SanDisk has an 8GB player so what?

Stan Beer
Wednesday, 23 August 2006 17:16

Opinion and Analysis

It seems that the media has gone bananas over a new portable music player, the Sansa e280 a new portable music player from Flash RAM maker SanDisk. The SanDisk player has 8GB of flash for US$249, around the same price of the 4GB iPod Nano so iPod is in trouble. Baloney.

It doesn't seem to matter how many times you say it, when the media catches a whiff that they might have stumbled across an iPod killer, they'll jump on the bandwagon, regardless of the facts.

Fact one. The iPod Nano can carry 1000 songs - more than most users ever listen to.

Fact two. There are tens of millions of iPod Nano users who collectively own hundreds of millions, perhaps more than a billion songs that can only be played on an iPod and no other portable music player.

Fact three. Apple iTunes is the most popular music download site in the world by a country mile and the only portable music player that plays its music is the iPod.

Fact four. The iPod is more than just a portable music player. It is a lifestyle accessory, an image, an icon of the era. The name iPod is instantly recognizable and has spawned offshoot concepts, such as the Podcast.

Fact five, iPod has achieved a more than 75% market share through a combination of factors, including the iTunes-iPod symbiotic business model and the image marketing of Apple.

Fact six. SanDisk Sansa is a piece of hardware with a large amount of memory and little else. It is not going to win over existing iPod users who are locked into iTunes music downloads and it will have to compete with the superior marketing resources of Apple for new users.

Fact seven. Microsoft, which is far better resourced than SanDisk and in a much better position to understand what is up against with Apple iPod, admits that it may take five years to get a decent foothold in the music player market with Zune. And you can bet your boots Microsoft will have an online music store tie-in to comete with iTunes.

Fact eight. The SanDisk marketing strategy seems to be little more than offering prospective customers a portable music player with loads more memory than they need. Where they get their music from is their problem. Creative preceded Apple in the portable music player business by years. As soon as Apple unleashed the iTunes-iPod business model, Creative became an also ran.

The portable music player business is not simply about the hardware device that delivers the music. It's about the consumer music supply chain. At present, Apple executes the portable music delivery model better than anyone else.

After looking closely at what Apple has achieved, Microsoft is also going to have a crack at supplying some real competition. If SanDisk really wants to get into the business, perhaps the company might consider forming an OEM association with Microsoft.