Apple needs to ‘reinvent’ iPod to continue market dominance

“Released in the late 1970s, the Apple II was the original sexy personal computer, the one that started the whole revolution. By the late 1980s, though, Apple had been relegated to a runner-up position by the onslaught of Microsoft’s DOS and the IBM PC clones,” Michael Stroud writes for AlwaysOn.

“One big reason why: Apple never relinquished its primary intellectual property. It maintained tight control over its operating system, hardware, and peripherals, while Gates and IBM licensed their technology to all comers. Apple’s market dominance was overwhelmed by cheaper, less inspired products,” Stroud writes. “Fast forward to 2005. The iPod dominates the digital music market. No other device is cool enough for teenagers, despite its higher price tag. Competitors are swarming. Napster, Yahoo, and Real have introduced portable music subscription standards, with phone maker Ericsson announcing a broad partnership last week. Sprint and other cellular carriers are streaming music and music videos. Nokia is loading Microsoft music software on some of its phones.”

“Meanwhile, Apple refuses to open up its product to competitive standards like Real and Windows Media,” Stroud writes. “Is Apple about to be overwhelmed again? Or has Steve Jobs learned from the past? …To keep its dominance, Apple will have to do some ballsy things, like create a portable subscription service, integrate WiFi, cellular, and video and—yes—open up the iPod to competitive standards like Windows Media and Real.”

Full article here.

MacDailyNews Take: iPod is not the Mac. Music is music and the same song can easily be encoded in AAC with FairPlay DRM for Apple’s iTunes Music Store with the click of a mouse. It’s not like writing entire complex applications for the Mac or Windows. Apple seems to be innovating the iPod well enough to continue dominating the market for the foreseeable future and rumors of new iPod features hint at more innovations to come. Unless there is are financial benefits to supporting other competing formats, Apple is doing well to keep the iPod+iTunes symbiotic relationship as it is today.


  1. These “analysts” never seem to come up with anything new. Sometimes “closed systems” dominate the market (PS 2, XBox) and sometimes they don’t. Sometimes companies have good management (Apple now) and sometimes they don’t (Apple 1985 – 2000). Sometimes a great “closed system” can be screwed by horrendous management (Apple between 1985 and 2000.)
    Up till now (three years running) nobody has come close to showing that Apple’s “closed system” won’t work. Consumers seem to realize that in many ways, Apple’s system is the most “open” system as far as they’re concerned.

  2. You can use the iPod + iTunes on Windows, Mac and Linux. Now that’s an open system. None of the competition can say that.

    He’s just repeating Microsoft’s marketing refrain. iPod users have no choice. Microsoft just doesn’t get it. When they bought an iPod the consumers made their choice. They picked the best system.

  3. ‘One big reason why: Apple never relinquished its primary intellectual property.’ Michael Stroud writes for AlwaysOn.

    I suppose this guy has never heard of the deal John Sculley made with Mafiasoft, huh?

    This guy’s a ‘tard.

    If he knew anything about Apple history, he wouldn’t be writing this kind of crap.

    MaWo: ‘nothing’. As in, that’s what he knows.

  4. Windows Media and Real “competitive standards”?

    Competitive maybe. Standards NO!

    AAC is basically the next generation mp3. They really should have called it mp4, it would have stopped some confusion. It is a standard in that it is open, and anyone can use it. Windows Media and Real formats are NOT. They are closed proprietary formats.

    The DRM attached to iTunes Music Store purchases is proprietary. But then, so is the DRM attached to any other music store.

    I hate it when people call something a “standard” when its not. Like Word files. If they were a “standard”, anyone could use them. Grr

  5. IBM did not license their hardware ip – it was copied because it was built with off the shelf parts and because microsoft would sell [licenses for] the operating system to anyone.

  6. I hope they release some new features soon. The iPods haven’t had a refresh in a while (the 20 gig is only $50 cheaper than it was 1.5 years ago and they have only added a slightly new interface: gen 3 -> 4). They have only added the Shuffle, which apparently isn’t selling very well. I’m looking forward to seeing what comes with iTunes 5 and the new line of iPods.

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