“With more competitors jumping into the market, the question is whether Apple will be able to keep its dominance in the portable music player market or whether the iPod will eventually go the way of the firm’s Macintosh business, which accounted for only 1.9 percent of the overall PC market last year, according to research firm Gartner,” Matthew Yi writes for The San Francisco Chronicle.
“Richard Doherty, an analyst at the technology research firm Envisioneering, said Apple is simply being selective about its partners,” Yi reports. “Jobs ‘is doing very, very careful licensing with the right world-class companies, whether it be HP or BMW,’ he said. In June, Apple announced a deal that allows BMW to integrate the iPod with the carmaker’s stereo system.”
Full article here.
MacDailyNews Take: This is a better article than most of the others looking at Mac history vs. iPod ‘licensing,’ because it strives to present a balanced look at the matter. However, Yi never comes right out and says that the basic concept itself (Apple’s repeating their Macintosh mistakes with the iPod, so the iPod is doomed) is fatally flawed, so we will:
The Macintosh platform required and still requires huge investments by developers to create compatible software. So, when faced with budgetary contraints, they chose and still sometimes choose to go with the most popular platform. The iPod simply plays music that can be encoded, for very little cost, in any format the “developers” (musicians and labels) desire: AAC, MP3, WMA, etc. The music doesn’t need to be rewritten, recorded, and remastered. It’s like writing Photoshop once and then pressing a button to translate it for use on Mac, Windows, Linux, etc. Whomever draws an analogy between Mac OS licensing and the iPod/iTunes symbiotic relationship is simply highlighting their ignorance of the vast differences between the two business situations.
An article by John Gruber entitled, “Why 2004 Won
These so called writers and analysts just don’t get it.
And MDN misses the point that developers only stopped developing for the mac when Windows started to dominate the market. And it’s not outside the realm of possibility that Windows became the dominant platform *because* Apple didn’t open up their platform.
“And it’s not outside the realm of possibility that Windows became the dominant platform *because* Apple didn’t open up their platform.”
yeah I’m sure it had nothing to do with Microsoft’s strongarm tactics. It wasn’t a fluke that Windows came preloaded by almost every computer manufacturer at the time.
I think hairbo needs to go read Grubers other article… “The Art of the Parlay” … http://daringfireball.net/2004/08/parlay ..then go back to contemplate his belly button.
The Daring Fireball article is genius. Again on their part I might add. But don’t entirely underestimate the FUD about the iPod that exists. I had a friend ask me recently why I bought an iPod when the file format was proprietary and when you can “only get music for it from the iTMS.” I then informed him you can rip your own physical CDs as well as play ANY unprotected mp3 file as well, including the thousands some downloaded from Napster 1.0 back in it’s hayday. There are still a lot of people out there that think if it says “Apple” anywhere on it, it must be proprietary. So sites likes MDN and Daring Fireball have to continue to publish the truth about the iPod.
With more competitors jumping into the market, the question is whether Microsoft will be able to keep its dominance in the operating system market or whether Windows will eventually go the way of CP/M?
And hairbo obviously didn’t read the John Gruber article in which he points out that the Mac was NEVER the dominant platform EVER (unlike the iPod), thus the whole “iPod is repeating the mistake of the Mac” theory has no basis in history.
As the Daring Fireball article excellently argues, Apple is playing a whole different ball game PRECISELY because the iPod/iTMS has such huge marketshare – a luxury Apple never had with the Mac, which achieved only about 10% marketshare at its height. Thus, already history is not repeating itself.
Interesting article. my belly button is fine, and lint free.
The point here is that Apple needs to have partners in this new market–and HP is a really nice beginning–if they want their format to survive. If Microsoft gets in this game and throws its WMA weight around, AAC/Fairplay could go the way of Betamax unless Apple has an army behind the format. There is no doubt in my mind that if the whole market followed that format, Apple would still have a huge chunk of the pie, since their delivery mechanism (iTMS, iPod, Airport Express) are way, way better than anything else out there. Right now, Apple has the clear advantage in the marketplace, but the market is still *very* young.
also.. the whole mp3 revolution came about because people were able to rip their music into mp3 in seconds and share it.
where in history have people been able to EASILY port the way music can easily be ported…
this makes the iPod market-share all the more stunning
haribo, I think you are still not see the forest for the trees. The fact is, Apple is winning the online music battle, despite Microsoft’s efforts and despite competition from a gazillion WMA-based stores.
As such, with such a huge advantage, there is no need for Apple to devote engineering resources to support sad players such as Real. As John Gruber also pointed out, supporting Real’s Harmony will do nothing to sell more iPods – all it will do is allow Real to actually sell songs. So why should Apple scratch Real’s back when Real is clearly not interested in doing anything for Apple. And vague statements about how Real support “will sell more iPods” just doesn’t wash.
I think people are not giving Apple enough credit, because they are generally being blindsided by the convention wisdom of misinterpreting the Mac’s history.
Apple IS engaging in licensing, but only when it makes actualy business sense. The HP deal was the first. A few months ago, Apple cut a deal with the 3rd largest PC maker in China to pre-load iTunes on all their machines. No doubt other deals will follow.
