Michael Gartenberg on Apple's Stranglehold on Digital Music

[James Fee]

<div class='os_post_top_link'><a href='http://weblogs.jupiterresearch.com/analysts/gartenberg/archives/012255.html' target='_blank'>http://weblogs.jupiterresearch.com/analysts/gartenberg/archives/012255.html</a><br /><br /></div><i>"Music is important but overall, owning the dominant position for music and portable media devices leads to other things. This is why Microsoft needs to be concerned. How bad is it? Well, as we expected, the iPod is having a runaway start to the holiday season. I haven't seen one report, one commentary that even mentions ANY other device. Imagine Apple launches some new stuff with a strong push in 06 (Apple wisely ignores the noise of CES and prefers to wait until the following week for Macworld. They get the stage all to themselves and get to see everyone else's hand a week before). Now we move to more quarters into 06. We're beyond the point of mainstream adopters. It's now mass market for the iPod. I'm not suggesting it's game over. But I will say, it's hard to see how anyone can pull the market away from them."</i><br /><br /> <img src="http://www.digitalmediathoughts.com/images/ipodblack.jpg" /> <br /><br />There were media players before the iPod came along. Names like Rio were synonymous with mp3 players. The big question is <i>WHEN</i> Apple moves into the "media center" market, will the same thing happen to Microsoft and MCE? The XBox 360 shows Microsoft can create a device that people want, but its probably too expensive to really take off as a DVR. History could be repeating itself here with a closed proprietary system (Apple) overtaking an more open proprietary system (Microsoft). Of course consumers seem content with their cable rental DVRs so getting them to purchase any DVR is difficult (just ask TiVo). Still Apple has something that no other technology company has, the iPod and unless they can move their shows from their Scientific Atlanta DVR or Microsoft MCE to the video iPod, I suspect they'll be looking for an Apple solution (much to the chagrin of TiVo and their TiVoToGo).

[Kent Pribbernow]

What will be equally interesting to watch is Apple's move into subscription services, particularly music. Yahoo has done a great job with its online subscription service. Can Apple repeat it's success with downloadable music in this "new" market? That remains to be seen.

As for Apple taking on MCE...we'll see about that. I recently had a chance to play around with Frontrow. Nice and simple though it is, it's nowhere NEAR as broad or feature-rich as MCE. Frontrow is clearly an example of Apple dipping its toes in the water. Next year we'll see further expansion into the media center genre, especially with regards to the shift from PowerPC to Intel. Viiv, where are you?

[James Fee]

it's nowhere NEAR as broad or feature-rich as MCE. Think that really matters? Give how much of a niche product MCE is right now due to Microsoft blundering its distribution, I wouldn't be surprised if in the end the same thing happens with MCE as has happened with WMA.

The XBox 360 proves when Microsoft controls the whole product (from hardware to software) it can be successful. Might be time to bring back UltimateTV (http://www.microsoft.com/ultimatetv/) if you ask me. Why DirecTV picked TiVo over UTV is beyond me and everyone who ever owned a UTV (and this from a TiVo lover!).