And the next iPod killer is?

Stan Beer
Monday, 04 September 2006 16:42

Opinion and Analysis

You know you’ve really made it in a business, when swarms of competitors crawl out of the woodwork trying to catch a ride on your coat tail to success. In the case of Apple’s music business it is almost embarrassing.

As the holiday shopping season approaches, the number of would-be iPod and iTunes killers is astonishing.

It seems that almost every day for the past month or so (OK that’s an exaggeration) some new service, music site or whiz-bang music player has been launched, demonstrated, touted or rumoured.

Some of the most recent offerings include: new flashy SanDisk flash RAM players; the Spiral Frog site with ad-supported free music downloads; MySpace with 3 million tracks from unsigned (unknown?) bands; Samsung to open its own online music store; and Nokia to also establish a DRM-free online music service.

Set as a backdrop against all of this, is Microsoft’s overarching desire to relive old times, when it crushed Apple with its bare hands in the PC business, by launching its own music player ecosystem called Zune.

One can only imagine the bemusement of the Apple management team as they watch would be rivals scrambling to gain a foothold in the remaining 25% of the digital market that it doesn’t dominate.

Apple’s domination of the digital music market is going to be a tough nut to crack because its business model and user base are established and difficult to duplicate.

The current quarter and the following quarter will be interesting to watch.

Last quarter, Apple sold more than 8 million iPods. There have been no new product enhancements since then, so if there is a sales slowdown this quarter it will be a signal for Apple that it can’t afford to be complacent.

If there is no slowdown in iPod sales, it will be a signal to Apple’s competitors that they’ll need something more than slightly fancier me-too devices and websites to be players in this space.