“As digital entertainment goes, the undisputed star in recent years has been Apple Computer’s line of iPod handheld music players. And you wouldn’t know it from all the attention the little device is getting, but dozens of outfits making rival MP3 players are trying to undo Apple’s lead,” Amy Tsao writes for BusinessWeek. “Competitors such as privately held Rio Audio of Santa Clara, Calif., which is very close to Apple headquarters, figure iPod won’t be all things to all people. It hopes to nibble away some of Apple’s dominance. Like other small players in the business, Rio has a partnership with Microsoft to use its Windows Media Audio software.”
Tsao writes, “Nonetheless, Rio faces an uphill struggle. It’s a distant second to iPod and has a fraction of Apple’s resources. ‘Our way to execute is to design the right product at the right value and then use any kind of buzz we can take advantage of,’ says Hugh Cooney, Rio’s president. In the nine months ending this September, Apple’s iPod accounted for 54.7% of total digital-music-player units sold, vs. just 8.9% for Rio. Says Stephen Baker, analyst at market research outfit NPD Group: ‘It’s tough to maintain that [low] level of market share over the long term.’ Rio’s vice-president for marketing, Dan Torres, recently spoke with BusinessWeek Online reporter Amy Tsao about his company’s plans to catch the competition.”
Following are selected excerpts:
Q: How are you competing with Apple’s iPod?
A: When we look at the entire space, Apple makes only a hard-disk player. We have a new hard-disk offering in the Carbon 5 gigabyte. It’s a little hard for us to figure out what share we’re taking from them, but we’re competing with them directly. And we’ve seen Carbon doing quite well, but it’s still way early. We need to ride this season out and see. So far, we think we’re doing quite well, and we’ll be taking share away from iPod mini.
Q: What about Dell and Microsoft?
A: Dell is about cost. They really are a follower. They drive down costs of certain things. It’s more about [whether they will] continue to drive pricing down, but they don’t really change the landscape. Microsoft is interesting. With its Windows Media Player, it will have a significant role in changing behaviors.
Q: What will happen to the market if Apple comes out with a flash-memory-based player?
A: I think there will be a combination of things. It will be interesting to see how they change their position in coming into that market. Will they go after sports, which is one of our targets? It will be an interesting addition to the market. Apple will call attention to the importance of flash. Just a year ago they had said flash is passé.
Q: But the buzz around your products isn’t even close to iPod’s. How can you change that?
A: For not having the profile of Apple, we do well in getting people’s attention. People have been looking at our product as something that finally challenges iPod. It looks different. These devices are very small, very precious. When you get them in your hand, customers really take to them. We also have things that really matter to customers, like compact size and 20 hours of battery life, which is really important in the hard-disk market. You can plug a Rio into a Windows machine, and it mounts up automatically without any extra software.
Full article here.
MacDailyNews Take: Ohhh, a Rio mounts up automatically on a Windows machine without any extra software. Amazing. Incredible. Wow. Rio thinks an Apple iPod flash “will be an interesting addition to the market.” Yeah, you could say that – it’d be really interesting for Rio’s corporate health. Note to WMA pushers: people aren’t buying it.