Analysts have suggested that Apple's moves to create a separate division within the company for the iPod could lead to the company expanding its range of digital devices.
Jupiter Research senior analyst Joe Wilcox told MacCentral: "By creating an iPod division, Apple is establishing the device's relevance is much more than just playing music. Apple is recognizing iPod as an integral part of the company's product line and an important contributor to the revenue mix."
"Apple has released a second device in iPod mini, so it's reasonable to assume that the company will continue to innovate particularly with the creation of this new division," added Wilcox.
"The new division clearly shows that Apple sees broad potential beyond offering music devices or services," said Wilcox. "I've said for some time that non-PC devices like iPod could emerge into platforms in their own right. Apple would be smart to begin building an iPod ecosystem around which third parties can develop peripheral and entertainment extensions."
Similarly, Technology Business research analyst Tim Deal said: "Setting up an iPod division does not surprise me. The iPod has taken an integral role in Apple's product strategy, much like the colorful iMac did when it brought the company back from the brink of disaster in 1998. But now, the iPod is accounting for nearly 14 per cent of the company's total revenue, while the iMac has dropped to 13 per cent. It makes sense to focus on a product that's easier to manufacturer, ship, and market than a computer – especially if it's yielding higher revenue and gross margins that I estimate to be near 23 per cent."
He added: "I don't think that Mac hardware development will necessarily take a back seat to the iPod – Apple's total Mac shipments were up year-over-year this last quarter. However, I do think that Jobs is well aware of the fact that Apple's growth is dependent upon exploiting beyond-the-box sources of revenue. Software, services, and iPod sales combined accounted for 39 per cent of the company's total revenue last quarter. Non-computer revenue was up nearly 100 per cent from the year-ago-quarter."