Will Apple Kill Off the iPod classic and shuffle?

One blog, got a rumor from one source, yet the rumor is spreading like a bad song. Apple is said to be killing off the iPod classic and iPod shuffle, in favor of only having touch-screen devices. That would leave the iPod touch – an iPhone that doesn’t make calls – and the iPod nano – clearly the worst iPod I’ve ever owned, and I’ve owned nearly every model over the years.

There are reasons that argue for and against this decision. First, why Apple should keep them.

If you look at Amazon.com’s list of best selling MP3 players, you’ll see that Apple holds 14 of the top 20 slots (at the time of this writing; this list is dynamic, so you may see something different). Moving ahead to the second page, Apple has 23 of the top 40 sellers. The first six top-selling devices are all Apple products, starting with two iPod touch models, followed by the silver shuffle, the black classic, the graphite nano, then the silver classic. In other words, the shuffle current sells more units at Amazon than any non-Apple device, and both colors of the classic outsell the best competing product.

We don’t know, of course, how many units each ranking represents. The iPod touch, in positions 1 and 2, may sell 100 times as many units as the third-place device, currently the silver shuffle. Nevertheless, it makes a lot of sense for Apple to maintain products that sell this well compared with competitors. Not only does it beef up Apple’s presence in any such best-seller list, but it also keeps competing products from getting traction in the marketplace. If no one can buy, say, the iPod classic any more, and they fall back on a competitor’s product, another brand will start appearing higher up in the list, leading purchasers who view that list to possibly look at that device. It’s worth noting that not one device in the top 100 on Amazon has anywhere near the capacity of the 160 GB iPod classic. In fact, no currently available MP3 player has that much space (with the exception of a device by Cowon, which is only available from third-party sellers; I don’t know how current this device is).

As for the shuffle, that has a lot of competition; the 1 – 4 GB capacity is where most of the battle is played out, with over 1,200 devices listed on Amazon. Many of them are cheaper than the iPod shuffle, have rudimentary screens, or offer FM radio in addition to music playback. If Apple were to give up this segment, their competitors would be strengthened, and their players in this lucrative segment would take off.

But there are also reasons why Apple should axe these two devices.

Apple is clearly betting on the touch screen as the future of portable devices. The classic and shuffle don’t have touch screens (the latter doesn’t have a screen at all), and consolidating the product line around a concept makes advertising easier. Also, selling apps on the iPod touch is a profitable activity; there are no such aftermarket profit opportunities for the classic or shuffle.

The iPod classic is the only hard-drive-based music player that Apple sells. While this is fragile (I ruined an iPod classic by dropping it once; the hard drive died), it also offers larger capacity than flash memory. However, if Apple can get the price of flash memory down enough to offer similar capacities in an iPod touch, the classic’s only trump card gets beaten. Personally, I like the classic because I have a huge library – much more than it can hold. But if Apple can sell me an iPod touch with the same capacity, 160 GB, or even more, at a comparable price, I’d go for it in a second. The iPod touch is far more versatile, yet far more expensive. The current 64 GB iPod touch lists at $400, compared to $359 for 160 GB on the iPod classic; that’s nearly three times as much capacity. I can’t see Apple offering more than 160 GB on a touch, but if they were to offer a 128 GB model for around the price of the classic, that would tempt a lot of users with big libraries. But it’s still not enough.

As for the shuffle, there is one good reason Apple should get rid of this model: it’s an iPod shuffle. It’s confusing, annoying and it’s only for people who listen to music in random order. It works great, however, for exercising and walking, but I’ve never used my shuffles at any other time. However, it’s the cheapest iPod, and perhaps the first one you buy for a kid, since it’s pretty much unbreakable. So it’s a tough call.

In the end, I don’t think Apple will kill of these two devices. They clearly are not the focus of Apple’s strategy, and no longer merit media events to present new models. Updates to these two iPods may be soft launches; simple additions to Apple’s catalogs with no hullabaloo. Next week’s media event is clearly for the iPhone 5, and, perhaps, a new iPod touch, which is related (because of the same OS), and if Apple updates the other iPods, it will be a footnote. But owning so much real estate in the best-seller lists is valuable for Apple as a brand. It’s too soon to write off all non-touch iPods.