175625)

Excellent observation! This announcement really only affects future flash based iPods. It is interesting to note that Apple did already stray from PortalPlayer for the shuffle. Not that PP really cared, shuffles didn't exactly sail off the shelf.

PortalPlayer is still very much in consideration for future video iPods.

So, who will get the new Nano business? My money is on Intel XScale, but a good argument can be made for Samsung.

Disclaimer: I work for PortalPlayer (but I have no inside knowledge as to what Apple is thinking...)

Seems obvious (5, Interesting)

joebooty (967881) | more than 8 years ago | (#15174270)

The Nano got destroyed by suppliers not being able to provide product when the Nano oversold estimates. You will all remember how we were flooded with nano commercials at launch and then the commercials disappeared and so did the Nanos because Apple could not assemble any units to sell.

With this move Apple shifts from having a critical part supplied by a bit player to the part being supplied by one of the behemoths of the industry in Samsung.

Furthermore the Korean semiconductor companies are infatuated with marketshare. I am certain Samsung offered them a tempting deal as long as they were the singlesource.

Re:Seems obvious (0)

thryllkill (52874) | more than 8 years ago | (#15174730)

Uh... when did the nano disappear? I see them in stores all the time, and I have two friends who both just recently bought nanos.

I just spoke to Dvorak, he knows. (4, Funny)

Tibor the Hun (143056) | more than 8 years ago | (#15174273)

According to him it's Chevrolet!

You heard it here first folks!

Let Me Guess.... (3, Interesting)

dduardo (592868) | more than 8 years ago | (#15174275)

They are switching over to Intel's Xscale processor. Since they are buying bulk Core Duos they must have gotten a discount on the PXA27x.

Massive Drop In iPod Demand (-1, Troll)

Anonymous Coward | more than 8 years ago | (#15174283)

Apple needs to do something. The iPod gravytrain is coming to an end as the massive drop in iPod sales shows. Not that that should be a surprise to anyone. Everyone knew that the iPod party for Apple only had so far to go.

Everyone I know how has an iPod either has no plans to buy a new one, their 5 or 10gig one is all they need, or their next music player will only be some form of cellphone even if they have to wait for a good enough product to show up in the market.

Re:Massive Drop In iPod Demand (4, Informative)

monoqlith (610041) | more than 8 years ago | (#15174344)

Ok, now you're simply making things up. From this article regarding Apple's most recent quarterly earnings reports:

"Apple said it shipped 1,112,000 Mac computers and more than 8.5 million iPods music players during the quarter. The iPod shipments represented a 61 percent increase over the same period last year."

Therefore what you have just said is patently incorrect. QED.

Re:Massive Drop In iPod Demand (1)

IamTheRealMike (537420) | more than 8 years ago | (#15174746)

That was then, this is now. The Times reported today a huge drop in iPod sales. Steve Jobs was quoted as saying "To be honest, nobody ever sold 8.5 million music players in a quarter before anyway".

Re:Massive Drop In iPod Demand (1)

swid27 (869237) | more than 8 years ago | (#15174347)

Yeah, I'm sure Apple's very disappointed in selling a mere 8.5 million iPods [apple.com] during the quarter when consumer demand is at its lowest.

Re:Massive Drop In iPod Demand (0)

Anonymous Coward | more than 8 years ago | (#15174414)

You are out of your fucking mind if you think anyone at Apple is anything but in a panic over this chart:

(red line, a little hard to see)
http://www.pegasus3d.com/macsales9904.gif [pegasus3d.com]

Apple's main cash cow just had a 50 percent drop in sales! Wake the fuck up!

Re:Massive Drop In iPod Demand (1)

giffnyc (253778) | more than 8 years ago | (#15174489)

Hmmm.. Christmas sales spike the curve, creating an unheard of demand, it descends after the holidays but to 40% above last years sales. I'm sure they're terrified, you troll.

Re:Massive Drop In iPod Demand (0)

Anonymous Coward | more than 8 years ago | (#15174552)

Go away little Apple troll!

Checks for post holiday drop after 2002...nope!

