Is Apple's iPod losing its shine?

Since Apple's iPod was released in 2001, the company has become the dominant leader in the digital audio player market - sales of the gadget and its subsequent versions have shot through the roof, aided by the spending power of consumers who view the iPod as the epitome of cool. According to BusinessWeek, the iPod has 74% industry dominance, leaving other rivals trailing in its wake.

The iPod might be losing its lustre though, if recent reports in the media are anything to go by. A report in The Straits Times (ST) detailed how the "sleek pocket-sized MP3 player is losing its shine", quoting figures from London-based YouGov's brand awareness index which showed a steady downward trend of the iPod in the brand index ranking.

The decline in popularity can be linked back to the bad publicity the brand is attracting.  BusinessWeek and Lycos' Wired News have detailed the concern raised by activists over Apple's labour standards in its China-based factories. The resulting ‘sweatshop' image following the brand is particularly worrying.

ST also writes internet chatrooms have become Apple's next battle to guard against, where complaints have been placed about the iPod's unreliability. Add to that the current Creative Technology-Apple lawsuit and a recent eight month-low share price after reports the launch of several new models would be delayed, and Apple's shine is clearly missing. 

Apple has defended some claims: the company states it has a low first-year failure rate of 5%, suggesting instead the iPod's malfunctions stem from customer mishandling.

The YouGov report has a much simpler explanation for the decline - consumers feel cheated and done out by the brand. Due to its early dominance in the MP3 player industry "Apple used to stand for corporate reputation and quality, and people were prepared to pay more because they got it back in quality", research team member Sundip Chahal said.

Whilst iPod is still the market leader even with all the bad press, what can Apple do to endear the iPod to consumers again, and to keep the brand from further decline? Our experts have their say.