Can Apple play role of market leader or will iPod go the way of Mac?

“The runaway success of the iPod poses a happy problem for Apple Computer Inc. that the computer maker has not had in years: how to remain the market favorite, not just the favorite underdog. Apple has sold more than 3 million of its sleek iPods, taking nearly 50 percent of the market for digital music players, and its iTunes online music store claims 70 percent of all songs bought online,” according to The Associated Press.

“But now Apple faces a renewed push by Microsoft Corp., which wants to shape the digital standard for music on the Internet, raising the risk that Apple could again fail to hold early gains in a fast-growing market, analysts said. ‘The ultimate risk is that they do get marginalized, just like they did in the PC area,’ said Phil Leigh, an analyst with market research firm Inside Digital Media,” according to The Associated Press.

“For now, Apple remains the commercial force to be reckoned with in digital music, an unaccustomed front-and-center position for a company that founder Steve Jobs has compared to BMW for its reputation for engineering excellence, high sticker prices and single-digit market share. Apple must also continue to expand the number of tracks available on its music store, analysts said. Apple now has more than 700,000 tracks for sale online and has sold more than 70 million songs since the music store’s introduction a year ago,” according to The Associated Press. “At the same time, Apple must keep tabs on rival players, some of which sell for as little as $49 and use Flash memory rather than the hard disk drives that Apple’s iPods use. Prices for iPods range from $249 to $499.”

Full article here.

17 Comments

  1. i typically despise posts that are unthoughtful and uninformed. after long contemplative thought and severe adherence to facts and history, i have come to a conclusion about this article…

    WHATEV!

  2. micorfost’s attempts to “standardize” the digital music industry is a joke…. WMA is a joke… of course, they’ll win since most consumers will blindly buy the cheapest thing they see, or is too foolish to realize that there are alternatives to m$ products.

  3. why does everyone keep comparing the music industry to the computer industry of the late 1970’s? If it hadn’t been for IBM letting MS do their software then MS would be a footnote in the industry and WordPerfect and Lotus would be running the world. I don’t see any similiar company holding that kind of power in the music world.

  4. Rival players don’t start at $49.

    “At the same time, Mercedes must keep tabs on rival vehicles which sell for as little as $150 and use pedal power rather than the internal combustion engines that Mecedes’ cARs use. Prices for Mercs range from $20,000 to $200,000

  5. It may be FUD, but it’s a common marketing message. You can buy a car from any manufacturer FROM $xxxxx. Then when you go in to see one, they don’t have any and offer to sell the one for $2000 more. The unknowing consumer won’t care that the $49 MP3 player is useless, they’ll just know that their friends payed more for the “same” thing.

  6. Apple is missing the boat again. For the first time people have come to them and want to align themselves and they are turning them away. So, they go to Micro$oft. It’s going to be all against apple and apple will crumble once again and have a 5 percent market share. it’s just a matter of time.

  7. cpr86, i think Apple will ally with other companies when they see a positive outcome at the other end (see HP and Pepsi). Thinking about it, you dont see people complaining that Target its allow to sell Walmart brand products. There are plenty of other options for people to buy music outside of iTMS, they just wont work with the iPod (except physical CDS) Apple has just proven that iTMS+iPod is a better product than Napster+DellDJ or whatever. I think Apple should strike deals or creat products that will not compete directly with the iPod but can play AAC/Fairplay file (Palm,Nintendo Gameboy, Nokia Cellphones, whatever)

  8. Jimbo, I read the article you posted, and I disagree. It is needlessly pessimistic. Even assuming the supposed conspiracy, or collective stupidity, of IT professionals, Apple can do plenty about it.

    Advertise osX security, get a real desktop line that competes with the average ($715) pc, and wait until the reality of the other way of doing things becomes evident to those entry level buyers. Fud exists because it is not exorcised on the most basic, person to person, level.

    Apple’s failure to do these simple things is silly, and any award Steve gets ignores this basic failure.

  9. Why are so many Apple fans eager for world dominance for Apple? Apple is a well managed firm making money, we are enjoying their products so what is wrong? I hava a Mercedes (albeit an old one) which is a dream to drive. It doesn’t bother me one bit that 90% of the population is not driving a Mercedes-Benz.

  10. Joe, Do you really believe that Apple could make inroads into big business just by offering a low cost competitor to the $715 PC? They’ve (big business) invested too much in existing hardware, specialized programs, support infrastructure and “stupid knowledge” to even consider it. It took a year at my company just to come to the conclusion that it was alright to switch from Compaq to Dell.

    As much as I’d like to see it, I don’t think Apple could handle it. Can you imagine what would happen if businesses started changing their PC boxes to Macs en masse. Apple wouldn’t be able to fill the orders for 3 years.

    Now if they could get a company like HP to manufacture a low cost Mac with G4/5 inside, that might be exciting.

  11. right Jimbo, the supply problem, as Apple now does things, is huge.

    I am not talking about Apple matching hp, compaq, or dell unit for unit. I wouldn’t think the least expensive mac would retail for less than $800. But it could be attractive instead of quirky in appearance, save the cost to apple of the monitor since most switchers would have their own, and, with proper advertising, not go like pancakes but certainly like Belgian waffles with the works.

    If the mac user base were twice what it is now, the stupid IT’s would have a much harder time justifying their attachment to the MS bugfest, because many more dumb terminal users would know the truth.

    This plan makes a lot more sense to me than relying on the buy an ipod/buy a mac dream, something that hasn’t become real, and , I think, isn’t likely to. Emacs and imacs were fashionable once, as was art deco. Fads come and go, and the computer that looks like r2d2’s trailer went a long time ago.

    An Hp clone? Sign me up!

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