“With its hip new ads and even hipper marketing deal with mega rock band U2, the iPod has revived Apple Computer Inc.’s image as a cutting-edge company. Shares of Apple have nearly tripled this year, and the iPod has captured nearly 90 percent of the market for portable hard-disk music players. The device, introduced three years ago, and its offspring, the iPod mini – the slimmer, lighter player that had its debut this year – are icons,” Wendy Tanaka writes for The Philadelphia Inquirer.
Tanaka writes, “The word iPod ‘is a generic noun for a portable music player,’ said Michael McGuire, research director for media at GartnerG2, a technology research company in Stamford, Conn. But is Apple playing the same old song, teasing investors yet again with a sizzling product that in the end will provide it with only a temporary boost? Perhaps.”
Tanaka writes, “It’s a familiar story for Apple watchers. Creating innovative technologies and high-quality products that lead the industry has been a hallmark of the Silicon Valley company, but it is equally famous for failing to maintain momentum. Some examples: Apple produced one of the first personal digital assistants, the Newton, which disappeared after the smaller Palm Pilot and Microsoft-based Pocket PC devices appeared. It revived itself with colorful, bubble-shaped iMacs in the late 1990s, but they produced only a small upward blip in market share that has since subsided.”
Tanaka writes, “Now, Dell Inc., Rio Audio and others are nipping at Apple’s heels with their own digital music players, and analysts do not expect Apple to hang onto its enormous lead in that market forever.”
“Still, at least some believe that this time may be different – that the iPod frenzy will drive sales of Apple’s computers because the device works more seamlessly with Apple’s own products. ‘We believe that fiscal year 2005 could mark the year when… the iPod story ‘hands off’ to the Mac story,’ Benjamin Reitzes of UBS Investment Research said in a recent report,” Tanaka writes. “Another difference this time, some note, has been Apple’s willingness to make the iPod play well with Windows products. The company released versions of the player and its associated software, iTunes, for Windows computers, and made its online music-downloading store available to all computer users, not just its own customers.”
Tanaka writes, “It also forged partnerships with a variety of companies, including Hewlett-Packard Co., BMW Group, and Motorola Inc., to get the iPod into different areas of the marketplace quickly. HP, for instance, is reselling an HP-branded version of the iPod. Roger Kay, a vice president at IDC, a technology research company in Framingham, Mass., said the iPod should allow Apple to drill down on the consumer market like never before. Kay expects the company to announce more iPod-related products, including possibly an iPod video player, next year. ‘The one play they’ve got is the consumer,’ Kay said. ‘Consumers represent the wild card for Apple.'”
Full article here.