Checks for post holiday drop after 2003...nope!

Checks for post holiday drop after 2004...nope!

Checks for post holiday drop after 2005...nope!

Checks for post holiday drop after 2006...look out below!

Warning from Apple for next quart...check!

Party's over Mac loonies.

Massive Drop? (1)

horace (29145) | more than 8 years ago | (#15174349)

Would that be the massive drop leaving them up only 40% on last year?

Re:Massive Drop In iPod Demand (0)

Anonymous Coward | more than 8 years ago | (#15174375)

There does seem to be a pretty strong backlash against iPods over the past few months, at least in my experience.

Not saying people are ready to dump their iPods in the trash, but up until last year everyone wanted to talk about their iPod or plans to buy an iPod almost incessantly. This year so far I never hear people talk about their iPods. They still use them, and are everywhere, but the excitement and novelty really seems to be gone. And the little I do hear from people seems to be of the tone "I'm sick of hearing or seeing iPods"

Even though it has only been a few years that Apple has been growing due to iPod sales, if they really do continue to fall off Apple is going to be in a world of hurt since Mac sales appear to continue to shrink.

I think if all Apple does is come out with another colour change or other such tweak that is just a way to try to get existing iPod owners to buy a new one, people are going to seriously start looking at other players. The competition have come a long way in catching up to the iPod interface.

Re:Massive Drop In iPod Demand (1)

Oculus Habent (562837) | more than 8 years ago | (#15175135)

There are so many factors in play, though. There was a huge spike for Christmas -- possibly in response to price drops and the Nano. Despite that popularity, that level of sales isn't sustainable. It would be safe to say that the phrase "market saturation" is never far from some minds in Cupertino. New products are in the pipe, almost certainly. I personally expect to see Apple switch to an Intel chip in the next generation of iPod, but I don't expect it out until mid-summer -- to catch the back-to-school buyers.

iPod is both a technology and a fad. It is a pop-culture icon. Pop-culture status tapers off, but it remains to be seen how well the technology -- ever-changing as it is -- endures.

As for Mac sales shrinking, you'll note the PowerMac and the iBook have suffered the largest decreases, while the PowerBook/MacBook Pro
and the consumer desktops (iMac/eMac/Mac mini) increased substantially in 2005. This year is particularly ugly due to the architecture switch. Note that iBook sales fell off sharply because the product has not had an update since July -- far longer than it's average life cycle -- and an architectural change is anticipated. The PowerMac has been slowly losing market share to the increasingly-capable portables -- portables have been gaining market share across the industry. The PowerMac is also suffering from architecturitis, awaiting replacement with what I assume will be called the Mac Pro, but it will likely be the last release with the new architecture.

The raw numbers don't look great for Apple, but they don't tell the whole story. You have to look as the story that goes with them. Anything else is missing the big picture.

Re:Massive Drop In iPod Demand (2, Informative)

monoqlith (610041) | more than 8 years ago | (#15174381)

Ok, now you're simply making things up. From this article regarding Apple's most recent quarterly earnings reports:
"Apple said it shipped 1,112,000 Mac computers and more than 8.5 million iPods music players during the quarter. The iPod shipments represented a 61 percent increase over the same period last year."
Therefore what you have just said is patently incorrect. QED.


Sorry, didn't post the link [eetimes.com]

Re:Massive Drop In iPod Demand (5, Informative)

Jerry Rivers (881171) | more than 8 years ago | (#15174394)

"...as the massive drop in iPod sales shows."

For more information on this "massive drop in iPod sales" please read: http://www.ipodobserver.com/story/26405 [ipodobserver.com]

Highlights from the above story:

  iPod shipments are up 61 percent compared to last year, and the company has now sold over 50 million units.

  The iPod market share is up, too, accounting for 78 percent of the portable music players sold. In December 2005, that number was at 71 percent

  Outside of the United States, the iPod is the top-selling MP3 player in the United Kingdom, Japan, Australia, and Canada.

