I may have used the wrong word with commoditized. Firstly, Apple has done a great job of riding the engineering curve, from the first iPods, down to several ve

I may have used the wrong word with commoditized. Firstly, Apple has done a great job of riding the engineering curve, from the first iPods, down to several versions of the iPod shuffles. During that period, performance was crucial, partly because it enabled a smaller battery, and therefore a smaller and more convenient size overall. It does seem that iPods are now as light and can carry as many songs as anyone could want - that is, there is little room left for improvement that people will pay for (and I believe the last version of the Shuffle - v.3 - didn't sell that well, even though it was tiny). At this point, the iPod market is ripe for commoditization. Since tech advances have made performance factors no longer an issue, there's an opening for the less efficient modular approach to offer other benefits, like cheaper price, more configurable and so on. But there's a problem. iPod sales are down. They are being cannibalized by iPhones and iPads. That is, performance is now so good, that people would rather carry something heavier than an iPod Shuffle in return for more functionality (like movies, phone calls, internet and apps). I haven't checked, but I imagine the current iPhone probably has similar weight & size to the first iPod. In these new categories, performance again becomes a premium: people would love a faster iPhone, that has more memory, that is lighter (where "love" means "would pay for"). To summarize: the iPod digital-music-player category wave didn't last long enough to become commoditized. But note that my key point remains: Apple needs a pipeline of products, where its integrated approach gives a competitive advantage.