One sign that Steve Jobs is back to his old self: He's already sniping at rivals. After Apple's iPod launch event on Wednesday, the New York Times' David Pogue asked the CEO whether he has doubts—as he's expressed in the past —about the market for e-readers, especially Amazon's Kindle. Jobs said he was still skeptical. Amazon, he pointed out, has never released sales numbers for the Kindle, and "usually, if they sell a lot of something, you want to tell everybody." More importantly, Jobs doesn't think people want to buy a device just to read books. "I'm sure there will always be dedicated devices, and they may have a few advantages in doing just one thing," Jobs said. "But I think the general-purpose devices will win the day."
Jeff Bezos could rightly call Jobs' theory bogus: Really? People aren't willing to pay for a device that only does one thing? Have you heard of a little thing called the iPod, Steve? On the other hand, it's been a long while since the iPod did only one thing. Sure, way back in the early 2000s it just played music. Then Apple added support for audiobooks. Next, some models began to display photos. Photos became videos. Then iPods got a new name, a touch screen, a phone, Web browser, GPS, compass, and, through the App Store, basically any other function developers can think up. On Wednesday, the iPod Nano, whose capabilities had been limited to playing music and videos, got a video camera, too. Now the Nano has two completely different uses—it plays media, and it makes media. People who still want a dedicated music player can get the iPod Classic (which also does video) or the iPod Shuffle, but these products are clearly not the apple of Apple's eye or the source of its revenue. (The Nano and the Touch are Apple's best-selling iPods.)
The new Nano signals an inevitable, though still remarkable, transition: The iPod is dead. I don't mean the name won't stick around or that people will stop buying Apple's devices. Rather, the sun is setting on what the iPod once was—a device you bought to play digital music. Nobody knows when Apple will add Internet connectivity to the Nano, but you'd be a fool to bet against it happening in the next three years. And with that, the floodgates: Once the Nano gets the Internet, why not the App Store? And why not GPS, a compass, and a touch screen? At the moment, these options are too expensive to add to a tiny device, but tech is always getting cheaper and smaller. The video camera is just the start—it won't be long before the Nano, like the iPod Touch and the iPhone, turns into what Jobs calls a "general-purpose device." The rest of us have another name for such a machine: a computer.
Not everyone will herald this transition. After all, why do you need a mini-computer when all you want is a music player? That question is a variation on a more general lament regarding the consumer-electronics industry—what critics call "feature creep." Why are they always adding more stuff? The idea of building a camera into a cell phone once struck a lot of people as bizarre—who wants to take pictures with a phone? But it's now impossible to get a mobile without one. Why does that always happen? Why can't they leave well enough alone?
In the case of the iPod, there are two reasons. The first is pretty obvious: Apple wants to sell as many of the gizmos as possible. The iPod Nano sans camera was the world's best-selling music player, and it's not hard to see why. Small, stylish, easy-to-use, and not that expensive, you couldn't really ask for anything more in a music player. Which, of course, was Apple's problem—once you buy an iPod Nano, why would you ever want a new one? (Well, assuming the old one doesn't break.) Apple's third-quarter financial results, released in July, showed that iPod shipments fell 7 percent from a year ago. Tim Cook, Apple's COO, told investors that the decline was due to "cannibalization" from purchases of iPhones and "a reduction in the market size for traditional MP3 players." How do you solve that second problem? Make a device that appeals to people outside the declining market. Hence the iPod Nano gets a video camera.
This gets to another reason for Apple to keep adding features that go beyond the iPod's original purpose: People like more features. The conventional criticism of feature creep is that it adds unnecessary cost and complexity. Attaching a camera to a cell phone adds more buttons, menus, points of failure, and a bigger price, all for something you don't want. Well—something you thought you didn't want. It turns out that despite people's protests otherwise, a lot of people take a lot of pictures with their cell phones—the iPhone is Flickr's biggest source of photos. If cell cameras were truly distasteful, we'd see stripped-down, camera-free phones selling like gangbusters, but that's not the case. And as Apple has shown with iPhone and iPod Touch, adding a lot of features doesn't necessarily make for bloated devices. If you pile on features in an elegant way—if you keep the interface comprehensible and make sure the parts work well together—then feature creep becomes feature nirvana. You can get an iPod and a video camera in one? Why not?
None of this is to suggest that dedicated digital-music players won't stick around for some time. Indeed, the very same dynamics that lead to feature creep on the iPod will probably give us better single-purpose music players in the short run—devices with better screens, more room for music, and at better prices. Today, you can get a 16-GB SanDisk SansaView MP3 player for $100; by next year, its capacity will double, and its price will halve. (Some advice to manufacturers of these music players: Take a page from Palm's playbook and rig your devices to sync with iTunes. Apple hasn't proven that it has any legal right to restrict third-party components from connecting to its software—imagine if Microsoft only let you use certain printer brands to connect to Word—and until it does, why not advertise yourselves as iTunes compatible?)
But don't expect this sector to last forever. In time, these players, too, will morph into computers. That's the way computing goes—as Jobs says, general-purpose devices eventually supplant everything else. There was a time when people bought portable word processors because computers were too expensive and all they wanted was something to write with. But in time PCs got cheaper, more portable, and more useful, and it no longer made sense to buy a writing machine. More recently, folks bought little devices called PDAs, tools to keep your appointments and contacts in order on the road. That was short-lived: Now every cell phone is a PDA. It's also a camera and a jukebox. And then there's the case of the Kindle, a dedicated device for reading books. Uh, Jeff Bezos—you might want to watch your back.