Despite strong iPod sales, Apple sees room for major growth in the MP3 player market. Based on sales of other consumer electronic devices, Mr. Oppenheimer noted, "The MP3 player market has a lot of room for growth. According to Forester research, U.S. household MP3 player penetration was less than one quarter that of digital cameras as of the end of 2005."

Re:Massive Drop In iPod Demand (0)

Anonymous Coward | more than 8 years ago | (#15174475)

Bzzzttt!!!

The chart of iPod sales over the past few years is all anyone needs to see the massive drop in sales for the first time since the iPod was introduced:

http://www.pegasus3d.com/macsales9904.gif [pegasus3d.com]

Throwing around unitless words like 'strong' mean nothing. Apple themselves are warning that next quarter is looking weak, too.

Something is clearly rotten in iPod land.

Re:Massive Drop In iPod Demand (0)

Anonymous Coward | more than 8 years ago | (#15174528)

Wow, you're an idiot. Year over year sales increased 61%.

Re:Massive Drop In iPod Demand (1)

djrogers (153854) | more than 8 years ago | (#15175029)

That chart CLEARLY says that product breakdowns after q1/2005 are ESTIMATED. Given the latest SEC filings from apple, the estimates were clearly wrong.

Re:Massive Drop In iPod Demand (0)

Anonymous Coward | more than 8 years ago | (#15175562)

1. The product breakdown disclamer refers to the fact Apple used to reported sales of iBooks, PowerBooks, iMacs and PowerMacs separately. Starting in 2005Qq they lumped everything into desktop and portable Macs. Thus, the totals for the desktop and portables Mac on the chart are exact, but the breakdown between iBook/Powerbook etc are estimates. This has nothing to do with iPods, for which they have never reported model breakdowns.

2. There was indeed a quarter-on-quarter drop in iPods sales of almost 40%, from 14mln [apple.com] to 8.5mln [apple.com] As you can see the chart is quite correct, and this was indeed the very first quarter-on-quarter drop in iPods sales in its 4 1/2 year existence.

3. For retail figures it is common to report growth compared to the same quarter of the previous year, which is a quick and dirty way to eliminate seasonal fluctuations. A quick glance at the chart, however, shows that the historical figures are too volatile and that there is far too little data to cleanly seperate trend from seasonal influence.

Re:Massive Drop In iPod Demand (2, Insightful)

aristotle-dude (626586) | more than 8 years ago | (#15175825)

You are comparing a record breaking Christmas season quarter with the next quarter? Do you know anything about economics? There is always a significant drop in demand for consumer electronics in general in the quarter following Christmas. Looking at the year over year for the "same" quarter, there is a significant increase. The stats you quote may be accurate but your interpretation of the number is flawed.

Re:Massive Drop In iPod Demand (1, Insightful)

Anonymous Coward | more than 8 years ago | (#15175882)

"There is always a significant drop in demand for consumer electronics in general in the quarter following Christmas."

Why would you make such an obviously false claim when the iPod sales figures show EXACTLY the opposite of what you are claiming in a chart just a couple posts above you?

iPod sales have NEVER decreased after the holiday quarter EVER in the life of the product. And for the first time sales not only didn't continue to accelerate after the holidays, they DROPPED 40% and you are trying to claim that is normal???

A 10% drop in sales would be major bad news for Apple.

A 40% is huge. Especially mixed with the warning they are giving on next quarters sales already.

Re:Massive Drop In iPod Demand (1)

zbend (827907) | more than 8 years ago | (#15174816)

I can stream my entire music collection (regardless of format) in stereo to my samsung a900 phone from Orb ( http://www.orb.com/ [orb.com] ) running on my home computer, from anywhere I get sprint coverage ( which is more places than I ever go ) limited only by the size of my hard drive and no syncing or even thinking about it. So without some drastic changes the next generation of phones (or some kind of wireless net connected music playing device) should kill the ipod. (I said should)

Re:Massive Drop In iPod Demand (0)

Anonymous Coward | more than 8 years ago | (#15174935)

Holy shit is that what I've been looking for.

What type of battery life do you get with it? And what quality can you stream your music at?

I think I might be ready to toss my two year old 10gig iPod for one of these.

Why would this kill the ipod? (1)

algerath (955721) | more than 8 years ago | (#15175181)

Music subscription plans "should" have killed ipod and itms.

One of several "ipod killers" with better features, cheaper, gapless playback etc. should have killed ipod.

How many times have we heard this item will kill the ipod? The only one who can kill the ipod is Apple, or maybe if for some reason it stops being cool.

Algerath

Re:Why would this kill the ipod? (1)

zbend (827907) | more than 8 years ago | (#15175268)

Your probably right, the only thing that makes people buy an ipod is they believe its cool. I guess the question is what is it that makes them believe that?

cool factor is part of it (1)

algerath (955721) | more than 8 years ago | (#15175558)

I don't exactly know why they are thought of as so cool. I think part of it is the ipod really is a pretty good product, maybe not the best but I have one and I like it better than the Archos player I had before it. I think the biggest factor is the ipod, to many people = mp3 player. I know several people who have other brands of mp3 players that call them ipods. Apple has gotten the ipod to the point where the name is nearly synonymous with mp3 player, and this will carry a lot of sales.

Algerath

Re:Massive Drop In iPod Demand (4, Funny)

Anonymous Coward | more than 8 years ago | (#15174991)

Holy shit! The crazy Apple fans are in full Protect The Hive mode!

Onward Mac Soldiers! Let the unbelievers perish in a hail of moderation!

Damn funny (1)

SuperKendall (25149) | more than 8 years ago | (#15175845)

I'm one of those "crazy mac fans" but I salute you on your post, some quality humor there.

Re:Massive Drop In iPod Demand (1)

enitime (964946) | more than 8 years ago | (#15175073)

"Apple needs to do something. The iPod gravytrain is coming to an end as the massive drop in iPod sales shows."

I think it's a bit early to draw that conclusion, I think it's more likely that the iPod sales just had a massive spike during the christmas shopping season. There was an extreme jump in sales last quarter, and if an extraordinarily large number of people were given iPods for christmas, they don't need to buy one the following quarter.

Wikipedia iPod sales graph [wikipedia.org] .

My magic 8-ball predicts... 9.5M-10.5M units sold in Q3 2006 (from 8.5M in Q2).

It's not you, PortalPlayer... (2, Funny)

mekkab (133181) | more than 8 years ago | (#15174327)

It's me. We'll always have the first Nano...

-Apple

Power of Apple (1)

WiggyWack (88258) | more than 8 years ago | (#15174400)

Wow, amazing how much power Apple has to just decide they're going to switch chip makers and therefore crush a company.

Re:Power of Apple (0)

Anonymous Coward | more than 8 years ago | (#15174436)

Not amazing... when 90% of PortalPlayer's sales come from Apple.

Re:Power of Apple (1)

bano (410) | more than 8 years ago | (#15174706)

This is what happens when you rely on 1 customer for a majority of your business.

PP is expensive! (5, Insightful)

Fengpost (907072) | more than 8 years ago | (#15174439)

Portal Player solution is very expensive. Last time I checked, it requires 2 ARM 7 chips with an external auio codec chip to run the the non video version iPod. There are plenty of more cost effective solution from the competitors such as Sigmatel, Philips or Freescale.

It is probably just a cost cutting move for Apple.

Re:PP is expensive! (1)

FirstTimeCaller (521493) | more than 8 years ago | (#15175713)

The PP chip does not require an external audio codec (what do you think those two ARMs are for?). Also, just to clarify, the PP chip contains dual core ARMs (not requires). The current video iPod is reported to use an external video codec (perhaps that is where your confusion comes in).

You can bet that Apple negotiated a favorable pricing deal on the Portal Player chips. I don't think cost is the whole issue.

Re:PP is expensive! (0)

Anonymous Coward | more than 8 years ago | (#15175853)

Hey Dickwad,
Due to a fuckup by ARM, if you have an ARM7 licence you can put as many ARM7 cores on one die and you only pay one licence fee. So making dual core ARM7 SoC devices only costs you one licence fee. If you have a requirement that splits relatively easily onto multiple cores you end up paying less licencing fees using multiple ARM7s than if you put a faster ARM9 core on.

