Why companies keep trying to come up with Apple iPod killers

“By most accounts Apple holds more than 70 percent of the market for portable music players and some 80 percent of the online music sales business through its iTunes Music Store – a fairly daunting lead, as contenders like Samsung, Sony have… found,” Richard Siklos writes for Fortune.

“And, meanwhile, as its rivals scramble to catch up and the music industry staggers through its digital transition, you could argue that Apple is moving the game to another level with its iPhone, video iPod and AppleTV receiver,” Siklos writes. “So why do they bother coming at Apple in the business of mobile music at all? Because, as iconic and singular as the iPod is, it is not as ubiquitous as one might think.”

“According to Solutions Research Group, a research firm based in Toronto, Apple is on track to have shipped nearly 120 million iPods worldwide by the end of this year, and nearly half that amount – about 60 million – Americans own at least one of the devices. (Many iPod owners are repeat buyers.) Thus, while the iPod is by far the leading mobile music player, it’s penetration of the U.S. population stands at around 20%, and it is lower overseas,” Siklos writes.

“The idea that the market might still be up for grabs also helps explain why its rivals want to stop the iTunes juggernaut while they can, and its partner-suppliers are pushing back before Apple extends its lead into the emerging world of digital video distribution and the already crowded mobile-phone market,” Siklos writes.

Full article here.

One important point that mostly goes without saying in Siklos’ piece (headlined, “Why the iPod can be conquered”), is that the market penetration figures also signal that Apple has plenty of room left for growth.

30 Comments

  1. 120 million by the end of the year? I though that they have already sold 110 million. I would think that between now and then they will sell well over another 10 million. Maybe they mean 120 million by the end of the FISCAL year?

  2. Did you read the article, MDN? I’m surprised you didn’t jump on the guy for that “iTunes songs won’t play on non-Apple machines” line.

    Gave up on correcting journalists, perhaps?

  3. iPod killers.

    Isn’t doing the same thing over and over again and expecting a different result a sign of mental illness?

    Only Sandisc has it right. They compete where Apple doesn’t, the very low end.

  4. > So why do they bother coming at Apple

    That is the fundamental difference between Apple and all competing companies. Apple creates unique products that no none else can produce without significant effort or obstacles. The others just try copy Apple as best they can.

    Examples – Mac and Mac OS X. iPod and iTunes.

    And if the market already had popular, easy to use, smart phones, Apple would not have created the iPhone.

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