Sunday, November 28, 2004

Buy An iPod, Save Your Child's Financial Future

Wonderful little product, the iPod. Your entire music collection is digitally miniaturized into a sleek, portable unit that fits into your pocket (I prefer the mini), allowing you easy portability and immediate access to thousands of songs at the flick of a clickwheel. No more frenzied searches for lost CDs behind the stereo, or carting jewel cases around on your trips. The user interface is elegant, and you can organize and cross-reference artists, albums, songs, genres, and playlists.

But it has the potential to do much more than make music easy to listen to. It's popularity will save your child's financial future.

The iPod is just another tool in a trend towards "disintermediation" - the removal of steps and middlemen within the business chain of value from design, production, marketing, sales, and service. Fueled by the Internet and the digital economy, disintermediation has put information and products directly into the hands of the consumer from the manufacturer. Costly and time-consuming steps, processes, and inventories are removed. Lower costs result. Record store infrastructures are a casualty of this process.

The iPod also promotes the concept of "mass customization" or the ability to tailor products to specific customer needs with the economies of mass production. iPod users can select individual songs to download off the internet, creating their own collections of songs as opposed to "batched" songs by artist from a CD.

Which brings us to saving your child's future. The proliferation of iPods further acclimates the concepts of disintermediation and mass customization, creating an expectation within the younger generation of portability, tailored services, control over assets, and direct access. It's not too far a leap to submit that the iPod generation will take these expectations, apply them to their government services, and tip the balance in the
reform of social security to include personal accounts, and the institutionalization of medical savings accounts, both of which are necessary to address the long-term crisis in our social security system. It may cost more in the short term budget, but in the long-term, a child born in 2000 will only, at best, receive 70% of their promised benefits if nothing is reformed.

So pick up an iPod for Christmas, and maybe your kids won't come back to live with you when you're retired. And that new U2 single is way cool.