Florian Seroussi's Blog

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Media Player War. Can Apple lose?

In the 80’s you had to have a Walkman no matter what. For many of us it was our first gadget. Portable music.
30 years later things look different.
Cassettes have disappeared, music went digital not without difficulties. Although MP3 format started in the 90’s first MP3 player came out in 1997.
In 10 years Apple imposed itself as the sole purveyors of digital music.  All attempts from consumer electronic giants to take over this market failed.

What is changing today?

Few factors are weakening Apple leadership on this segment.

#1 factor comes from Cupertino – the iPhone.
The smartphone device has replaced many iPods. Convergence created a competitor inside Apple. Why would you carry an iPhone 32Gb in one hand and an iPod 32Gb in the other?
Apple made it clear in their early iPhone advertising, it’s a phone and an iPod all-in one!
Second factor is the lack of innovation. Ok, now I’m hitting a nerve – let me clarify. Apple is the most innovative consumer electronic manufacturer ever BUT once a product is out they fail to integrate basic features we all want to see ie adding a memory card reader in MacBook (took them 10 years to do so) or to offer Blu-Ray players built-in, to integrate FM player in iPods, move to OLED displays, etc….
New comers are very aggressive on updated technologies and multiple add-ons that are starting to make a difference.
Finally the price of iPods is too high. I guess Apple executives are thinking they should grab the momentum while it lasts.

Who can hurt Apple?

I see 2 big competitors rising: Microsoft and Sony.
Zune was the laughing stock a couple of years ago when Microsoft released the “brick” 1st-gen Zune. A joke went around about Microsoft’s pathetic attempt to enter the “iPod market.” So a year passed, and Zune remained a joke in the consumer electronics world and had to endure the jeers and torment of the Apple crowd. When the 2nd Gen Zunes came out, the Zune brand slowly started to see redemption. The Zune 80gb was deemed the first decent competitor to the iPod, but the brand was still in recovery from its hazing.
It took some time, few billion dollars and lots of consumer reviews for MSFT to come up with new Zune HD.
Amazingly Zune HD is sold out on Amazon, BestBuy and most retailers.
The Zune concentrates on being a Portable Media Player. Not a web browser. Not a game machine. Maybe in the future it will do even better in those areas, but for now it’s a fantastic way to organize and listen to your music and videos, and is without peer in that regard.
Zune Pass subscription service is the favorite feature that will keep buyers to use a Zune until it’s pried from their desperate grasp. For $15 a month you can get 10 DRM-free MP3 songs to keep, and unlimited access to millions of songs. As long as you would have bought at least 10 songs anyways that means you’re paying only $5 for that access. It’s better than Pandora, Slacker, LastFM or other services because you can listen to full CDs, specify playlists and tracks in the exact order you want, and can either stream this music or store it on your Zune to listen to later, even if out of wifi range. Lots of people present subscription services as something you do instead of owning music, but at this cheap a price there’s no reason you can’t use this as a supplement to whatever purchases you make. It’s not either/or, it’s a wonderful “and”, especially if you’re the type who likes to explore and enjoy a broad range of music.
HD radio and HD Video (720p) are killer features. I wonder how long it will take for Apple to move there.

Sony made a bad move when they decided to partner up with Ericsson and use the Walkman brand name on a line of phones. The idea was appealing but the execution was terrible. Perfect example of brand awareness vs. brand association.
Walkman is coming back in the digital music segment with a new line of players. For first time in years Sony outsells iPods in Japan promising a tough fight in the US during the holiday seasons.

Apple has a lot to worry about. Consumers are not married to any brand. They come and go. Personally I moved to an Android powered phone – HTC Hero and ordered a Zune HD.

What will be your next media player?

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This entry was posted on Sunday, September 20th, 2009 at 11:42 pm and is filed under Apple, Geek, itunes, Microsoft, Music, Sony, Technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

7 comments to “Media Player War. Can Apple lose?”

  1. Mike Poster says:

    Excellent post although I think Apple is safe for another decade.
    You did not mention iTunes which is Apple buyer’s #1 argument to get an iPod.
    You might be right if Apple decides to open iTunes to non Apple devices. Did not happen with Palm Pre.

  2. Eric Cohen says:

    Great post. I didn’t know Sony was catching up on Apple in Japan.
    I’m also tempted to test out a Zune HD.
    Some ppl are turning away from Apple due to their policy on Apps and DRM. To stay ahead the race they need to open up quickly.

  3. iTunes needs to become a standard. I believe Apple will improve its image if they’d open to Spotify, BlackBerry, Palm and others.
    Those 3rd party will have to pay a fee to use iTunes and it would prove to be a good business model for Apple.
    Forgot to mention you can get a Zune HD and 14 days of free unlimited music when you sign up. That makes a real difference.

  4. I absolutely agree, there is some great competition coming at Apple. The new Zune HD does really look sleek, and there is a generally good impression about it on all the media and gadget sites (I haven’t personally played with it yet).

    The only thing missing from this post is taking in consideration another huge player in this game: the iPod nano.

    Apple made really clear that the iPod Nano is their primary music device, not the iPod Touch, targeted to who’s interested more in games and other apps, nor the iPod Classic, that appeals to those who wants all their 160gb of music with them all day.
    Sure, the Zune HD is an really nice mp3, but if I didn’t have any interest in iPhone/iPod Touch apps, I would drop the HD video (it doesn’t really makes sense on such a small device anyway) every day in order to get a $40 cheaper iPod capable to record videos.

    Another factor we need to keep in consideration is piracy. Sure, a monthly subscription may seems cheaper than buy song by song or album by album, but I’m sure that a huge percentage of the songs played daily on the millions of iPods around the worlds aren’t exactly “legal.” And those are cheaper than any subscription on the market.

    For sure some good competition is always welcome in the market, because it will help to keep the leader on the tip of their toes, but right now I don’t see anybody that could be able to seriously endanger Apple’s leadership for at least the next 3 years.

  5. HD output is not only to watch content on the device but to plug to your TV wherever you are and enjoy great video quality.
    Nano, Touch, Shuffle and iPhone are competing one against the other.
    Why would you buy an iPod Touch if you have a Nano? It doesn’t make sense.
    Microsoft and Sony have a good opportunity to grab market shares – they are not ready to give up the fight.
    Time will tell if Apple was wise enough to capture market retention.

  6. adolist says:

    I recently updted my iPhone and I can’t figure out how to send pictures. Any help?

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