iPod Holiday Buyers: 30% Replacing Older iPods

By Richard Menta 11/06/05

It is always nice to know that your customers come back to buy again. This means that they are satisfied and a satisfied consumer is the greatest asset for any business. It looks like Apple is in very good shape with their iPod.

According to Piper Jaffray one third of those purchasing an iPod this Christmas season are either repeat customers replacing an earlier version of the popular digital audio player (DAP) or adding a secord or third player.

This is actually a critical statistic. It is not unusal for MP3 players in general to be replaced quickly as their average life span is only a couple of years. This is due to both the rapid evolution that a relatively new technology like the DAP experiences in its formative years and the fact that portable products tend to take a beating during everyday use.

Research firm firms like Fulcrum Global Partners are predicting that 10 million iPods will sell in the fourth quarter of this year. That's double the 5.3 million iPods that sold last holiday season. The 3 million repeat customers expected just this quarter alone account for one-and-one-half times more sales than all of 2003 when Apple sold slightly over 2 million iPods.

Impressive statistics considering the dozens of competitors that have arisen to challenge the iPod in just the past few months. Return customers suggest strongly that the iPod will retain its dominance on the industry for a few more years.

It gets better than that for Apple as there is a strong market for second hand iPods. According to Piper Jaffray analyst Gene Munster."There is an emerging market for older iPods. Apple discontinues successful products that people feel some sort of connection to. They're the retro-cool thing."

If people are buying used iPods rather than new models from the competition...well, that says a lot about brand loyalty. Since the closest competitors to the iPod have less than 5% of the market (see graph above), it is quite possible that the used iPod market has a greater share of the market than they each do individually. That's a sobering thought. Almost as sobering is the fact that according to the NPD Group Apple has increased the market share of its new players from two-thirds of the market to 3 out of every 4 devices sold.

Other MP3 stories:
Can iTunes Resurrect Old Time TV?
iPod Killers for Christmas 2005 Part I
iPod Killers for Christmas 2005 Part II
iPod Killers for Christmas 2005 Part III

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