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King of Music Players

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Times Staff Writer

Short of an actual prize, one of the most coveted handouts at this year’s Grammy Awards, Academy Awards and MTV Video Music Awards was the iPod music player stashed in celebrity goody bags.

The bags are sometimes filled with specific recipients in mind. Pamela Anderson reportedly doesn’t get fur and Alicia Keys, who has spoken publicly against the illegal trade in diamonds, isn’t given any of those. Bono, of the band U2, does get sunglasses, of which he is fond.

The one constant that doesn’t diminish in popularity among the stars is the iPod. Highlighting its chic, rapper Sean “P. Diddy” Combs showed up at the post-MTV awards party brandishing an iPod encrusted with 120 diamonds.

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Sales of iPods, which Apple Computer Inc. introduced in October 2001, are expected to hit 10 million by the end of the year. The success of the digital music player has burnished Cupertino, Calif.-based Apple’s image as a maker of sleek, elegant computers.

But as with any pop culture phenomenon, iPod’s popularity could fizzle as public tastes change.

“With a lot of pop culture products, if something becomes so much of its time, then it becomes a parody of itself,” said Robert Thompson, a professor of media and popular culture at Syracuse University. “ ‘Miami Vice’ was so incredibly hip on TV and became so associated with the mid-80s, but three years later you couldn’t watch it without bursting out in laughter.”

Apple founder Steve Jobs said he wasn’t worried that iPod might one day be considered the Rubik’s Cube of the 21st century. Instead, he said, iPod is capitalizing on a fundamental shift in the way people buy and enjoy entertainment in the digital age.

Online music sales are growing rapidly -- fueled in large part by Apple’s iTunes Music Store -- and the popularity of digital video recorders like those made by TiVo Inc. underscores people’s desire to slice and dice entertainment to suit their personal tastes.

“I don’t think we’re seeing trendiness here,” Jobs said of the iPod. “I think we’re seeing a product that’s truly revolutionizing the way we listen to music. We didn’t sell 2 million of them last quarter because it’s trendy, we sold 2 million last quarter because it’s a phenomenal product that’s reinventing the way people enjoy music.”

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Jobs has a lot riding on being right.

Since the iPod launch, Apple’s sales have nearly doubled to $2.35 billion in its last fiscal quarter. The hard disk-based iPod accounted for 23% of Apple’s sales, its biggest product category. Profit, meanwhile, has nearly tripled, to $106 million last quarter. Apple’s stock closed Wednesday at $64.05, near its all-time high of $75.18 during the technology boom.

Piper Jaffray analyst Gene Munster last week predicted in a report to investors that Apple shares could climb to around $100 as iPod’s success draws more people to Apple’s computers.

Indeed, Apple’s strategy has been to use iPod to promote home entertainment networks powered by its big-ticket computers and laptops such as the iMac and PowerBook.

“That’s where the real opportunity is,” Munster said.

Although Apple’s PC sales have climbed in recent years, the company’s global market share remains just 2%. Sales at larger rivals such as Dell Inc. and Hewlett-Packard Co. are growing faster, off much bigger bases.

But Apple is the undisputed king of digital music players. The iPod, which sells for $250 to $600, makes up nearly two-thirds of the market for all digital music players.

Munster and Merrill Lynch analyst Steve Milunovich expect Apple to widen its lead even further next year when the company rolls out smaller, cheaper iPods based on flash memory -- the kind used on memory cards for cellphones and hand-held computers.

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“It’s the 21st century’s first consumer icon,” said Michael Bull, a sociologist at the University of Sussex in Britain.

Bull called iPods the contemporary equivalent of the sleek Citroen DS car of the 1950s and ‘60s, which was “a mobile cathedral, very sensual and tactile.” IPods are “cathedrals of sound, this beautifully molded artifact that you hold in your hand,” said Bull, who is writing a book on portable audio technologies.

IPods are akin to the Walkman portable stereo cassette players introduced by Sony Corp. in the 1970s, which wowed listeners with their ability to make music sound as if it were emanating from inside one’s head. But iPods, although more expensive, have the added aura of a sculpted work of art, minimalist yet elegant, their users instantly recognizable by the device’s white headphone wires.

Celebrities are spotted using iPods. Gucci and Prada sell plush iPod holders. Contestants on the reality show “The Apprentice” were seen relaxing or working out with iPods a few weeks ago. Certain BMW models allow iPods to directly hook up to the cars’ stereo systems. Irish rockers U2 joined with Apple to put out a special edition red-and-black iPod.

Marketers have picked up on the iPod’s magnetism. The boutique New York hotel Dream in Manhattan plans to provide iPods for guests in each of its 200 rooms, preloaded with up to 2,000 songs. The Crescent in Beverly Hills has iPod Music Minibars with speakers in each of its 40 rooms, preloaded with jazz, lounge and electronica.

Duke University nudged along the iPod’s hip factor by issuing iPods to its 1,600 incoming freshmen in September. About a dozen classes use iPods regularly in their classwork, such as language and music courses.

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Robert Lucic, a Duke professor of computer science, records the lectures in his course on information science and information studies and posts them to a website where students can download them.

“It’s more useful than I originally thought,” said Rahul Dewar, a freshman from Marlsboro, N.J., who sometimes re-listens to Lucic’s lectures when he’s on a bus. He also uses other iPod features such as the built-in alarm clock, “for naps between classes,” he said.

Lucic, 61, was an early adopter, buying one of the first iPods in 2001, initially for his wife. But he wanted to get his hands on it, so he bought his wife an iPod Mini as soon as they came out last year.

Now he has five of the devices.

That sort of enthusiasm has marked fads of the past -- think Beanie Babies -- but trend-watcher Jane Buckingham said Apple may well be able to keep the momentum going.

“What Apple does very well is tap into social trends without you even knowing it,” said Buckingham, who is head of Intelligence Group/Youth Intelligence, a trend forecaster based in New York and Los Angeles.

For instance, the latest iPod stores and displays photos. That hits a sweet point with Americans, who “have a desperate need for documentation, for scrapbooking,” Buckingham said. “It seems we’re desperate to document our lives, to have photos of every trip we’ve taken. In a world that lacks stability, it gives you a bit of comfort, even shows you’re a good parent.”

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Technology analysts likewise appear confident in the iPod’s enduring popularity.

“Apple has done a bunch of things right. They came up with a brilliant hardware design that’s compelling to touch, that you want to hold,” said Darcy Travlos, who covers mobile multimedia for brokerage Caris & Co. “Apple has executed a tremendous strategy right under the noses of everyone, and people didn’t notice until they sold 2 million of them last quarter.”

And just look at history, said Rod Bare with Morningstar in Chicago.

“It looks like iPod is penetrating at a similar rate of digital cameras and DVD players,” he said, pointing out that “both are still going strong.”

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