Can Steve Jobs save the iPod?

September 4, 2008, 5:51 PM UTC

One of the unintended consequences of the success of the iPhone is that it has rendered the classic iPod and its diminutive sisters — the nano and the shuffle — nearly irrelevant. What do you need a second MP3 player for if you’ve already got a few hundred tunes in your pocket?

Apple (AAPL) was able to goose sales for a while last spring by sharply cutting prices on the iPod shuffle, but the tide is drifting away from the company’s iconic product — which once accounted for nearly 50% of its annual revenue. By last Christmas, sales of iPods, which enjoyed triple-digit growth as recently as 2006, had nearly flattened out. If something isn’t done, they could soon be headed south.

Enter Steve Jobs, who is expected to appear in person at the Yerba Buena Center for the Performing Arts in San Francisco next Tuesday for a special media event entitled “Let’s Rock.” Jobs has made an annual ritual of introducing new iPods in September — giving the company plenty of time to ramp up for holiday sales. In 2005 the star of the show was the original iPod nano. Last year it was the iPod touch.

This year, according to several converging rumor threads, Jobs will introduce a brand new edition of the iPod nano, a slightly modified iPod touch and a jazzed up version of the iTunes software that feeds content to them both. The details:

  • iPod nano. Adding to — and correcting — last week’s rumor of an iPod nano with a long, curved screen, iLounge on Wednesday released blueprint-like specifications for what it claims is the new nano. The specs suggest that this will be the longest and skinniest iPod yet. A new image carried by MacRumors Thursday appears to show the same device.
  • iPod touch. iLounge also published blueprints for the iPod touch, which seems to be getting a more modest redesign to bring it (and its manufacturing processes) more in line with the iPhone 3G. The device is also rumored to be due for a simultaneous memory upgrade and price cut to bring the $299 8 gig iPod touch more in line with the $199 8 gig iPhone 3G.
  • iTunes 8. According to Digg’s Kevin Rose — whose credibility as an Apple prognosticator rose after he correctly predicted the date of the Sept. 9 event (see Apple’s Fall product lineup) — iTunes is set for a “big update” that includes a Pandora-like music recommendation engine and new tools to let users download HD versions of their favorite TV shows and sync them to selected iPods (specifically, the 4th generation nano, the 2nd generation classic and the 2nd generation touch). [See below the fold for a guide to the various generations of iPods.]

Will these changes be enough to bring back the days of double- or triple-digit sales growth? Probably not. But if the price cuts are steep enough and there are enough new and interesting things you can do with iPods — like download applications from the App Store — the latest versions could find their way onto Christmas wish lists for a few more years.

Below the fold: A taxonomy of iPods, past and present:

Chart courtesy of the editors of Wikipedia.