“To hear the media tell it, everyone has an iPod, and if they don’t already have one, they’re soon going to get one. But the fact is not everyone does. Not even by a long shot,” Arik Hesseldahl writes for Forbes. “According to the Consumer Electronics Association, the outfit that put on the International Consumer Electronics Show earlier this month, household penetration of MP3 players–not just iPods but all brands–in the U.S. runs about 15%.”
Hesseldahl writes, “And while Apple still has the edge on quality–I’ve tried out about a dozen different MP3 players, and the iPod is far superior to everything else out there–that case won’t always be so clear. Other manufacturers are learning from Apple’s technology tricks and trying to improve upon them while undercutting on price. This means in time Apple’s iPod profits will be vulnerable.”
“Sure Apple can innovate by adding features like video and maybe wireless connectivity. But even for a company as innovative as Apple, that well can run dry, leaving it to compete on price alone. That’s a scary thought when you consider that 34% of Apple’s revenue last quarter was derived from iPod sales. A sudden, unexpected shift in consumer tastes–they are a fickle bunch after all–could feel like a nasty punch in the nose,” Hesseldahl writes. “I don’t mean to sound bearish about Apple or about the iPod. But as good as Apple’s latest results were, I’ve started to wonder how long the iPod miracle can last. Nothing this good can last forever.”
Full article here.