Has Apple Hit the Wall in Music Innovation?

Kevin Maney writes: Well, Apple's big "Rock" event today seemed pretty disappointing. Some new iPods that aren't much different from the old iPods, a little sleeker iPod Touch, some new pricing. No surprises. Nothing awe-inspiring. Apple stock dropped 3% during the show.

Worse, maybe, were the things Steve Jobs made a big deal about. For instance, there's the Nano's "shake to shuffle" feature -- shake the thing, and it goes to the next song. Interesting but hardly a killer feature. Hope it can be turned off. One good subway ride in New York and you'd skip halfway through your playlist.

Another new feature is called Genius. It's supposed to gather meta-data from millions of iTunes users, seeing what songs they group together in playlists. From that, Apple can smartly recommend songs or group similar songs from your own playlist for you. I'll be interested to try it and see how it does, but on the face of it, Genius doesn't seem to take the state of the art any farther than services like Pandora and iLike.

The iPod and iTunes made their debut in 2001. They both have evolved, certainly. But other than adding a video-capable screen, the changes have mostly been in iPod's form factor, capacity and price. On the iTunes side, the major change has been the addition of video products. Arguably, the iPhone -- with its built-in Wi-Fi, which negates the need to connect to a computer to buy songs -- is the most innovative change Apple has come up with in music in seven years.

Apple still has 72% of the digital music player market and still has the most beloved set of products out there. Zune, Rhapsody, SanDisk and other digital music offerings are but a business pimple on Apple's butt right now -- but judging from Apple's event today, some of those pimples are coming up with more interesting ideas than we're seeing out of the market leader. Sales of iPods are already flattening out. If Apple's not careful, it's going to lose momentum in music.