“For nearly three years, I’ve been writing that there are so many ways to win with Apple and that iTunes will displace Wal-Mart as the largest retailer of music on the planet. It looks like this will happen before the end of 2006. While Wall Street’s having a cow over Apple’s recent 20% top-line upside preannouncement and the news that it shipped 14 million iPods, the real story for Apple is truly, simply, digital downloads,” Cody Willard writes for TheStreet.com. “Apple’s just barely begun offering video downloads. It’s maybe sold 5 million video-enabled iPods thus far. So what happens when Apple’s video iPod hits critical mass? Say, when 10 million people have a video iPod? And what happens when Apple offers enough video content on iTunes that it hits critical mass? Say, 5,000 different shows and movies? And what happens when Apple’s hardware fully integrates into your living room home theater system?”
“Do you see where all this is headed? The three won’t work together incrementally. We’re looking at exponential growth. And strategically for Apple, we’re looking at de facto standardization around its video platform. Oh my,” Willard writes. “Meanwhile, of course, there’s that little business of music. Three million song downloads per day in the fourth quarter. And that was before those 14 million iPods had been opened under the Christmas tree at the end of the quarter… Finally, of course, there’s that other little business of Apple’s called computers. With the Intel platform rolled out a full five months ahead of schedule, we’re going to see some big market-share gains this year. Even getting to 5% market share for Apple would entail nearly a doubling of its computer sales. Oh my, indeed. There are just so many ways to win with Apple. I’m sticking with it.”
Full article here.
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