“Apple Computer announced Tuesday the expansion of its well-received iTunes Music Store to nine additional European Union countries. The European version of the online store has been available in the UK, France and Germany since June. In addition, Apple said that a Canadian version of iTunes Music Store will launch sometime in November,” Robyn Weisman reports for CIO Today.
“‘Apple is probably further ahead than most, but it’s not like they can go take a nap,’ Gartner G2 media team research director Mike McGuire told NewsFactor. Each one of the new markets has its own set of genres, artists and so forth that require local expertise to program and stock. Apple still has to execute well, as a business, to make sure it is meeting those expectations, McGuire said,’ Weisman reports. “‘Honestly, I can’t tell why Apple is succeeding [while] their competitors just don’t have anything close,’ McGuire continued.”
Full article here.
MacDailyNews Take: McGuire said, “Apple is probably further ahead than most.” Yeah, you could say that since Apple has over 70% of the legal online music download market. Is McGuire vying for “Analyst Understatement of the Year” here or what?
McGuire said, “Honestly, I can’t tell why Apple is succeeding [while] their competitors just don’t have anything close.” All you have to do is use an iPod with iTunes and then try to use any other store/jukebox/player combination and it’s clear why Apple is succeeding. Apple is the only company that controls the whole widget besides Sony (and their solution is just too late, too complex, too proprietary, too uncool, too ugly, and just plain not as good as Apple’s). That’s why Apple’s iPod+iTunes is a better experience and, come to think of it, why Macintosh works so much better than the cobbled-together Wintel hegemony that produces commodity consumer-grade Windows PCs.
Rule of thumb, Apple rules, Window$$$ sucks, end of story.
“Honestly, I can’t tell why Apple’s iPod+iTunes is succeeding while their competitors just don’t have anything close”
Huh??? I think he just answered his own question. Apple is succeeding while the others aren’t because they don’t have anything that comes close to what Apple offers. Duh…
To be fair to the guy (he may not get it but he’s trying…) from Gartner, he also wrote this which showed up in the NewsFactor article:
“”It’s hard to explain, other than to say that just because all these other competitors have great technology and have licensed the same content, doesn’t mean they have any clue as to how to get people to come to their stores,” said McGuire.
“I’d really have to chalk it up to the fact they think they’re still just selling technology. They aren’t,” McGuire said.
“Apple understands what they are really selling — and it ain’t just pieces of plastic and metal.”
Hmmmm. Apple understands something that the competition doesn’t? Maybe that’s why Apple has 70% and 90% of the download and HD portable music player markets, respectively, and others don’t.
Kudos to Jobs and company for the discipline needed to keep on track, and the moxie to make cool stuff that users like.
You know, that Rio Carbon has neat specs. I won’t buy one because: 1) not cool, 2) not compatible, 3) not different/better enough to make the switch.
Tera Patricks
Mac360.com
I used Windows up until 2002. Then I got an iMac with Mac OS X. I used to make fun of the Mac. What a stupid, ignorant idiot I was – I must admit.
Windows sucks so bad compared to Mac OS X, it’s like comparing an old horse bound for the glue factory to Secretariat.
I look back at my years of using Windows as my “lost personal computing years.” Thank God I switched to Mac – I just wish I did it 8 years sooner!
before you rip on McGuire – here is his follow-up statement ti his hypothetical:
“I’d really have to chalk it up to the fact they think they’re still just selling technology. They aren’t,” McGuire said.
“Apple understands what they are really selling — and it ain’t just pieces of plastic and metal.”
he recognizes what Apple is doing correctly and why the others are falling flat. Apple gets it. period.
The reason is the same reason people use Windows. Apple has a music solution that no one has topped or is so far better that a user wants to switch. There is no reason to switch to another music player or software when the one they use works. (now we all know that is not the case with windows today but that is another post). Unlike Wndows, Itunes is free. If Mac OS was free and ran on Intel then the adoption would be worth the change.
One year free upgrade to OS X. What sort of market share would Apple get then?
There is more to this story than simple statistics�
Apple Computer is now in the process of defining its third major product family since the formation of company in the mid-Seventies.
First came the Apple II, arguably the first mainstream personal computer for public consumption, then � nearly ten years later � came the Macintosh which bought the mouse-driven graphical user interface to the marketplace (admittedly after Xerox had spent years and millions developing the ideas, but with no real concept of how to bring them to market).
It is a matter of record that Apple � under one of the many management teams which marked the time between the ignominious (and yet necessary) ousting of Steve Jobs and his subsequent triumphant return to the helm � declined an offer from Bill Gates which would have seen Microsoft manage the licensing program for the Macintosh operating system as opposed to creating the Windows environment that we all know and love.
People still argue as to whether this was a mistake or not: did Apple Computer seal its fate as the permanent bridesmaid of the IT world by an act of hubris or did the company choose an alternative path, that freed it from meeting the latent needs of billions of computer users around the world and instead enabled the company to maintain a position of technological leadership by leveraging an elegant hardware development strategy of which it was the sole master.
