Need Input On The Future Of Apple In The Mobile Music Market

Hi everyone,

My group and I are currently doing a project on Apple's dominance in the mobile music market (ie. ipods).

We determined that Apple's problem is that increasing competition is threatening Apple’s dominance especially with Microsoft's new Zune.

Can anyone share some information that they believe Apple can use as strategy to defend their position?

Any input or information (strenths, weaknesses, threats, opportunities, and future product possibilities) that could help lead us to some potential solutions would be appreciated. Also, if it's possible, please provide references.

Thanks a bunch, we're not the most Apple literate =)

As of Apple's September Keynote speech the iTunes Music store had an 88% share of legal music downloads and is 5th overall in music sales (including cd's) and could pass amazon into 4th next year. Thats a huge market share that Apple already has, and I don't think there are any competitors that offer enough to sway people who are already using iTunes to another service.

prettyinpink said:

We determined that Apple's problem is that increasing competition is threatening Apple’s dominance especially with Microsoft's new Zune...Can anyone share some information that they believe Apple can use as strategy to defend their position?

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I wasn't aware that Apple even had a problem that would necessitate any action to "defend" their position. iPod is a household buzz-word and has been for years. Apple is no immediate or eminent danger of losing its marketshare with regards to the portable, digital music player.

Apple has the ipod not an mp3 player which is what it really is. In school when somebody (not a student, but a administrator) was giving a presentation, they were talking about putting audio files on your mp3 player or ipod. iPod is a name that has sepperated its self from the rest of the mp3 plaer.. it does not need defending...

i like doing your hw for you btw.

I understand that Apple has an amazing position in the market as well as majority of the market share (I have an ipod myself), but our teacher would like us to do a case study on all of the new competition coming into market TRYING to pose a threat to apple.

Apparently the Zune will have wireless user to user download capabilities that the ipod currently does not. As well, Microsoft will be teaming up with Spiral Frog to offer free music downloads (the source of profit will from advertisements) for the Zune, but because the music is in wma format, it can not be downloaded to the ipod or be burnt onto CDs.

We're just looking at examples like this to see if Microsoft will be able to challenge Apple for, most likely not all, but SOME of their market share.

Just trying to play devil's advocate here.

Well you brought up the fact that Zune wireless capabilities but...Zune's wireless capabilities are actually crippled. It can connect to WiFi but if you want to share music other Zune owners can only listen to a song 3 times. Also, Zune will not be able to DL content via a WiFi network(***?). Another factor that should be considered is battery life...An mp3 player with WiFi is cool but I am sure it will do a number on the battery.

I actually read an article about the pricing of Zune. Apple took MS by surprise when they priced their video iPod at 249.99 and MS was forced to cut their price to compete with the iPod. Now that MS has cut prices to compete with the iPod they will be taking a LOSS of $50 for every unit they sell.


And one more thing...The Zune has a capacity of 30GB. Once you get a some music and a couple of decent quality movies the 30GB will dissapear faster then a reggae band at a KKK convention.


I don't see any MP3 player de-throning the iPod anytime soon but if anyone has the money and the resources to do so it's MS.


Good luck to you.

prettyinpink said:

I understand that Apple has an amazing position in the market as well as majority of the market share (I have an ipod myself), but our teacher would like us to do a case study on all of the new competition coming into market TRYING to pose a threat to apple.

Apparently the Zune will have wireless user to user download capabilities that the ipod currently does not. As well, Microsoft will be teaming up with Spiral Frog to offer free music downloads (the source of profit will from advertisements) for the Zune, but because the music is in wma format, it can not be downloaded to the ipod or be burnt onto CDs.

We're just looking at examples like this to see if Microsoft will be able to challenge Apple for, most likely not all, but SOME of their market share.

Just trying to play devil's advocate here.

Click to expand...

We're heavily biased, can't you tell..you might get better feedback tackling this over at a Microsoft forum....but you are probably already doing that..


~

digital john said:

the 30GB will dissapear faster then a reggae band at a KKK convention.

Click to expand...

That's funny. I've never herd that one before.

thanks digital john,

that was actually really helpful information =)

digital john said:

I don't see any MP3 player de-throning the iPod anytime soon but if anyone has the money and the resources to do so it's MS.

Click to expand...

I know they have the money and the resources to do it, but I don't think they can.. It would take so much money and resources that there will be no way that they will ever make a profit. Apple not only had a large market share with the portable music player market, but alot of those customers are either a) loyal or b) so invested in iTunes music store purchases that it would be stupid for them to buy a different player. I know I am both, I am very loyal to apple and their ipod, however I would not say I am so loyal that it is all I will use, for example if apple starts killing people just to kill them, then I would no longer be a loyal apple customer because I would not like their practices. I also have a crap load of itunes music store purchases, I buy from itunes when I get bored and want to listen to new songs and find a new one I like... for this reason, having an ipod is very important to me, because all the albums I bought would not be able to be played on another player.

Microsoft has the money, they know how to make a semi good product, and dominate the market... but they lack so many things that you need to be able to take apple down from where they stand in the portable music player / entertainment business. They don't know how to effictively advertise. Apple does, and advertising vs. not advertising is going to with out a doubt cause the people who don't advertise effectively to not gain market share on the people that do.

Sorry that whole post made no sense.

I reccomend that prettyinpink read This Thread.

MS has no real history in selling it's own hardware, and in a fair market with real competition, MS often fairs poorly. Look at the X-Box and even MS Keyboard and Mouse sales. The X-Box is getting a boost from Sony shooting itself in the foot more than the 360 being great, and MS sales are only average in the Keyboard and Mouse market and offer no particular advantage over other vedors (in fact the MS name often HURTS sales).