Analyst: With iPod, Apple’s ‘willing to do whatever it takes to maintain their market dominance’

“Apple Computer played a new tune Wednesday with its wildly popular iPod digital music player, cutting prices and adding more storage and features. The iPod mini got mightier as the original 4-gigabyte model, which holds about 1,000 songs, dropped $50 to $199. Apple introduced a 6-gigabyte (1,500 songs) model for $249 and more than doubled the battery life. The iPod photo, which displays digital photos on a color screen and plays music, dropped to $449 from $599 for a 60-gigabyte model (15,000 songs). And a new 30-gigabyte model (7,500 songs) will sell for $349,” Dave Gussow reports for The St. Petersburg Times.

“All of this is for a device that dominates the digital music sector, with about 90 percent of the hard drive market. Experts say it was an effort by Apple to put more heat on the competition,” Gussow reports. “‘They’re willing to do whatever it takes to maintain their market dominance,’ said Stephen Baker, an analyst with the NPD Techworld research firm.

“‘We’ve done very well, but we’re not resting on our laurels,’ Greg Joswiak, Apple’s vice president of hardware product marketing, told the Associated Press. ‘And we’re going to continue to be very aggressive in this market.’ The company is benefiting from what analysts have dubbed the ‘iPod halo effect.’ Sales of the iPod are spurring orders of other Apple products,” Gussow reports. “Eliot van Buskirk, senior editor at MP3.com, says other companies are trying to mimic Apple’s stylish device and its easy-to-use software. But no one has come close. ‘Everybody’s trying to catch up and they just have not stumbled,’ van Buskirk said. ‘If Apple had a weakness, it was price. And they shored that up.'”

Full article here.

28 Comments

  1. These are killer moves by Apple. Absolutely killer, from a market-dominating perspective. As for the whole “firewire cable” issue, I think it’s one of those things that’s going to be forgotten about by this time next year. iPod’s may all have some form of wireless connectivity by then, making the whole issue moot.

    And there’s no way — NO WAY — that firewire is going to lose out on the high-end (video, etc.). It’s just too fast and has too much headroom to grow.

    That being said, as Drool Tunes mentioned I think I too will buy back into AAPL when the post-split stock price begins trading! To the moon, baby!

  2. While I think Apple is the leader…I don’t think they’re invincible.

    The “digital” music industry is still very young. And the next big wave needs to be dealt with well. The next wave you ask? It’s definitely going to be a convergence of music/video onto your cell phone/PDA.

    As things get smaller and more powerful – the battle will be over who wins the format war in this space.

    Sure the iPods will dominate for the next year or two…but soon your typical cell phone will transform into your music player/PDA/game player, etc… there are already signs.

    And wouldn’t you rather carry around 1 item as opposed to several gadgets?

  3. And did anyone see the article in GCN (Government Computer News)? They called OS X “easy to use, powerful and secure”. Wow. Microsoft must be reeling!

    I agree with you Mr. Bill about the big picture, but I have confidence that Steve will not take his eye off the ball — nor will he permit anyone else too. In fact, it seems that — for the last few years at least — Apple has always been one, if not two, steps ahead of the entire market. I’ve no doubt that strategic thinking is going on daily at One Infinite Loop. The beautiful subterfuge known as the Mac mini is the latest example (media server, anyone?).

    I look forward to when Tiger hits — and I hope for a big marketing push for the OS at that time.

  4. I agree with Bill, as much as I would love to see Apple be the Coca Cola of music,
    It is early days in the digital music market and there is an inordinate amount of pressure on companies to take their share of the pie. The one that seems more likely to take another stab at it is Creative Technology. It has the blessing of MS and the continent of Asia as its target population. They have a reliable altho unsightly and uncool product but the Chinese have been in the marketing business a couple of thousand years longer than us. 90% of less than 1% of thei worlds population is not world domination.
    I would love my phone to replace my car keys as well.

  5. Mr. Bill, I’m not sure if I agree with you. Part of the iPod appeal is its simplicity. It does one thing really well…it plays your music (and now shows your photos). But if you start having this bloated thing that also takes pics, is a cell phone, plays video, is a pda etc… it becomes complicated. More menu buttons to push to get to what you want, more to learn, more to sync etc.

    Just because features can be put on it, does it mean it should? The video/music player offered by Creative (I think) hasn’t been flying off the shelves.

  6. doPi: “90% of less than 1% of thei worlds population is not world domination.”

    No, but it’s the most important part to win first — because it’s also the place where most of the media used on the iPod’s is created. And it’s the country that (currently) drives much of the world’s trends.

    And also, it’s a helluva good start!

  7. Simply put, a Phone/PDC/MP3 player/Recorder/AMFM Radio/Photo viewer/Camera/Movie player do all device will not beat out the iPod.

    An device that does one main task very well will always win out over a Swiss Army Knife solution.

  8. And it’s the country that (currently) drives much of the world’s trends.

    I assume that’s a joke. How Americentric can you get?

    America does NOT drive much of the world’s trends.

  9. Apple will need to change its advertising. The current iPod commercials are getting old like the old “Where’s the Beef” Wendy’s commercials.

    iPods are hot. Stop the iPod commercials and start the OS X and Mac commercials.

  10. atomic flower,

    How can you say that?

    Here’s just one example.

    Almost 50% of Americans hated George Bush long before the rest of the world hated him.

    How can you say Americans don’t start trends?

  11. an article somewhere on the net stated that the next xbox will not include a harddrive. If a user wants a memory card/harddrive, they will need to purchase a $100 add-on, which will incidentally also be an mp3 player. Microsoft would probably sell this at a loss, and at $100, a lot of xbox owners would probably buy it and those that don’t own an xbox might buy it as well. Not to say that Microsoft can compete with Apple on usability and style, but it doesn’t take much imagination to see them finding some sneaky way back into the mp3 war.

  12. Low blow, Al, 22-1/2% of Americans don’t know where the rest of the world is.
    MacMini_01

    I thought America was the world. They are the “World Police” ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

  13. Sorry Mr. Bill, I just don’t accept the 15-year old conventional wisdom that there will “definitely” be this great convergence of all existing appliances, especially into one tiny device like today’s cellphone, and particularly where video is conerned. I think Jobs nailed it when he said (and I’m paraphrasing badly here) that on a fundamental level music works on a small device because you are still able to fill the entire “aural landscape”, and receive the full aesthetic experience of the art. Conversely, it is impossible to occupy the full “video landscape” with little cellphone screens and because of this I just don’t believe what you’re describing will ever be anywhere near as big a “wave”.

    And then there’s the problem with having multi-purpose machines with all kinds of buttons and knobs, and modes and menus and sub-menus that purport to do everything, for those who can figure out and remember how to do so, and that do no one thing particularly well. Do these kitchen-sink appliances ever really catch on? Besides perhaps the Swiss Army Knife, are there ANY truly successful and enduring examples? Like PeterJ, I think part of the iPod’s success is a result of being the antithesis of just that.

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