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  • Why Apple Needs Competition?

    November 30th, 2006

    With all the pretenders to the iPod throne clearly failing, and the Zune may join the list unless sales pick up big time real soon, you wonder if Apple can continue to float along as it has, resting on its laurels.

    To be sure, the latest updates to the iPod line were mostly cosmetic and incremental. The shuffle is tiny and cute, the nano echoes the iPod mini with the aluminum case and color choices, but none of that is revolutionary. No major new features to shout about, at least for now.

    It’s not that Apple has lost its mojo, and is unable to deliver any creative enhancements in the way the iPod works or the features it contains. But if you compare the original model with the current 5G version, not a whole lot has changed. Sure, there are refinements to the scrolling, much more storage space, a larger screen and the ability to play videos, but those are changes that are incremental and not revolutionary. The fundamental form factor isn’t all that different, despite the smaller size.

    It’s fair to say that the iPod’s similar elegance may be something that works so beautifully that it shouldn’t be changed without a lot of thought and testing. You can’t argue with success.

    On the other hand, consumer products that become cultural icons are always in danger of becoming irrelevant faster than you can possibly imagine. It is not impossible for another company to build a better music player. Sure, the first iteration of the Microsoft Zune may not be that product, but it didn’t sell so badly the first week, where it gained the number two slot in the marketplace. Besides, even if it doesn’t wrack up more than a few hundred thousand sales this holiday season, that’s pretty good for a version 1.0. What about 2007?

    Indeed, just what is Apple planning to do for an encore? Will they try to deliver more of the same thing next year, or wow us all with a new and different approach? Should it be a marriage of a music player and the mobile phone, something that hasn’t worked all that well so far? Clearly, folks are clamoring for the rumored iPhone, even though it’s still not certain it’ll show up anytime soon.

    Will Apple decide that some sort of wireless capability is important in light of the fact that Zune has Wi-Fi? Why just be able to “squirt” a song to another player — and at least with the iPod there will be people to send it to — when you can mate with your PC or just get your songs directly over the air?

    Regardless of how Apple responds to its competitors, it’s a sure thing that the most powerful incentive of all is a strong pretender to the throne. If iPod sales slow, and another product begins to really gain a growing segment of the market on a long-term basis and not just the first week, Apple would have to work hard to make sure it retains an advantage.

    In the end, you get a better music player, be it the iPod or something else. There’s nothing wrong with that, and it is a good thing.

    In the computer wars, you can be certain that the Mac’s resurgence influenced Microsoft to crib some of Mac OS X’s features for Windows Vista. Certainly, Internet Explorer languished until that upstart Firefox recorded millions and millions of downloads. Suddenly, Microsoft realized it hadn’t upgraded Internet Explorer in years and it was time to add tabbing, improved security and other features.

    Sure, Microsoft might not lose more than a little bit of its overwhelming dominance in the short term, but that may be sufficient to force it to try to do better. If, after Vista is released, it is perceived is pretty close to Mac OS X, that will, one hopes, compel Apple to make Leopard that much better. You can say they’d do it anyway, but that’s not always a certainty.

    Regardless, I can’t wait to see how it all plays out.



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