The iPod Tops 100M, But Is It Still #1?
04.16.07 - 12:27pm
The iPod has grown into a fashion icon - the “American Idol” of music players, yet even as Apple celebrates reaching 100 million in iPod sales there is new competition that is threatening to overthrow it and maybe already has.
Greg Joswiak, Apple’s vice-president of hardware marketing said at the celebration, “I don’t think any of us could ever have dreamt that we could come this far this fast.†A true statement as Apple has grown from a questionable company with 5 billion in yearly sales in 2001 to a immensely successful company boldly commanding 23 billion in yearly sales in 2006. A rise made on the back of the iPod with over half of those sales coming from the iPod and its counterpart iPod store: iTunes.
Yet now the world of music players is becoming a whole new marketplace and one in which, for Apple, the iPhone is particularly important. The reason the iPhone is so important is simple - the world is switching from MP3 players and iPods over to MP3 player phones. Why? Ease of use. It is simply nicer to have everything all in one device, your music, your phone, your mapquest finder, the internet, your camera, your PDA. In today’s world people want one device, not ten, thus eliminating the need for a large storage bag to haul all your gadgets.
Sony Ericson is making a huge marketing push for their music phones combined with their Walkman brand - phones that are ultra-slim (similar to the Nano), have a 2 megapixel camera, and are cheap - way cheaper than the iPhone will be. However even with 43 million in sales last year they were largely outdone by Nokia. Nokia has current claims to the top spot in the music playing phone industry with over 70 million music phones sold last year. It took Apple six years for the iPod to sell 70 million. If you include phones in the MP3 market it is Nokia that is topping the charts.
Nokia’s research also suggests that over 60% of users are now using the MP3 players in their phones. Mark Squires, at Nokia UK, said, “We’ve now got 2GB [gigabyte] memory cards for £15($30). Most people can quite happily store most of their music in a couple of gigs [of storage]. Phones have grown to be able to hold your music library, and before they couldn’t.â€
Not only is Nokia selling the phones like crazy they are also launching their own music store to compete with iTunes. That and Nokia has network operators in all countries, something Apple hasn’t achieved yet, and their MP3 smart phones are also largely subsidized by the networks carrying them, making the Nokia phones virtually free to buyers.
Apple is hoping the iPhone will carry them into this market as it appears that soon enough iPods and the like will be obsolete and instead users will want one device for their phone and little music player. Right now Apple has the obstacle of price as well as lack of 3G and only 2 megapixel camera going against it. It may have a super slick design look and the touch screen is fun and flashy yet it’s “innards” seem to already be behind the times. Yet Apple does have the Apple brand and amazingly good marketing strategy behind it. Apple has become “cool” and people pay for “cool”, so it is a wait and see for us and for Apple it could be a make or break for the company.
Speak Your Peace