And now � with iTunes and iPod � the licensing question has returned like a ghost hovering at the feast.
contd�
So what should Apple do? Open iPod to every format under the sun? Allow music stores other than Apple’s own iTunes Music Store to sell music for the iPod? Or should it repeat the “mistake” and keep the iPod to itself?
Of course, the problem with these questions is that � for the most part � the people who are challenging Apple to ‘open’ its music products are missing the fact that � from the mainstream viewpoint � the platform is already more than open enough for most people’s needs.
This opinion is based on one simple fact: the people who are currently buying iPods (and other digital music players) are largely people who have ‘mature’ music collections and these people are unlikely to pay to replace their existing physical libraries with the online equivalent that arguably has less value simply because there are no liner notes, lyrics or photos.
So if you already have a significant music collection, what you really need is a solution that genuinely allows you to use your music wherever or whenever you choose and, like it or not, Apple’s single-minded pursuit of an integrated vision based around iTunes delivers that solution with encoding, managing, and burning managed within a single application.
Those lobbying for change � either because they’re part of the opposition or paid-up (or worse, paid-for) members of the Microsoft fan club � simply don’t understand the game that’s being played: Complaining about the iPod not being open for ‘virtual’ music sales will only be important when the intangible product begins to challenge the physical CD not just on a year-by-year market share basis, but also in terms of cumulative tracks ‘installed’ on people’s personal computers. Right now, the core issue is about who has the most elegant solution for managing the vast ocean of CDs � collected over twenty years � in the real world, rather than the management of ‘virtual’ collections which will take the remainder of the decade to become a globally ubiquitous format with critical mass.
contd�
Apple know that this is the truth. They’re the market leader in ‘virtual’ downloads (with around 70% of the market) and yet it took them 535 days to sell 150 million tracks from iTunes Music Store.
Put this in perspective: 150 million tracks equates to around 12.5 million albums (or over 23,000 albums per day) and has generated around $145 million of income for Apple Computer, compared to a global music industry which � despite all of the doom and gloom � is still worth around $32 billion annually. In other words, Apple’s total share of the global pie is less than a half of one percentage point and Apple’s share of the market is around six times that of its nearest competitor.
Quite simply, focussing on ‘virtual’ is a woeful piece of distraction when the physical market is around 99 times larger at the moment.
So, if you believe my point of view (and I can back up all of the statistics here), why is there so much sound and fury about Apple’s allegedly unfair tactics in keeping the iPod closed to competitive music stores?
Well, I suspect the truth is that companies like Real Networks and Napster are basing their entire future on digital music downloads; indeed, Napster’s parent (Roxio) recently divested itself of its CD and DVD burning products in order to generate cash to keep Napster alive. When you’ve bet a significant amount of your shareholders’ money on a business plan which is starting to look a little shaky, you start to look around for excuses that’ll hold up when the time comes to explain yourself and this is where blaming Apple comes into the story.
At best, the digital download companies are making between 5� and 10� net for each track after they’ve paid for marketing, credit card fees, infrastructure and everything else, and probably around 20� gross. So the belief goes that if Apple opens up the iPod party to all-comers, everyone will get an even share of the six million tracks that are now being downloaded each week which means that � if you’re lucky � you’ll get a share of around $450,000 profit.
However, the problem for the under-funded also-ran players in the business (and I’m including practically everyone in that category, bar Apple, Sony and Microsoft) is that there are too many players for such meagre pickings to make a viable business, so � sooner or later � the weaker members of the herd will start to be die off.
This is the problem with a commodity market: Nearly every store is selling the same product and they’re nearly all selling at the same price, so the ‘choice’ that Microsoft promotes in its ‘Plays for Sure’ initiative benefits no-one except Microsoft as there is no incentive for the consumer to develop loyalty to a given store.
Apple’s benign dictatorship over iTunes and iPod is actually of benefit to everyone: the consumer benefits from a coherent approach to both hardware and software which results in a positive experience; the record companies and artists are benefitting from seeing their products promoted in a fair and balanced way. Last, but not least, Apple benefits from creating a ‘halo’ product that shows off the quality of its holistic approach to engineering.
So maybe there is a reason why Apple should keep its secrets to itself, and maybe the rest of the industry should consider the needs of the customer if it ultimately wants to address the needs of shareholders.
MCCFR:
Spot on. Want a job as an analyst? Opps. Sorry, that would be a step down wouldn’t it.
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Wow, MCCFR! That was as well put an explaination behind iTunes+iPod’s success as I have ever heard. Bravo!
Another reason is that it’s Apple. People like the Apple brand, but it’s not normally something they can buy into. Thay need (or think they need) a windows PC to be compatilble woth work and the internet, so they go with that, even though they would prefer a mac. With the iPod, they get a little piece Apple with nothing so compilcated as switching platforms
None of the other brands of player are known outside the tech world other than Sony, whic screwed up with the whole ATRAC nonsense (nothing wrong with pushing ATRAC, but it needed MP3 as well, and decent storage (HD) rather than trying to push Minidisc).
