I’ve been living in the East Bay of San Francisco for over 5 years now. As such, while I don’t do a daily commute, I do often ride the BART from my home to the city. While in a BART car, chugging along to my destination, I naturally spend some time observing the passengers around me. Not surprisingly, many of them are either listening to or staring at some mobile device. These days, I’d estimate that close to 50% of the passengers are doing so. This percentage may get even larger in the months ahead, with BART providing free Wi-Fi and phone service even in underground locations such as the transbay tube.
Five years ago, a BART train rider would have still seen a lot of passengers with mobile devices. However, the specifics have shifted dramatically. Until the last year or so, I could divide most users into two groups. If they had headphones in their ears, they were using an iPod (either a nano or a classic). The occurrence of any other MP3 or CD player was as rare as filet mignon on the menu of a vegan restaurant. For all the rest of the passengers, they were using a mobile phone (although usually not a smartphone); no single brand dominated.
The landscape today is starkly different. Over the holiday break, I was on the BART around a dozen times. On every occasion, the story was the same: Gone were the iPod nanos and classics. I did not see even one! Also gone were almost all of the non-smartphones. I did see a few, but you had to work to find them. Instead, about 90% of the riders with a mobile device in their hands were holding either an iPhone or an iPod touch. Okay, this might be a slight exaggeration; perhaps my memory is experiencing an iPhone halo effect. But I swear that’s the way it seemed. Even my wife, who typically does not pay much attention to such matters, kept poking me to say “Look, another iPhone.” As for the remaining 10%, they were mainly using some other brand of smartphone.
Now, I’m the first to admit that this is far from a scientific survey. Aside from not being able to tell what devices people may have kept concealed for the entire ride, BART passengers are not a likely representative sample of the national population. Still, the difference between BART riders today vs. five years ago is gargantuan. Even as a biased sample, I believe it is sending a message.
The first part of the message is that we’ve reached a tipping point for the iPod — a point of decline in the popularity of all iPods other than the touch. The decline has already begun: In the fourth quarter of 2009, Apple “sold 10.2 million iPods during the quarter, representing an eight percent unit decline from the year-ago quarter.” Of course, that’s still a lot of iPods (which presumably include the touch). So, let me be clear: I’m not saying that traditional iPods are about to vanish altogether. As long as some people want a smaller, cheaper simpler MP3 player — there will be a demand for these iPods. And as long as Apple can make money filling that demand, they will (heck, you can still find portable CD players for sale). But the relative importance of these iPods will wane.
The trend for Apple’s handheld devices in the coming decade can be summed up in two words: App Store. If you can’t download apps to the device, the device is on the road to nowhere. Did I mention that iPod touch downloads were up 1000% on Christmas Day, eclipsing the iPhone for the first time?
Apple may try to ignite enthusiasm for the iPod nano, with features like a video camera. But it’s not going to be enough. Frankly, my take on the whole nano camera thing is largely negative. These days, almost everyone with a nano also has a mobile phone. And that phone probably takes both video and still pictures. The video quality may not be as good as the nano — and the phone may not integrate as well with the Mac’s software. But the nano doesn’t offer MMS. At the other extreme, if you truly want better quality video, you can choose from the Flip to a range of high-end HD camcorders. Overall, it’s hard for me to picture the consumer for whom the video camera is the deciding factor in favor of a nano. There may be a few people who say “Cool. With a nano, I don’t need to get a Flip as well.” But not many. For me, a cheaper nano without a camera would be more attractive.
As for the second part of the message, the iPhone and iPod touch are currently and will remain a potent pair — eventually besting all other smartphones and MP3 players. Google’s just-announced Nexus One may offer some interesting competition here, but I strongly suspect Apple will prevail. Regardless, I’ll continue to monitor BART riders for omens.