new space gray ipod touch

Apple posted some huge sales numbers for the holiday quarter earlier today. During the 3-month period, the company sold 51 million iPhones, 26 million iPads—both records—and a surprisingly high 4.8 million Macs. But not all of its device sales were impressive.

iPod sales decreased by more than 50% since last year’s holiday quarter, with Apple selling just 6 million units during the time frame. And during the company’s earnings call, Tim Cook admitted that it has known for some time that the iPod is a declining business…

Cook’s comment came during the Q&A portion of the call, when he was asked if Apple is still a growth company. Here’s the transcript:

Q: Are you still a growth company? And should we expect the growth rate to accelerate as we go throughout the year? And why if that’s the case?

A: I think it’s important to listen to what Peter said about the guidance, and about the compare year over year. And the  point that he made that the underlying sell through that we’re very confident of growth year over year. That is the way we look at it. I know some people just look at the numbers on a piece of paper.

But the way I look at our business from a sell through point of view, less iPod. Because I think all of us have known for some time that iPod is a declining business. And when you do that, and look at the numbers from last quarter, it comes up to a double-digit growth. And we’re proud of that.”

It’s interesting because although we’ve seen this in the numbers—iPod sales have been sliding downward since 2008—it’s really one of the first times we’ve heard an Apple exec admit it publicly. It makes you wonder what the company has in store for the MP3 player.

First introduced in 2001, the iPod kickstarted Apple’s road to greatness, and it has since served as a halo product, bringing non-Mac users into the company’s ecosystem. In recent years, however, sales of the iPod have been cannibalized by iPhones, iPads and others.

The last update to the iPod touch, nano and shuffle lines came last fall in the form of a new color, and the classic model hasn’t seen an update in nearly 5 years.

What do you think Apple has in store for its iPod lines?