Rumor has it a new iPod Nano is on the way from
Notoriously tight-lipped Apple never announces anything about new iPods, or about any other products, before its splashy unveilings. If you're a customer, that's a minor frustration. If you're a so-called Apple partner playing in the $1.5 billion market for iPod cases, speakers, and other accessories, it's a big business problem.
While many companies these days routinely share strategic information to expand markets, Apple is forcing the free-market converse—a chaotic rush to design, manufacture, and ship compatible products, which one exec calls the "new-iPod fire drill."
Witness the frenzy last October, when Apple introduced its fifth-generation iPod, the first to incorporate video playback. A bigger screen and thinner profile instantly rendered obsolete all cases for previous iPods. But the timing left accessories makers only 23 days to get new cases on retailers' shelves in time for the holidays.
That's why Digital Lifestyle Outfitters' CEO, Jeff Grady, was at the press conference. He called staff at headquarters, and the next-gen specs were quickly relayed to the company's manufacturing base in Taiwan. Two days later, DLO had a new case sample in hand.
Accessories makers conduct preemptive market research to figure out what customers might want to do with their iPods, even before the new players appear. "Often, we've built plans based on our research, and skeletal development plans around those contingencies," notes Gavin Downey, director of product management for the mobility team at Belkin Corp.
And they look for clues from companies that supply Apple with components such as controller chips. "I'm watching the market from the IC [integrated-chip] level to the finished-goods level," says Robert Heiblim, senior vice president of sales, marketing, and product development at Altec Lansing Technologies Inc.
Ultimately, these companies must make some educated guesses. Creating accessories without firm knowledge of Apple's plans entails taking inventory risk. But "if you're reactive," Heiblim says, "you're going to be in trouble."
Apple's comment on all this? You can guess.
"What makes YouTube exciting is its hosting of indie and unsigned music and video, an end run around the big music companies. The syndicates are creatures of the past and YouTube should be cautious about risking the freedom (and free price) of what it does." —Doug Chismar, on YouTube's talks with record companies to show music videos
A version of this article appeared in the October 2006 issue of Fast Company magazine.