Amazon’s music ambitions pose no threat to Apple’s market-dominating iPod+iTunes

“Amazon.com may be jumping into the online music mosh pit, but don’t expect Apple Computer to give up the stage any time soon,” Troy Wolverton reports for TheStreet.com. “Published reports indicate that Amazon is close to launching its own digital music service that would compete with Apple’s industry-leading iTunes store. In conjunction with the move, Amazon also will apparently offer its own line of Amazon-branded digital music players that would work hand-in-hand with the service, according to the reports.”

“‘I don’t think [Amazon’s prospective store] is a threat [to Apple] at all,’ says Tim Bajarin, principal analyst with Creative Strategies, an industry research and consulting firm. ‘There are a lot of things that Amazon would have to get right for this to work.’ That’s because for the many advantages Amazon may have, its digital music store would start off with some significant obstacles. iTunes has already established itself as the leading online music provider, and Apple brands such as iTunes and the iPod music player have become strongly identified with what is hip and cool in the digital music market,” Wolverton reports. “The iTunes store had 83% of the market for U.S. digital music sales in December, according to Nielsen SoundScan data released by Apple CEO Steve Jobs last month. Apple’s various iPod lines own north of 70% of the digital music player market in the U.S.”

Full article here.

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Related article:
Amazon preps Amazon-branded music players, digital music service to rival Apple iPod+iTunes Store – February 16, 2006

31 Comments

  1. The labels can no longer exist as they once were. No duh. The distribition model has changed. No duh. By all appearances the labels gave Jobs the original deal based on their own low expectations of the iTMS having much success. Heck, Apple was a bit surprised as well at first. Funny thing is, the deal gave Apple all the upside as to power going forward. Boy are the labels sinking now. They know iTunes isn’t going to kill them by itself. It is my opinion however, that if the labels had what iTunes has they might use it to change with the times and keep themselves afloat during this massive transition. The problem from their viewpoint is that Steve’s got the lifebuoys and he ain’t handing any out.

    If any industry insiders can correct my perception I’d be happy to know better.

  2. IF/When Apple starts to slip in market share they can unleash the “podcast store”.

    Utilizing the power of GarageBand (or Pro apps) and iWeb/iLife. They could instantly provide every user (pro to beginner) a seamless way to create, record, publish & ulimatley sell through iTunes any media of your choosing (html,audio, video, music video, podcast, movie, pdf, and what not). No other company is close to providing that level of service, nor any as well positioned as Apple to impliment it on at least 53 Million existing machines (ipods + macs? (surely more)) + PC itunes users. And that is DAY ONE. And ships with every new Mac. Later make part of iLife available for PC’s…really tease them…comes with training/demo/switching to mac informational content. Every musician that isn’t already doing so will buy a Mac and sell through iTunes at the level of their choosing. Complete control over your page, like the University on iTunes program. Built and managed with iWeb.

    Now we need one more major piece…

    An accounting application
    Personal – Pro (Multiple Industry Specific Modules BTO)
    Seamless scalabilty from am to pro.
    This lets us manage our iTunes sales (and Auction Site ((iSight says what?)) finances and Apple stock. Why not do our taxes too. Quicken bites.

    MDN magic word “expect”…as in, EXPECT IT… even if they don’t lose market share!

  3. I’m still curious if Amazon will still be selling iPods after they introduce their own. On a prior thread someone noted the good relationship between Jobs & Bezos so I think they’ll continue selling iPods. What will be embarassing is when they don’t appear in the top seller’s list.

    On a side note, it should be illegal to edit Blazing Saddles — one of the best movies ever created. “Excuse me while I whip this out.”

  4. It isn’t Amazonthat’s the worry, it’s Micro$oft. They are willing to lose money for years on every device they sell to gain marketshare. Just look at the Xbox. This approach could torpedo the iPod/iTMS as the US consumer is the Walmart-brained shopping droid.

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