Friday, April 04, 2008

Remember the 'Zune'?
that's OK, neither do I

I saw this article in the Journal today and my mind starting wandering. The focus of the article is about the social networking site, MySpace, coming out with its own music service to try and take on Apple's iTunes. (Good luck guys).

What got my mind wandering was last part of the first paragraph:
MySpace and the music industry unveiled Thursday an online music service to challenge Apple Inc.'s iTunes Store, even as the digital retailer announced it has become the top music seller in the country after less than five years in the business.
I'd say that calls for a little more fanfare than an aside in an article about the latest pretender to the iPod/iTunes throne. I guess the reporter could be forgiven for taking world iPod hegemony for granted. But, perhaps someone could give this guy a little perspective.

Five years ago, Apple was a pc maker struggling just to stay afloat as a viable alternative to the nearly universal Windows monopoly. Then Apple introduces the iPod and ignites a world-wide digital music revolution. The iPod conquers the world and, by necessity and in consequence, iTunes creates an entirely new market for online digital music services. And don't forget, the wild success of the iPod has had no little impact on the success of subsequent Mac computers.

So, to summarize, Apple creates the iPod. Five short years after its introduction, it is the most dominant and unquestioned leader in the multi-billion dollar digital music device market it created. Can you even think of any viable competitors to it? The 'Zune'? Sure, yeah, right.

As a consequence of the success of the iPod, five years later, iTunes is the country's (and probably the world's) market leader, not just in the online music services market it created, but in the multi-billion dollar retail music services market. I take this to mean, iTunes sells more music than any other retail outlet: amazon, Wal-Mart, Tower Records, etc.

As a further consequence, Mac computers are selling pretty briskly as well, thank you very much.

That one iPod device created and globally dominates two industry markets and provides a significant boost to a third. Somehow I doubt that was even in the upside projections when the Apple folks put their business case to Steve Jobs 5 years ago.

To say the iPod has exceeded their expectations would be a slight understatement. My guess is that business schools will be doing case studies on the iPod a hundred years from now and still get blown away.

No comments:


Blog Archive