19 years ago, Bill Gates successfully predicted the decline of the iPod but failed to account for Apple’s next revolutionary device

iPod Classic connecting to Mac
(Image credit: iMore)

Do you still use your iPod? Unless you’re either very nostalgic or pretty cool*, you probably haven’t thought about Apple’s old line of MP3 players in a decade. 19 years ago, Bill Gates, the founder of computer giant Microsoft accurately predicted its downfall but failed to capitalize on it. 

In an interview with the German newspaper Allgemeine Zeitung back in 2005, Bill Gates talked about the ongoing success of Apple’s MP3 player, which had launched four years prior in 2001. As spotted by NBC News back in 2005, Bill Gates said: “As good as Apple may be, I don’t believe the success of the iPod is sustainable in the long run”. Continuing on, he told the German newspaper “You can make parallels with computers: Apple was very strong in this field before, with its Macintosh and its graphic user interface — like the iPod today — and then lost its position.”

Interestingly, the comparison he makes to the Macintosh is worth noting as Apple unveiled the MacBook the next year in 2006. Apple had a product in line to deal with the fall of home computer sales. In 2023, Macs accounted for just under 10% of the world’s PC sales. At the time Gates gave this interview, Apple had not yet unveiled Apple TV, the iPhone, or the iPad, amongst other products on the Apple Store today. Though it had experimented outside of it, Apple was primarily a home computer brand. 

The iPod replacement

Gates not only predicted the decline of the iPod but gave what he thought would replace it. He said, “If you were to ask me which mobile device will take top place for listening to music, I’d bet on the mobile phone for sure”. Though he didn’t predict the rise of Apple’s iPhone, he did accurately predict that many users would use their phones to access MP3 files, rather than using a dedicated device. With the iPhone, Apple combined the iPod with a mobile phone, presumably acknowledging that its days were numbered. 

Microsoft has previously entered the phone market, most noticeably with its Lumia range. With its own custom software and iconic tiled-based UI, I have owned a handful of Lumia devices in my life. Though it severely lacked app support, I have always found myself oddly fond of its unique look. The Windows Phone platform was discontinued in 2017. 

In contrast to this, the iPhone 14, one of the best iPhones of 2022, was the top-selling phone of 2023, globally. Of the top 10 best-selling phones of the year, seven of them were iPhones. Gates seems to have been correct in his prediction, but Microsoft could never quite capitalize on either device’s popularity, with Windows Phone and Zune being considered failures now. 

*You might not actually be cool, just a nerd

More from iMore

James Bentley

James is a staff writer and general Jack of all trades at iMore. With news, features, reviews, and guides under his belt, he has always liked Apple for its unique branding and distinctive style. Originally buying a Macbook for music and video production, he has since gone on to join the Apple ecosystem with as many devices as he can fit on his person. 

With a degree in Law and Media and being a little too young to move onto the next step of his law career, James started writing from his bedroom about games, movies, tech, and anything else he could think of. Within months, this turned into a fully-fledged career as a freelance journalist. Before joining iMore, he was a staff writer at Gfinity and saw himself published at sites like TechRadar, NME, and Eurogamer. 

As his extensive portfolio implies, James was predominantly a games journalist before joining iMore and brings with him a unique perspective on Apple itself. When not working, he is trying to catch up with the movies and albums of the year, as well as finally finishing the Yakuza series. If you like Midwest emo music or pretentious indie games that will make you cry, he’ll talk your ear off.