Bear Stearns analyst expects Apple to respond to Microsoft’s ‘challenge’ with new iPod innovations

Bear Stearns Equity Research analyst Andrew Neff expects Apple to respond to Microsoft’s “clear challenge” (Zune) with new innovations in four areas: wireless, content, storage and platforms.

“Apple needs to be leading edge in these areas,” he wrote in a recent report to clients obtained by MacDailyNews. “The competition is not new. There are plenty of music players and music downloading services, but the challenge for any tech company is to obsolete your products or someone else will.”

Bear Stearns rates Apple shares “outperform” with a year-end price target of $88.

MacDailyNews Take: Apple has to keep innovating in order to lead. Brilliant. Thanks for the insight, Andy.

Related articles:
Microsoft Zune? They should’ve called it the Microsoft ‘iClod’ – July 24, 2006
Enderle: Microsoft’s ‘iPod killer’ Zune is ‘brilliant strategy’ – July 24, 2006
Microsoft’s so-called ‘iPod killer’ Zune won’t zoom up the charts – July 23, 2006
Microsoft confirms ‘iPod Killer’ plans – July 21, 2006
Microsoft’s rumored ‘iPod killer’ poses little threat to Apple’s domination – July 18, 2006
Microsoft plans Super Bowl ad for ‘iPod killer’ – July 17, 2006
Sounds serious: Microsoft approaches iPod accessory makers for Zune would-be ‘iPod killer’ – July 12, 2006
Microsoft preps complete line of Xbox-branded digital-media products – July 11, 2006
Photo of Microsoft’s ‘iPod killer?’ – July 11, 2006
10 reasons why Microsoft’s ‘iPod killer’ will fail – July 11, 2006
Enderle on what it would take for Microsoft to kill Apple’s iPod – July 10, 2006
Microsoft: ‘iPod killer’ reports based on ‘speculation and rumors’ – July 07, 2006
Can Microsoft hit a fast moving target? Apple likely to debut wireless iPod this year – July 07, 2006
Analysts: Microsoft faces uphill fight to supplant Apple’s iPod+iTunes market dominance – July 07, 2006
Microsoft plans to convert iPod users by replacing iTMS songs with free WMA format songs – July 06, 2006
Microsoft to release wireless ‘iPod killer’ by Christmas to challenge Apple – July 05, 2006
Analyst Wu: Microsoft unlikely to dethrone Apple iPod+iTunes – June 21, 2006
Microsoft preps iPod+iTunes killer – June 19, 2006
Report: Microsoft readying Apple iPod+iTunes rival – June 16, 2006
Microsoft: No iPod killer planned – June 05, 2006
Microsoft, Toshiba, DoCoMo, Victor to develop Japan iPod+iTunes killer – June 02, 2006

Patent application shows iPod capable of live wireless video conferencing – June 13, 2006
Apple patent application filed for wireless iPod+iTunes distribution – May 04, 2006
Generator Research: Apple to Ship $4.2bn in Wireless iPods (WiPods) by 2010 – March 14, 2006
Ready for your wireless Apple iPod? – February 09, 2006
Wireless iPod? CSR and PortalPlayer to bring wireless connectivity to personal media players – February 08, 2006
Wireless Apple iPods coming in 2006? – December 09, 2005

More blood on Apple iTunes Music Store’s play button: MyCokeMusic is dead – June 20, 2006
More blood on Apple iPod’s Click Wheel: iRiver gives up on digital media player market – May 23, 2006
More blood on Apple iPod’s Click Wheel: Sony’s Walkman Bean is cooked – February 13, 2006
More blood on Apple iPod’s Click Wheel: Dell dumps ‘DJ’ hard-drive MP3 player line – February 04, 2006
More blood on Apple iPod’s Click Wheel: iRiver pulling out of Europe? – February 01, 2006
More blood on Apple iPod’s Click Wheel: Thomson gives up on MP3 player, CE markets – December 12, 2005
More blood on Apple iPod’s Click Wheel: BenQ withdraws from MP3 player markets – November 28, 2005
More blood on Apple iPod’s Click Wheel: Olympus halts production of portable digital music players – November 09, 2005
More blood on Apple iPod’s Click Wheel: Rio is dead – August 26, 2005
Apple’s iPod has blood on its Click Wheel: Virgin Electronics is dead – March 08, 2005
Apple’s iTunes Music Store has blood on its play button: is dead – March 28, 2004


  1. MDN should stop posting ALL stories unless it’s a story about a new Mac model thats released.
    Then when there are 4 or 5 new postings a year all people will be complaining about how they never update this site.

