• The Mac Music Report: Staying Unbeatable

    September 10th, 2005

    When you have a product that dominates a market big time, competitors are constantly nipping at your heels. The skeptics who never believed you’d ever succeed are hoping and praying for the day you’ll fail. Even when the things you do are smashing successes, potential downsides are eagerly sought. On the one hand, we celebrate success, and on the other, we tell the companies that failed that it served them right.

    Every single move taken by Apple Computer since it achieved unexpected success with the iPod has been placed under the microscope. The slightest misstep, or perceived misstep, is assumed to be the first of many, the inevitable fall from grace. Subscription music services? Well, some Wall Street analysts tell us that Apple is missing the boat not following the crowd. Even though Steve Jobs tells us that we really do want to own our music, there are some compelling aspects to renting. And, after all, we do rent movies, right? Consider that you can have access to hundreds of thousands of tunes for just a few dollars a month. Now they seem to forget that some of the music available from those services can only be sold, not rented. If you forget to pay your bill that month, and perhaps all you’ve done is cancel a credit card with a high interest rate because you got a better deal with another bank, kiss your music library goodbye.

    Realistically, maybe renting is just a way to sample a large number of songs before you buy them, and, eventually, Apple might consider subscriptions as an alternative. But when it has over 80% of the legal music download market, what’s the rush? Besides, Apple has just ten million music customers. That’s a drop in the bucket. There’s a huge untapped market out there, and as long as existing customers keep buying, and lots of new ones sign up, the pressure remains on the competition to find a way to catch up.

    Music players? Well, so-called experts tell us that Apple can’t continue to maintain a nearly 75% market share indefinitely. All right, so Rio won’t be around to challenge the status quo much longer. All right, so Creative Labs can’t mount a credible challenge, and may have to resort to attempting to enforce its alleged patents on music player interface design to extract a few dollars per unit from Apple.

    Sony? How can it miss? Didn’t Sony invent the Walkman, the first successful portable player? Didn’t its dominance eventually erode? What about Sony’s latest attempts to mount a credible digital music competitor after a few tragic failures? Isn’t Sony a design-oriented company like Apple? So Sony must be destined to regain its rightful place in the sun. But wasn’t it embarrassing to discover that Apple is now selling three iPods for every Sony PlayStation? Just asking?

    What about a video iPod? Isn’t including a feature that lets you view your photo library kind of a half-hearted effort at the real thing? Besides, doesn’t the competition offer video players? Well, they’re not exactly flying off the shelves, right? If Apple does do video, it’ll try to find a way to make it work. The models available out there right now clearly haven’t captured the public’s imagination, so why imitate failure?

    Now consider the iPod nano? It replaces Apple’s best-selling model, the mini. So does it really make sense for a company to discontinue its most popular model and take a chance? Are you planning to rush to your favorite electronics emporium in the hope that there will be a few minis left, perhaps one in your favorite color? After all, the nano costs more for less capacity. Does that make any sense? All right, it is “impossibly small” and downright cute. And you can take it jogging without fear of skipping or perhaps damaging the delicate mechanism of a tiny hard drive.

    You know, I could see the wisdom of a Flash-based music player when my son phoned the other day and asked me if I knew someone who could fix a friend’s iPod–whose hard drive didn’t survive a fall–at an affordable price. This isn’t to say that hard drives are destined to soon disappear from the iPod line. It will probably be several years before Flash memory is cheap enough and has sufficient capacity to completely supplant drive-based music players, but it’s inevitable.

    Now as to mobile phones with music players, the reaction to the Motorola ROKR seems decidedly mixed so far. It isn’t near as slim and sleek as the RAZR and it’s almost a half ounce heavier. But there it is, iTunes on a cell phone. All right, it’s a little awkward to use. You have to tether it to a USB cable to retrieve your tunes from your computer. You can’t just pair it via the phone’s built-in Bluetooth feature. That would be too easy. Buying songs online? Maybe some day, when Cingular’s network is upgraded.

    While all this is happening, some folks still say that Apple ought to open the iPod to other music services, or allow other players to work with iTunes. I have but one question: Why?

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