Digital competitors are ready to take bite out of Apple. “That is the message to Apple Computer CEO Steve Jobs from almost every other company in the digital music space vying for consumer attention after several years of domination by the iPod and iTunes,” The Arab Times reports. “Apple’s successful combination of sexy design and elegant usability has propelled the iPod to the top of the digital music market as the undisputed king.”
“Every move Apple makes these days results in victory. As the rest of the flash-player market floundered, Apple took over the category in a day with the release of the iPod Shuffle. It turned podcasting from a cool-sounding technology that nobody used to a legitimate format by adding it to the new version of iTunes — and generating 2 million subscriptions in less than a week,” The Arab Times reports. “Today, Apple commands 80 percent of the MP3 player market and 75 percent of online music sales. But even as analysts predict another massive holiday sales season for the company this year, many believe Apple’s reign will last only another 12-18 months before the playing field levels out. ‘It’s inevitable that over time their market share declines,’ Piper Jaffray senior research analyst Gene Munster says. ‘It’s safe to say that nobody can sustain an 80 percent market share in a consumer electronics business for more than two or three years. It’s pretty much impossible.'”
“Privately, record company executives say they can’t wait. Not because they want to see Apple stumble, but because a less dominant Apple means a more robust market for digital music. The company by itself cannot bring digital music to account for 25 percent of all music sales, as labels hope it will by 2009,” The Arab Times reports. “Label sources say Apple stubbornly disregards their suggestions for drawing in new digital music customers. They say they would like more flexibility on track pricing and promotions. But more than anything, labels want to see the iPod become interoperable with music services other than iTunes. ‘It’s a monologue with them,’ one label executive who asked not to be identified says. ‘They pretty much say, ‘This is what we want to do,’ and if you disagree with them you’re an idiot. It’s like dealing with a cult.'”
Full article here.
The “monologue” and “cult” comments come directly from the standard anti-Apple talking points memo that’s been circulating for years. That’s about as creative as music label executives can get, which should tell you that they ought to listen to Apple’s “monologue” for as long as they can. Apple showed them the way, yet inexplicably, some of these music executives can’t wait to bend over and grab their ankles for Microsoft. Why?
Most likely, the music label execs are trying to knock Apple down a peg or two or three and split the online market up between multiple successful distribution points. After all, if Apple ends up owning the online market with iTunes Music Store, who would need the labels? Apple could buy The Beatles’ pesky Apple Corps to remove that issue and artists could eventually go straight to Apple and eliminate the middlemen. This is why the middlemen are biting Apple these days.