Coffee pods are a fad that is on life support at the value end (i.e., for machines under $100). However, home sales of high-end coffee pod makers are up significantly: MediaPost Publications – Upscale Coffee Makers Drive Segment But Overall It’s Flat – 03/19/2007. As I discovered in Lisbon’s fashionable Chiado district last year, an upscale market for these devices currently exists in espresso-loving Portugal at least.

But the U.S. isn’t Portugal. According to a recent NPD report, the machines are primarily gift purchases — which should be a warning alarm for the technology right there (remind anyone of Krups circa 1990?). Given that these single serving coffee pod machines use stale, pre-ground beans, these days the home espresso drinker generally has increasingly better quality options among nearby cafés and coffeehouses. Which is why I generally believe the survival of the coffee pod format depends more on the bargain end of the coffee consumer market: it can’t sustain itself in a high-end market, because the quality will always be inferior despite the machine conveniences.

UPDATE: March 21, 2007
When you’re living in England and have been conditioned to drink instant coffee for most of your life, even the downmarket home machine marks a real improvement: Sales of espresso machines soar as Brits turn their backs on instant coffee | the Daily Mail.