Looking For The Next iPod/Echo

By Rob Enderle April 29, 2016

The Amazon Echo, not the Apple Watch, became the last iPod-like product largely because of a far more accessible price point, a more compelling name, and a far stronger interoperability argument. In fact, I could argue the Echo, which likely had a bunch of ex-Apple folks working on it, is closer to something Steve Jobs would have supported than the Apple Watch.   But what is coming after the Echo and all its siblings?   It could be the rumored next generation Apple Watch or something very different.  

Let’s talk about the elements for the next iPod/Echo-like offering.  

iPod/iPhone/iPad/Echo/?

Looking back at all the prior epic products they had several things in common.  They had a name that could be made into an iconic brand.  Apple TV and Apple Watch are descriptive but not magical while iPod and Echo had far more flexibility, either name could become whatever the company wanted them to be.   The iPod could have even fit a car, a small house, or a furniture arrangement, Echo just needed to be tied to something with sound giving the companies a great deal of flexibility with regard to how they positioned the related products.  

Simple

It needs to be simple to use but do something we either want done or can be made to want done.  The iPod gave us an easier way to carry and find the music we wanted to listen to when we were away from our homes, the iPhone just added phone capability initially then apps, and the iPad gave us size.   The Echo started with pretty much the same music concept but in the home, and all of them were relatively easy to learn to use.  You basically buy it, learn a few simple instructions and your path to value is nearly complete.  

Attractive

It needs to be attractive, very attractive actually, so that users are proud to show it around and help create the viral wave that must result to get it to volume.  The original iPod, while not that attractive to us now, was actually very attractive for its time and the iProducts have always been some of the most attractive in market.  Rumor is iPhones are going back to Corning Gorilla Glass like case over metal which better resists scratching.  

Well Marketed And/Or Viral

The company bringing the product out either has to have the marketing budget to get a lot of people excited about the product or the skill set to create some kind of a viral wave.   It turned out that both Amazon and Apple have both but the less money you have the more critical it is that you know how to heavily leverage your early customers into advocates.   Apple still has a large number of celebrities that use their products and, as a result they remain uniquely able to create iconic offerings but they just haven’t found the right mix since the iPad. 

No Strings

This points to another aspect of the next iconic product, it has to interoperate with stuff people already have.   What Steve Jobs learned with the first iPod, which was a bigger failure than the Apple Watch is, was the device has to work without buying something else.  The first iPod only worked with Apple PCs, limiting its market severely.  After that Jobs made sure every other product worked with Windows PCs as well as Apple PCs, but now the Apple Watch is Apple repeating that early iPod mistake.   The Echo just plugs into any network and runs; though you do need an Amazon account, you don’t really have to buy any other hardware.     

Affordable

The original iPod was pretty expensive, but then so was most everything else back then – suggesting relativity.  I think you could argue the first Mazda Miata at around $13K was a massive hit, but because it was far less expensive than other cars in its class.  This suggests the right product could be thousands of dollars if the market viewed it as a deal, but the odds are better as you get below $200 where the Echo is.   Your typical volume break points are below $1,000, below $500, below $200, below $100, below $50 etc., which is why you see a so many products priced just below these levels.  Odds are the next hot product will be below $500, I’m just saying it doesn’t have to be, it just has to be seen as a value.  

Wrapping Up:

Products coming that have this potential are a future version of the VR Headsets (currently most are expensive or have too many requirements), the consumer version of Microsoft Hololens (currently it is too expensive and lacks consumer software), the Apple car (there are 300K pre-orders for the 2017 Tesla 3 showcasing potential), a future Blackberry Priv (currently Blackberry lacks the marketing resources to do to Apple what Apple did to Blackberry, but the device is closer than the original iPhone was), a wearable device not called a watch (because the name “watch” is probably too restrictive), or some kind of robot (we are really are very close to some kind of robotic consumer product breakthrough).  

Whatever it is look for this balance of elements and wait for the feeding frenzy that follows. Oh, and it goes without saying it may be wise to not be in the first wave as these folks often discover that new products, particularly those where manufacturing has to ramp very quickly, can be really buggy.   




Edited by Maurice Nagle

President and Principal Analyst, Enderle Group

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