So the use of twin ARM7s is deliberate.

Other Theories (5, Interesting)

caramuru (600877) | more than 8 years ago | (#15174465)

As an unhappy PortalPlayer stockholder, I have been reading everything I could find on the company since the news hit the street yesterday morning. The stock price has been driven down to less than two times the cash (on a per share basis) the company has in the bank - a very pessimistic valuation. Something not mentioned in the article is pricing. Some believe that either PortalPlayer has been too greedy or the new supplier (not known now) very agressively priced its chip. The new supplier might be Samsung, who already supplies flash memory for the iPod. Samsung could give Apple a "twofer" price on memory and processor. Another potential supplier might be Sigmatel. Until someone at Apple leaks the name of the supplier we will not know who the new supplier is. Apple employees, get busy! Doing business with Apple is not always a happy experience - ask IBM.

Re:Other Theories (1)

pslam (97660) | more than 8 years ago | (#15174624)

I am always confused by stockholders who are surprised when this sort of thing happens. Ignore the press released, the stock pricing, the valuation, the marketing, and all that useless stuff. The reason they are suffering can be summarised rather concisely: Their Product Sucks.

Concentrate on that in future and you might save some money :)

Re:Other Theories (2, Informative)

augustz (18082) | more than 8 years ago | (#15174914)

So true. If the lexus of the space can't afford your product (and apple is the lexus of the mp3 space in terms of amount of money to burn) I'd say it's not going to be too popular with anyone else.

Search for portalplayer here: http://www.rockbox.org/irc/rockbox-20040811.txt [rockbox.org]

Granted, this isn't PR speak, but people wondering why in the world someone would use the product. Of course, as an investor, this is probably the first thing you are tracking, how good is their product relative to their competitiors. I'm just excited Apple has moved off them. Likely means we'll be seeing some good battery times.

Re:Other Theories (1)

Lehk228 (705449) | more than 8 years ago | (#15175903)

mor eimportantly, if you own stock in any company which depends on a single customer for the majority of it's value sell that stock and sell it quickly.

Re:Other Theories (0)

Anonymous Coward | more than 8 years ago | (#15174626)

Fine then - its SigmaTel.

Not content with moving iMac to iNtel... (1)

TCK314 (969876) | more than 8 years ago | (#15174488)

They're doing the same with the iPod?

In related news... (3, Funny)

tomcres (925786) | more than 8 years ago | (#15174583)

...Intel is expected to announce what it is going to do with all of the Pentiums with the FDIV bug that were recalled... stay tuned...

Re:In related news... (1)

Jon Abbott (723) | more than 8 years ago | (#15174949)

That {chirp} sounds like {chirp} a good {chirp} idea, using FDIV-bug CPUs as {chirp} MP3 decoders!

The reason they dumped PortalPlayer (5, Interesting)

pslam (97660) | more than 8 years ago | (#15174594)

...is because their chips were a buggy pile of putrid crap. Seriously I'm surprised they lasted this long. It's an underpowered chip by today's standards (ARM7TDMI? are they joking?), it's not the lowest power consumption available by a long shot, and they don't integrate enough peripherals to lower total product cost. They're years behind the competition now, and they have nobody to blame but themselves.

So, congrats to Apple for finally ditching them. You should all look forward to some better performing and longer lasting iPods in the future. Yes, I'm rather bitter from having to deal with the muppets at PortalPlayer in the past.

Re:The reason they dumped PortalPlayer (1)

FirstTimeCaller (521493) | more than 8 years ago | (#15175771)

Yes, I'm rather bitter...

I think that explains your ridiculous comment quite well.

Apple is not stupid. For whatever reason they chose to go with another supplier, I can assure you that it was not due to any technical issues or lack of capabilities on the Portal Player chip.

Could be good, probably not. (1)

TheSkepticalOptimist (898384) | more than 8 years ago | (#15174625)

When Sony and other digital music players are getting 30 - 50 hours playback, why can't Apple release a product that truly offers more then 14 - 18 tops?