A I think really the only tech company that could have pushed a player was microsoft, simply because of the name. They’re tying their name to unknown brands though, and people don’t want unknown brands.
Even Toshiba is not really known for quality audio, so theirs will fail.
Had Microsoft managed to get say Technics or Philips or Sony or Aiwa on board and in the right stores (audio stores, not computer stores), then they might have stood a chance.
It might be time for Apple to find a new partner to spread the net even wider. It should be an audio company, or maybe a mobile phone company that has good brand value. I know there’s been mention of Motorola, but Nokia would be even better. Allow fairplay on those phones, but stipulate in the license to them that it’s for devices that hold a maximum of 500 songs or something like that.
It would also be nice to allow soundbridge to use fairplay. Or to license airtunes.
They either need to license airtunes, or make some dedicated devices (with remotes and displays).
And icePod would be good too. iPod in your car with a display and column control.
Now I have almost no doubt that all of these suggestions are being mulled over at Apple right now. There are strategies for exactly when the market is ready for this stuff and they’ll release stuff when they’re good and ready.
Read most of the ‘Apple should’ above as “I’d like”. If enough people would like this stuff, it’ll happen. I’m just getting a little impatient for it.
Go Apple !
username,
It’s supposed to be “Apple rules, Window$$$ drools”
RePlay/Scorp_56�
Thank you for your positive feedback.
I have to admit it was a blog article that I’d already written for the music conversion site that I’m putting togther, but it seemed like an appropriate outlet.
Yeah. That was good. Thanks MCCFR.
Regardless, well thought out and written, MCCFR.
Gartner analysts blow. They’re too arrogant to actually be effective.
MDN are just being MDN right now.When hes says”apple is probably further ahead than most”,just take it!I think thats a half compliment,and wouldn’t go crazy because he said that.Plus,how do you know he mean’t by marketshare?He could’ve mean’t by thinking or product appeal and design.
You do that in other articles and it’s kind of stupid.
MCCFR: You is da man!!!!
Well thoughtout. Arranged in a logical manner that anyone can follow through.
>> Analyst: ‘Honestly, I can’t tell why Apple’s iPod+iTunes is succeeding while their competitors just don’t have anything close’
Your honesty is refreshing. Most analysts would attempt to blow smoke up our asses and try to seem smart while those of us in the know see their ignorance clearly.
My observation is that the iTunes Music Store is a silky smooth experience. The music comes much faster and more reliably than it does from P2P networks. You’d have to viscerally hate the artist to prefer stealing their music at a snail’s pace rather than buy it a supersonic speed. (I might steal and redistribute Ashlee Simpson’s stuff after the lip-sync/blame the band/blame acid reflux scandal just to stick it to her and scumbags who force crap like that down our throats.)
But, seriously, folks, the downloads from iTMS come at faster speed than most other downloaded files of the same size.
Admittedly, I haven’t been to the other paid sites because my iPod doesn’t play WMA, thank God. I’ll bet the real iTMS experience is head and shoulders better than the competitors. To me, that’s the real reason Apple isn’t licensing FairPlay — giving iPod owners the chance to use crappy alternatives to get music will just ruin the whole utopian experience we currently have.
must be a conspiracy.. why are they the market leader in each of the markets..
what was it? 85 million iTunes downloads..?? Wowza!
LOL remember guys.. you need Broadband to get the new U2 Digital Box Set? LMAO..
Funny how they call it a box set..
But I digress.. the ITMS emulates the Mac experience.. and that is attractive to people.. people who are not lied to by idiotic sales staff around the world in BestBuy, Future Shop, etc.
most people are making decisions based on 1987 information about Mac software and power levels.. incredible..
I sometimes wonder if there’s another reason why the iPod/ iTMS combination is so successful and again there might be a parallel to be drawn with the history of Mac / PC.
Many people bought PCs because that’s what they saw their friends using. I suspect that many are buying iPods for the same reason.
If that’s the case, there doesn’t seem to be any reason why Apple shouldn’t continue to lead the pack and it’s another reason why Microsoft’s efforts will be an uphill struggle.
My only suggestion to Apple is to allow selected manufacturers to licence the AAC/Fairplay format for other players and WiFi streaming etc.
There will always be customers who’s precise needs aren’t met by one of the iPods. It’s better that their needs are met by something that works with iTMS, than by something that works for Microsoft.
One major problem is that the competitors are all based using IE to get to the music store.
That already puts it behind Apple who designed entire software from scratch to make the user experience better.
He can’t tell? Who’s the idiot who pays this guy to be an analyst? Becuase he’s not getting his money’s worth!
This just in:
First Grader doesn’t get why we haven’t come up with a Unified Field Theory for physics!
Never send a child (or a fool) do do a grown-up’s job.