July 14, 2005
The iPod Halo Effect
Posted by Dave Hoffman

Indexsize20050222 Apple reported yesterday that its net quarterly income rose to $320M, from $67M in 2004, drawing on another jump in iPod sales.  As the company noted, computer sales also rose to a four year high. According to an analyst who conducted a "survey of 1,400 consumers", there was evidence of a "documentable halo effect," from iPod to Mac computer sales.

I can offer anecdotal evidence for the effect, as an enthusiastic new iPod mini and iMac owner.  My first iPod, bought two years ago, reminded me of Apple's wonderful ability to make relatively glitch free technology. (I had owned a Mac way back in college, but gave up the cult years ago.)  When I was choosing a new computer, last fall, my iPod experiences made much more open to buying an iMac.  And, recently, I upgraded to the iPod Mini (green! engraved!) based on my happy experience with Apple products.  In terms of accessories for the iPod, I shop exclusively at the Apple store, believing (with some evidence to the contrary) that Apple imposes some kind of quality control standards on their merchants.

Can anyone think of other examples of a halo effect from an essentially tangential product line bringing back a moribund central business?  Off the top of my head, I can only think of fashion/shoe examples, but nothing else in the consumer electronics industry.

Is all of this evidence that Apple has a chance to come all the way back from its disastrously bad decision not to license its products in the 1980s?  Not a chance.

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