11-20-2006, 07:53 AM
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Ponderer
Join Date: Nov 2006
Posts: 81
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The Market and its Future
Hype. Everyone has something to sell. If you are a blogger or a columnist you need "iPod Killer?" as a headline to sell your thing. Frankly, most people don't care that much about MP3 players to spend a lot of time reading about them or the companies that make them.
The fact is that current users of MP3 players have large investments in their current player, player accessories, and purchased music that will play on them. That means that you have slow migration regardless of how cool or wonderful the new player is. Its common sense and Microsoft, Apple, SanDisk, Creative, Rhapsody, etc., all know it.
The myth in all this is the notion that Microsoft must outsell Apple to win. That is simply wrong. If Microsoft grabs 30% of the market it will be successful. If the herd thins out, as they always do, Microsoft and Apple will be left standing with one or two other players. That mean more business for both.
Cost of electronics will continue to fall. A 500GB player with one week battery life (if you turn it off when you sleep) will cost way under a $100 dollars in the not so distant future. Selling content and connectivity infrastructure is the commercial future. Think automobiles and gasoline: which do better car companies or oil companies? I'd rather be Exxon then Ford.
Don't forget about the content providers. The record labels have a lot to say about what goes on. They do not want Apple to hold so much power for obvious reasons. The labels will work to help Microsoft because they have the best chance to scale down Apple's market share. Oddly enough I did some calculations and based on Apple's own numbers, they only sell 14 songs per iPod sold. That seems freakishly low, I can't it explain it.
The market is growing. Microsoft can grow into the market by marketing to younger users. If the marketing works younger users will not want to use their "fathers iPod", they will claim a new brand as their own. The sharing ability of Zune could cause non-Zune owners to want Zune so they are not left out. Critical mass is required but that can be measured more than one way. Overall sales is not as important as the number of user clusters. Image if just 10% of the market was Zune but concentrated into high density clusters of users. Those clusters would ripple and Zune would grow more like bacteria; in spots that get bigger and bigger.
One other greatly overlooked user group: people over 50. These "baby-boomers" are the first heavy duty into music generation. And they all start to need reading glasses to see anything close. The Zune's big easy to read screen will be a big selling point and there are twice as many of them as their are any other age group in the US. They should not be overlooked.
One thing is vital, Microsoft must get the wireless fully featured and functional ASAP. It must be done before Apple does it and does it right. Microsoft must be doing it right first or all will be lost. This is more important than the zPhone or the iPhone.
No one is going to buy a Zune Phone at Verizon unless its half the size of a Zune anyway. Personally I'd rather see a Zune with bluetooth that acts like a BT headset so I can answer calls via my Zune (with auto music pause).
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