This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Can Apple Stop Defending Its iPod Cash Grab?

Stocks in this article: AAPL AMZN P NFLX GOOG

PORTLAND, Ore. (TheStreet) –- For some reason, Apple  (AAPL) is giving us a new iPod this year.

Our own Chris Ciaccia used analyst input to posit that the iPod still lives because parents need a way for children to fiddle around with the Internet before they reach cellphone age, recently acquired Beats Electronics needs a music-dominated device for its next step and Apple as a whole needs to keep people tied into its ecosystem as pressure from Amazon, Google and others mounts.

More likely, the folks in Cupertino wisely realize that getting some money out of a high-margin product is better than getting none. It's a cash grab and it's unnecessary.

According to Apple, the new 16-gigabyte iPod Touch will come in five different colors -- a throwback to when Apple products looked like a rainbow instead of an ivory checkerboard -- and include a front-facing camera to make it even more similar to the iPhone and iPad mini. That low-end model goes for $199 ($30 less than its last asking price), with a 32GB iPod Touch going for $249 (a $50 cut from the last generation) and 64GB model for $299 (another $50 price drop).

Great. There's yet another device that people won't listen to their iTunes playlists on or download iTunes music to. The number of music download purchases dropped for the first time in 2013, according to Nielsen, and has just continued to plummet in the first half of 2014 as playlists collect dust.

Apple attempted to snap out of it with help from iTunes Radio -- and its failing attempt to use streaming to sell music downloads -- but it discovered the streaming audience doesn't care about buying music. Only about 2% of iTunes Radio listeners ever hit the “buy” button to download a song. Even as a streaming service, iTunes Radio falls short. Its 8% market trails ClearChannel's iHeartRadio (9%), which is basically terrestrial radio streamed to other sources, and Pandora  (P) (31%).

Though Apple's purchase of Beats Music seemed to be more about headphone hardware than streaming, Apple picked up a streaming service as part of the deal. Beats is small -- with user numbers struggling to reach the 1 million mark even after a partnership with 110-million user service provider AT&T -- but it has the respect of music mainstays like Dr. Dre and Nine Inch Nails frontman Trent Reznor.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs