“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.
Blah, Blah, Blah…
Why do so many people always want to predict the demise of Apple and itsd blunders. If anyone deserves to have their blunders publicly announced it is MicroSchrott (Schrott = grabage/scrap ie scrapyard). No other company has lead its users around by the nose as badly as they have. They are as bad as the pharmaceutucals, getting you hooked on “legal” drugs, and then not caring how you cope with the problem.
Making a hat trick of first post. Gee I should read my horrorscope today.
sorry Road warrior
I’m getting a little tired of the press questioning whether Apple is going to “fail” with any particular product. Maybe it is the mentality of the buying public that has “failed”. We Mac users know why we keep buying Macs and Mac products. The iPod dominates the market, yet this clown sees Dell and Rio “nipping at the heels” and that the the iPod may ultimately “fail”. Pierre’s Hamburger Palace may make the best hamburger in world, but MacDonald’s is going to sell a lot more. Pierre’s may have all the business they can handle in 10 locations, but does that make them a failure because McDonald’s sells tens of millions more a year at thousands of locations?
There are a lot of factors that influence how a product fares in the marketplace. Maintaing momentum is not always something that is within the control of a company.
I guess in the end it boils down to this: is something a failure because someone else can copy it on the cheap and sell a larger quantity of an inferior copy?
‘The one play they’ve got is the consumer,’ Kay said. ‘Consumers represent the wild card for Apple.'”
Hello, Kay? I’ve got news for you. It’s always about ‘The Consumer�’. Economics 101: If people don’t spend money on a company’s stuff, the company will go out of business.
Right now, Apple has something that a LOT of people want and they are spending money on it. This lovely little device is giving those same people a taste of Apple products and many of them will want to experience more Apple products. An excellent parable on this subject can be found in the upper-left corner of this page. The parable is called, ‘The Perfect Chocolate’, and it’s listed under “Opinion Archive: November 2004.”
Maybe this will help put the longer-term prospects for Apple into perspective for you.
Dang, oh well that’s life, next article please.
It is a reasonable question to ask if marketshare and dominance is what he thinks is most important. Frankly, it has always just seemed so simple to me– Apple has cared about a quality user experience. Period.
I find it so funny that people are always talking about marketshare as if it, in itself, somehow explains how good something is. Think past American cars, “quality” McDonalds food, clothes from BangladeshsrilankaPakistan-a-China-ville. Hopefully quality now means more than “thrift,” but if not– so?
As long as the products are good and there remains a market large enough to maintain Apple’s production of them, who really cares (unless you’re after the money)?
That’s cool ph8te, after all two first posts in one day makes me happy. This guy reminds me of those “Apple doomed to die pundits”. I guess time will tell if they are going extinct (my opinion) or simply hibernating.
Interesting point about apple and failure above. Arguably Apple losing to MS Windows was the most famous business failure of all time. And that association is proving very difficult to shrug off. Perhaps Jobs’ second coming should have been to create a newco and call it Pear, or Mango or Peach or… and then no-one would be saying “anyday now Apple will fail again. Cos we’ve seen it all before…”
R, you may find this interesting
America has its share of early adopters, but they tend to be the exception rather than the rule; the average U.S. electronics consumer is driven more by cost and value than by features and technological sophistication.
“We’re much more Wal-Mart,” says Carnegie-Mellon’s David J. Farber ruefully. “We buy our electronics from big-box stores where the salespeople know nothing about what they’re selling — they know how to swipe a credit card, and that’s it.”
ASIAN POP The Gadget Gap
Why does all the cool stuff come out in Asia first?
http://www.sfgate.com/cgi-bin/article.cgi?file=/gate/archive/2004/12/09/gadgetgap.DTL
Also:
“The way business works here is simple,” says David J. Farber. “In America, if you have a potential product, you do research, you try to figure out the size of the potential market. And if it’s a totally new, totally innovative thing, where no one has any idea of the size of the market, and there’s no guaranteed return on a large investment, well, forget it. No American company will touch it. In Japan, it’s usually quite the opposite: manufacturers know that the home market loves new stuff; they’ll take risks there, hoping that something will catch fire and take off. The only U.S. company that’s doing that is Apple, and, honestly, I don’t think that even Steve Jobs, in all of his infinite wisdom, thought that the iPod was going to take off the way it has.”
Macintosh sales may increase due to the iPod — what has been called the “halo effect” — but the iPod won’t do it alone. There have been many studies indicating that the Mac is cheaper in total cost of ownership, but Apple’s prices have been falling in recent years to the point where people will pamper their need for fashion and flash. Fashion is where the iPod comes in. Through it and iTunes, Windows users will get a taste of Apple’s design and quality (and realize that there’s more to it than pure fashion and flash). The big consideration, though, is security. Windows has been absolutely hammered the past two years by malware of all sorts. That will give consumers a big push when considering their next computer. Of lesser note, although equally important, is OS X’s Unix under the hood. That has opened a flood gate of new software, and new possibilities for scientists, engineers and IT geeks.
It’s a fortuitous collection of factors. Apple’s time may have finally arrived.
Oh yes, I forgot to mention the Apple stores. I’m sure that’s done a lot to get Apple hardware in front of consumers who have never seen it before — including sales people who actually know what they’re talking about.
“the iPod frenzy will drive sales of Apple’s computers because the device works more seamlessly with Apple’s own products.”
I use a PC with my iPod and iTunes and honestly I don’t know how it could be much easier with a Mac (though I’d like to own one just to find out). I click on a song or album in the music store to download it, plug my iPod in the dock, it syncs and that’s it. How could it be easier?
fandango.. well even if they’re talking about Oracle drooling over Apple Xserves or the Educational Contracts for iBooks… somehow.. the only play they’ve got is the Consumer..
Pfffft…
Welcome to Perception is Reality Theatre brought to you by ignorant PC Journalists
I use a PC with my iPod and iTunes and honestly I don’t know how it could be much easier with a Mac (though I’d like to own one just to find out). I click on a song or album in the music store to download it, plug my iPod in the dock, it syncs and that’s it. How could it be easier?
The same concept flows through into OSX.
thoeme,
This is how it could be easier.
Remember all that time you spent downloading XP updates and anti-virus updates and spyware updates in the last few months? Remember all that time you spent scanning for and removing viruses, worms, trojans, and spyware each week? Remember all the time you spent trying to get this program to work or that piece of hardware to be recognized by the OS? Remember how hard it was to edit a movie or play a slide show with music or burn a CD or DVD or create a web page?
Well with a Mac you wouldn’t have wasted all of that time or had any trouble with those tasks. Even if you were able to complete those tasks fairly easily, you wouldn’t have had near as much fun as you would have had if you had used a Mac. In addition, your finished project would probably have looked a lot better if it was Made on a Mac.
How do I know? I use both platforms every day.
so, when do some mac sales figures come out?
and when they do of course don’t forget to discount institutional sales. We are talking about the halo effect after all.
Joe, here they are. Apple’s net income almost doubled (June to September). Should mean they are selling a lot more.
http://finance.yahoo.com/q/is?s=aapl
Also, from same sources, annual income applicable to stocks progression from 2002 to 2004 has been phenomenal:
$65,000,000 – $69,000,000 – $276,000,000
Revenues on 2004 is some $2Billions more than in 2003
PS
All numbers in the above link is in thousands. So when you see $100,000 it means $100,000,000
PPS
I agree with pundit idiots: with these numbers any business would be doomed. LOL.
thoeme: I deal daily with lots of switchers at the lab. They had the same question before “it works on Windows, what do you mean it is better on OS X? If it works it works, right?”. They all have their answers.
Recently I have been very successful with this mental image that sticks very easily and it is easily grasped.
Think of carts at a mall. After all, they are all the same right? you pick one, you go through the aisles, you fill them up, you go to cashier, you unload.
Basically they all do the same thing, right? Well, you should all know how false is that. Ever used one that is brand new? It is oiled, easily pushed the way you want. You effortlessly drive it practically with a finger, on the aisle you let it go it stops always after a yard going straight, right where you want it when you want it. It always goes exactly where you need it to go. What it has done? Just the above: went through the aisles, got filled, carried your grocery to the cashier. End of story.
Now, you know you had it before, you pick the wrong one. This seems to have a mind of its own. It squeaks all along, can’t go straight and you have to push with all your weight on one side just to have it go. It never wants to turn properly and you always have to watch for its tendency to veer abruptly the wrong way in the wrong moment. You push hard, you fight all along with it and when finally you are at the cashier you are worn out. You can’t wait to unload it and put it to rest.
What it has done? Just the above: went through the aisle, got filled, carried your grocery to the cashier. End of story.
Mac, PC, end of story.
PS
I find this analogy much better than the BMW vs Kia one and more easily understood.
Her point is that M$ has Orifice and Apple has iTunes/iPod — both tend to drive users towards a platform: business users to Windoze; consumers to Apple.
and analysts do not expect Apple to hang onto its enormous lead in that market forever is straight reporting, even if the analysts are clueless.
Wendy, about that date tomorrow night….
U2 hip?! – give me a break! – those guys are rock dinosaurs …