Apple also needs something a little more robust, to offer such features as some PDA like functionality, games, or better video support (i.e. HD video out).

Either that, or someone just offered Apple a cheaper version of the same concept so Apple can make more profit on their cheaper product lines.

Re:Could be good, probably not. (0)

Anonymous Coward | more than 8 years ago | (#15174907)

Agreed - Newton 2.0 anyone?

If they made one - I'm game....

Re:Could be good, probably not. (3, Funny)

a_nonamiss (743253) | more than 8 years ago | (#15175134)

Apple also needs something a little more robust, to offer such features as some PDA like functionality, games, or better video support (i.e. HD video out).


Yes, Apple clearly needs to do something about it's 80% market share [macnn.com] in the portable music player business. I mean, clearly, consumers aren't about to put up with this shoddiness.

Re:Could be good, probably not. (1)

CptNerd (455084) | more than 8 years ago | (#15175661)


Apple also needs something a little more robust, to offer such features as some PDA like functionality, games, or better video support (i.e. HD video out).

Yes, Apple clearly needs to do something about it's 80% market share in the portable music player business. I mean, clearly, consumers aren't about to put up with this shoddiness.

Seriously! I mean, come on, a music player that just plays music??? Who would want such a useless thing???

Why, how would I microwave my lunch, clean my toilet, brush my cat, and sequence DNA if my iPod won't do it? C'mon, Apple, more features! All the cool kids are doing it!

Re:Could be good, probably not. (1)

Pope (17780) | more than 8 years ago | (#15175757)

When Sony and other digital music players are getting 30 - 50 hours playback, why can't Apple release a product that truly offers more then 14 - 18 tops?

Have you taken the time to read the fine print that the asterisk in those claims points to? You get 30-50 hours on files compressed to 32kbps WMA, meaning more files fit into the RAM buffer. You could easily do the same on an iPod by compressing to 32kbps AAC files.

Re:Could be good, probably not. (1)

Warlock7 (531656) | more than 8 years ago | (#15175789)

Apple just announced yesterday that they are going to drop the price of the iPod [news.com.au] in the near future.

So, your profit allegations are baseless.

As for the playback time, Apple has been bitten by a class action for claiming that the iPods played longer than expected. Once bitten, twice shy. Also, don't forget the end sentence on the Sony site:
Up to 50 hours continuous playback with built-in lithium-ion rechargeable battery (fully charged) when playing in ATRAC3 @ 105kbps and normal power save mode. Actual battery life may vary based on usage patterns.
My iPod plays for much more than 18 hours. It seems more likely that Apple has taken to reporting an average while Sony and others like to claim the absolute maximum they can get. Apple does also list the 60GB model playing up to 20 hours [apple.com] .

In Other News: (1)

Parkaman (931608) | more than 8 years ago | (#15174631)

Today MICROSOFT CORP. (MSFT) announced the imminent rollout of PortPlay, it's new chip designed to work seamlessly with all varieties of MP3 players, including iPod. Speculation of a Microsoft/Apple merger led to a wild office party in the Justice Department's Anti-Trust wing. Details are still sketchy at this point, but rumor has it that a truckload of cigars was dropped off compliments of Fmr. President Clinton. Microsoft stock was up sharply on the news, but was outpaced by SWISHER INTERNATIONAL GROUP INC. (SWR), which posted a 250% increase, a company record.

W007 7p (-1, Redundant)

Anonymous Coward | more than 8 years ago | (#15174703)

about bylaws Distro is done Here those Uber-asshole to make sure the

"so-called" (2, Insightful)

M-G (44998) | more than 8 years ago | (#15174831)

Does this drive anyone else nuts? FTA: ...one of Apple's main suppliers for so-called NAND flash memory.

It seems like anytime some media type doesn't understand tech, they drop 'so-called' in front of the name.

sex with a JFucKer (-1, Redundant)

Anonymous Coward | more than 8 years ago | (#15175180)

UseRs. This is [goat.cx]
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