Nokia Life Cycle

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iPod touch viewed as in final stage of product life cycle

By Neil Hughes
With the iPad mini now joining the iPhone and iPad 2 in Apple's sub-$400 product lineup, the company is expected to reduce its investment in the iPod touch going forward.

Ming-Chi Kuo of KGI Securities, an analyst with a strong track record in relation to Apple's future plans, said in a research note this week that the iPod touch "has entered the final stage of its product life cycle." The latest version, released this month for a starting price of $299, has a larger 4-inch display, but sales are still expected to be significantly affected by the iPhone, which can be had for free with a new two-year contract, and the new $329 iPad mini.

Sales growth of the iPod touch is therefore expected to be limited, even in spite of the major redesign issued by Apple. As a result, Kuo believes that Apple will not invest significantly in developing future models.

Apple announced at its iPad mini unveiling on Tuesday that its new iPod touch and iPod nano collectively sold 3 million units in their first month of availability. The iPod has become a diminishing aspect of Apple's overall business, as the iPhone and iPad have taken center stage.

Even if Apple does focus less on the iPod touch, it's not likely that the company would discontinue the product in the near future. Apple routinely boasts during its quarterly earnings reports that the iPod touch accounts for more than half of all iPods the company sells.

And the $249 hard-drive-based iPod classic, which offers 160 gigabytes of storage, continues to live on in Apple's product lineup, despite the fact that it has not been updated in years.

In April of this year, Kuo predicted that Apple would discontinue its 17-inch MacBook Pro. Only months later, in June, that prediction proved accurate, as the 17-inch MacBook Pro was removed from Apple's notebook lineup.

and then slow down.

As the company will attempt to prolong the maturity phase as long as possible, it will likely introduce alterations and innovations to the product to keep customers interested and stay a step ahead of the competition.

Advances in technology and changes in consumer taste and demand may also add to the slowing down of sales growth of the product during this phase.

Prices tend to drop in this phase due to lower costs as well as a high level of competition, and so industrial profits will fall as well.

market saturation

A situation in which a product has become distributed within a market to the fullest possible extent, leaving demand for the product at a minimum. The actual level of saturation can depend on consumer purchasing power, competition, prices, and technology.

maturity

The stage in the product life cycle where sales growth ultimately peaks, then slows as the product reaches widespread acceptance, and competition is fierce.

Examples

Many popular and known products, such as the iPod and the iPhone, are in the maturity phase at the moment. Apple managed to extend the maturity phase of the iPod by introducing the iPod touch, which introduced a touch screen and new features. It also introduced new functionalities such as the use of apps, making it much more versatile and useful than the older iPods; one could argue that the iPod touch should be considered an entirely new product rather than an innovation on earlier iPod models.

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The stages of the product life cycle are:
•Introduction
•Growth
•Maturity
•Decline

Product Lifecycle Management Stage 3: Maturity

The maturity stage follows the growth stage in the product's life cycle (see Figure 0).

During this stage, sales growth has started to slow down, and the product has already reached widespread acceptance in the market, in relative terms. Ultimately, during...
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