But it DOESN’T make sense to give away the technology nilly-willy to partners who are not committed to iTMS/iPod. Is Real committed in that way? A big, fat NO. Real is only committed to its own technology, so why should Apple give Real a free ride? The kind of people who won’t buy an iPod because it won’t support Real would never buy an iPod anyway, since they will just go for the “value” offered by junk gadgets like the Dell DJ.
I guess I don’t think M$ has really entered the online music game yet, which is why (at least IMO), Apple hasn’t faced any real competition. I’d like nothing better than to see Apple wipe the floor with M$ in this game, but I don’t think the game is on yet.
If the iTMS really is a loss-leader for the iPod (as they claim), then it seems to me that they should get as many other music delivery companies promoting their own hardware product. If Apple licenses Fairplay to Real et. al., then all of those companies can make the claim “our songs play on an iPod”. And then it would follow that iPod sales go up, and Apple is happy. Their iTMS would likely remain the dominant portal, but then they start scoring off licensing deals *and* people who prefer to get their legal music from somewhere other than iTMS.
I am certainly not advocating that Apple give away Fairplay, nor license the iPod software. Nor am I even saying that Apple has to bend Fairplay to meet the “needs” of other vendors. They put a Fairplay spec together for Real, put a price on it, and offer that. It’s Real’s job to get their songs into that format, and to ensure that it works with the iPod.
Now, if Apple’s not really telling the truth about iTMS being a loss-leader, or they’ve got other big plans up their sleeves that makes licensing not worth it, then all of this goes out the window. But we haven’t heard anything like that so far.
I still see the *most* important factor here being format, and given that, Apple must make Fairplay the de facto standard. Granted, the game has changed since it’s moving away from physical media, but I think the market will likely converge towards 1 format for music delivery, just as it has in the past. And I think this becomes more and more true as audiophiles start adopting the digital format. I know players can play multiple formats, but you can lose quality translating those files from one to another. And really, who the hell wants to migrate an entire library from one data format to another?
Yes, Apple is winning big-time right now, and they’ve done incredible work with the iPod and iTMS, and I don’t think they will lose their competitive edge in that realm. But big leads can evaporate. And that’s where, in my opinion, all these comparisons with Apple of the 80’s come in. They had a big advantage and they lost it. Details may be different here, but the overall outcome could still be the same.
Hairbo,
‘Apple had a big advantage’. The Mac had about 10% market share. That is not a big advantage. The Apple ][ computer had a larger share but that market was dead ended when the Mac came out. Should they have kept going with the Apple ][, III ect? How does that equate to the iPod situation? It equates to the Neuton and the loss of the PDA market but not the iPod.
Again, Apple never had “a big advantage” in the ’80s to ever lose. Their market share peaked out at 10% or so even back then as has already been mentioned. Yes, big leads can evaporate theoretically, but since Apple has NEVER had a big lead before, it’s not like they’ve blown any of them yet before obviously. Let’s give Jobs a little bit of credit here, he’s not stupid and he won’t “blow the lead” in this competition I don’t believe.
We’re talking Mac vs Windows compared to today here, not the Apple II vs DOS. The Mac never had an advantage ever, not in 1984 or at any other time. The iPod/iTMS is holding well over half of the market share right now, so the two situations have virtually nothing in common with each other.
What a buzzkill. These articles are getting as common as Windows worms.
Correct me if I’m wrong here, but that 10% included, presumably, computers running MS-DOS, right? And could those machines that ran MS-DOS run the first version of Windows? Meaning, could users just upgrade to Windows on computers they already had, or did they have to make an OS *and* hardware investment to run Windows? And then could any of the apps they had on MS-DOS run under Windows? The question here is how much easier was the upgrade path from MS-DOS to Windows vs. MS-DOS to Apple at the time, and also what kind of lead the Mac OS had on *Windows* at the beginning. I’m thinking that 10% might be a little misleading…
Facts – multiple proprietary music formats emerging (no industry standard).
Apple closes its technology rather than licensing it while it has the power and leverage to rule the world (like the Mac).
The songs you today buy may not transfer to the next generation music player you own in the future.
Fact: DRM is an unfortunate reality due to the record labels. When you hold the contracts to 99% of artists’ souls out there, you can dictate that online downloads are going to be tethered with DRM.
No consumer likes the idea of DRM, but what’s strange are the complainers who somehow think Apple has the power to make or break DRM. IT DOESN’T.
At least not yet. That’s what the whole online battle is about. iTMS is now 2% of the entire worldwide music market (including CD sales). But what happens when Apple get to 10, 15, or 20% of all music sales? What happens when Apple starts selling a BILLION songs a year?
That’s when you get major artists who decide selling their souls to the labels is no longer something to do in polite company, and they sign directly with Apple, with their own contracts, and it’ll be UP TO THE ARTISTS to decide whether to tether their music with DRM. Or maybe then, Apple will have the power to say “No” to DRM.
But it’s ridiculous to hear people talk as if big, bad Apple were somehow responsible for the DRM on iTunes downloads….