Apple’s iTunes Music Store dominance under attack?

“It’s no secret that Apple rules the digital music world. But does the maker of the iPod and the popular iTunes music store finally have to start worrying about tougher competition down the road? Apple has a comfortable lead in the online music market but some analysts think potential competition from Microsoft, Amazon and Google could put a dent in sales at iTunes,” Paul R. La Monica writes for CNNMoney. “Could be. In the next few months, the cable network MTV is set to unveil its own music store, dubbed Urge, in partnership with Microsoft. And Amazon.com is said to be in talks with the major music labels about developing its own digital music shop.”

“And in what might be the biggest threat of all, Google may enter the online music market. Although the company has not said anything publicly about plans for a music store, Google did launch an online video store in January,” La Monica writes. “Following that news, Bear Stearns Internet analyst Robert Peck wrote a report predicting that Google would roll out a music store, which he dubbed Google Tunes, in the next few months. There has also been speculation that Google could buy its way in to the market through a purchase of iTunes rival Napster.”

“Analysts say that Apple, which announced last month that iTunes sold its billionth download since the store’s launch in April 2003, has a safe, comfortable lead in online music for now. But the company is far from infallible,” La Monica writes. “And one media analyst said that even though music companies may be growing wary of Apple’s market lead, they still should be thankful for Apple’s presence in the market since iTunes at least allows music companies to generate real revenue from online downloads. ‘iTunes has almost single-handedly salvaged the economics of the music companies by giving users a legal alternative to file-sharing and for that, I think, music companies are grateful,’ said Laura Martin, an analyst with Soleil — Media Metrics, an independent research firm. ‘But over time there may be more competition from services that shift the power back to content companies.’ So it may be a mistake to think that Apple’s share of the music market can keep expanding indefinitely.”

Full article here.
Maybe. Might. Speculation. Set to unveil. If. Promises. Predictions. More speculation. More maybes. The whole article is useless pablum. Give us a call when and if somebody has something concrete. Here’s one example of why La Monica’s article is pointless: Jason Hirschhorn, MTV Network’s chief digital officer, “We think the iPod has done a great job. Our aim is not to switch people from iTunes and the iPod.” (Associated Press, December 13, 2005). Here’s another: Google spokesperson, “no plans to acquire Napster, nor do we have plans to develop a music store at this time.” (MarketWatch, January 31, 2006). So, what’s the point of La Monica’s insipid article again?

Sure it’s a mistake to think that Apple’s share of the online music market can keep expanding indefinitely. They already have most of the market.

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Related articles:
Oppenheimer downgrades RealNetworks based on Microsoft’s ‘URGE’ partnership with MTV – December 15, 2005
MTV-Microsoft URGE music service not targeting iPod, iTunes users; Real CEO PlayedForSure? – December 13, 2005
Google: no interest in Napster, no plans to develop music store at this time – January 31, 2006
Napster does the math: layoffs commence with 10-percent of workforce lopped off – January 25, 2006

51 Comments

  1. That last quote is a bit of laugh. Analysts always seem to be stuck with their heads firmly in the old box.

    “Laura Martin, an analyst with Soleil — Media Metrics, an independent research firm. ‘But over time there may be more competition from services that shift the power back to content companies.'”

    The power isn’t going to be shifted back to the ‘content companies’! iTunes and the other online music distribution services, and especially the new Web 2.0 services such as Pandora, are going to increasingly and acceleratingly place the power back where it should be, in the hands of the ARTISTS.

  2. And by the end of this X-mas, There will be a double in the ipods sold again. Say 32 million since x-mas 2005. Then say 60 million by X-mas 2006. Game over. Too many ipods. They will not give up the songs they bought from itunes, and convert to something else.

  3. “But does the maker of the iPod and the popular iTunes music store finally have to start worrying about tougher competition down the road?”

    No, Apple needs to worry about things that might not be compatible with Mac OS X. They need to worry about the domination of other technologies that do not want to consider the Mac OS relevant.

  4. It is time to license iTunes. The steady cash stream can be used to continue to “change the world.” Apple can continue to create the best players.

    The industry needs a standard. I think it will create one, eventually, if they are not given access to the one which already exists, iTunes.

    Betamax, VHS
    Mac, Windows
    now, iTunes and ?

    In the first two cases the irrestible need for an industry standard won out in the mass market. I do not see how the current situation with digital music sales is different in this respect.

  5. I think the $100 stock price is waiting for cash flow. The promise of really big cash flow. The kind Bill gets by simply copying the same code over and over to sell it again and again.

    License iTunes!

  6. Why do all “anal”yst always change their tone when the word “google” comes up. Google still hasn’t succeeded in anything besides a good search engine and running google ads. Of course their will be more competition eventually, duh.

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