    For those of you who think that MDN is putting too much non-Mac related content here the choice is simple. DONT ******* READ IT.

  2. Apple needs to innovate on “platforms”? Right now, Apple’s solution (iPod+iTunes) is the only one that works for Windows and Mac. Does this mean he expects that they expand to Linux? I doubt it.

    However, he could be referring to the iPod as a platform, but I doubt Apple will move in that direction either. More features didn’t help PSP take over the MP3 market, and Apple’s ease of use could suffer.

  3. OK, Here is my question.

    Why do analysts all think that if you are selling a product, it will not work unless EVERYTHING in existence is attached to your unit.
    Hard drive
    voice recorder
    fm radio
    am radio
    vhs player
    dvd player
    tv recorder
    tooth brush holder
    tooth paste dispenser
    dental floss holder

    OK, well you get my drift. People with no clue spend their time analysing. ???

    What a waste of time. lol ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />


  4. Apple will fail. Microsoft and the PC vendors will start bundling all PC with Zune and drive down the price. and there goes the years of Apple/iPod/iTunes dominance.

    Enjoy the last days of iPods.

  5. Microsoft appears to be putting on its Achilles sandals to take on the Apple tortoise of innovation. Maybe Zune should be renamed ‘Zeno’ as in Zeno’s paradoxes.

    Well, we know the outcome of that ancient race. The tortiose was never overtaken.

  6. How can Apple be “challenged” by a product that does not exist? Let’s wait and see (1) what this “iPod killer” actually does (2) and compare it to what Apple has when it’s actually released. If history repeats, the MS product will be available at about the time Apple releases the 8G iPod, in 2008.

  7. “four areas: wireless, content, storage and platforms”

    Wireless – maybe – I’m not needing it

    Content? Already got it already – ever hear of iTunes?
    Storage? WTF!
    Platforms? You got to be kidding me.

    Here’s my impersonation of analyst…

    “Ok Apple, so Microsoft’s got this really “new” stuff coming out. So what we need you to do is do something like that’s even, you know…. NEWER. Like a hard drive thingy or e-ray vision or something like that. Something that these kids will go WOW! – you know like the hoola-hoop!!!!”

  8. “There are plenty of music players and music downloading services, but the challenge for any tech company is to obsolete your products or someone else will.”

    Hello? How long has this guy been covering Apple? Has he already forgotten that Apple killed off its best selling iPod (the iPod mini) with absolutely no warning. Apple has no problem obsoleting its own products when it has a new and innovative product. The nano replaced the mini, and I wouldn’t be surprised to see a new format replace the full-sized iPod or slot in above it in the lineup soon.

  9. Ron:

    There is no love lost between PC hardware manufacturers and Microsoft. If you think that Dell, HP, Gateway, Toshiba, et al are thrilled that there’s no Windows Vista to ship on their computers this fall, think again.

    PC box makers are looking for a way out from under the Microsoft thumb as much as anyone else. If you think they will bundle a Microsoft hardware device with their PCs, thus furthering the bondage, you are sadly mistaken.

    Someone said it best on another thread: Time for your meds, Ron. Time for your meds, Ron. Time for your meds. Ron.

  10. Apple needs to “respond with innovation?” Give me a break. Apple will continue to innovate in this area whether or not MS ever gets a clue.

    Does anyone really think MS is going to come up with a wireless solution for sharing/downloading files that’s elegant (or at least user-friendly), doesn’t rip us off (to appease the record companies) and the average Joe can set up without an IT department?

    This is an area where MS is totally UNABLE to leverage it’s OS monopoly and it shows. MS became a monopoly because it sold big business a bill of goods and Apple/Amiga/Atari totally dropped the ball. The iPod/iTunes ecosystem does not and will never depend on big business/IT departments making the “buy decisions.”

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