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Analyst: New Competitors Likely To Eat Into iPod Market Share

Analyst: New Competitors Likely To Eat Into iPod Market Share

by , 12:00 PM EDT, October 26th, 2004

The AP has published a story on the music player market that focuses on all the recent iPod competitors entering the space. The story quotes NPD analyst Stephen Baker as saying that while Apple is likely to maintain its current status of market share leader, the new competitors are likely to eat into that share. From the story:

"There's no way they could sustain more than 70 percent share over time," NPD analyst Stephen Baker said of Apple. "That's very very difficult to do especially when the product is based on a commoditized component, the hard drive."

Here's how the competition stacks up, according to Baker: "Rio has a long history in the market. Creative has a strong pipeline of products. You can't count Samsung out. We can't forget Sony - that they'll eventually find some market for these products with a strong design and distribution channel, and Dell will bludgeon everybody with price."

But the challengers face a daunting task as they battle to nip at Apple's reign. In August - NPD's latest available figures - Rio and Creative ranked a very distant second and third place in US market share, with 2.4 percent and 2.3 percent respectively.

There is much more in the full story, and we recommend it as an interesting read. It offers a fairly comprehensive overview of the current market.

The Mac Observer Spin:

Mr. Baker is right. It is not likely that Apple will be able to maintain 70% of this market, but we see the company continuing to be the 800 pound gorilla, if not the Microsoft, of this space.

Observer Comments

Show: Subjects Only | Full Comments
Close Name:jimothy Posts: 612 Joined: 04 Jun 2004
Subject: Things look good for Apple

Really, things look good for the portable player market as a whole, but Apple will continue to capture the lion's share of that market.

Think about this: even if Apple sells 10 million iPods a year, that's still a fraction of the potential market. Worldwide computer sales around around 150 million a year, and music sales could easily approach, even surpass that. Think about it: love of music is nearly universal.

70% of a 14 million unit/year market is great, but 50% of 50 million unit/year market is even better from a top- and bottom-line perspective. And frankly, I don't expect Apple's share to drop that low.

So, even if Apple's share does decline a percentage basis, in a market that will only expand as a whole, they stand to gain no matter what.

Close Name:Billy K Posts: 297 Joined: 06 May 2004
Subject: OK - You Guys Can Have 100% of Nothing. Enjoy!

Yeah, Apple may only have, say 60% of the Market Share in a year, but I guarantee they'll be selling more units as the market for MP3 players continues to grow.

Oh, but we know how these folks work, don't we? the ONLY INDICATOR THAT MATTERS is Market Share. that's why Apple's gonna quit making computers soon. Very soon.

Right.

Would you rather have 100% of a 100,000-person market or 50% of a 1,000,000-person market.

Yeah. Thought so.

P.S. I won't even bring up the fact that once Apple gets the iPod Micro in stores, their Share of Overall MP3 Players will increase from the (what is it?) 62% it is now.

Close Name:Billy K Posts: 297 Joined: 06 May 2004
Subject: Whoops!

I just restated jimothy's point.

Sorry!

(It WAS a point worth making twice, I think.)

Close Name:Guest
Subject: Predictions

Apple 10% - 15% of 100 million annual sales by 2010

(Walkman only did 300 million because China, India etc weren't buying much personal tech back then).

iTMS 20% - 25% of download market by 2010 and more profitable than iPod.

From the other competitors I reckon Samsung may make the biggest challenge.

Close Name:jimothy Posts: 612 Joined: 04 Jun 2004
Subject: Billy K

You really think that Apple will quit making computers? I doubt it. I believe, as do others, in the "halo effect" and believe that Apple's Mac sales will only improve because of the iPod. Remember, the Mac is the hub in the digital hub.

Close Name:AFCdtLoeb Posts: 2533 Joined: 20 Jul 2004
Subject:

Say it with me now: "NOOOOOO!!!!!!! We're DOOOMED!!!!"

Close Name:AyaSofya Posts: 137 Joined: 11 May 2004
Subject: The plot thickens

Apple just introduced a color screen iPod that also holds photos

Close Name:jimothy Posts: 612 Joined: 04 Jun 2004
Subject: iPhoto color

The iPhoto color looks cool, but I'm surprised (despite the fact that the rumors stated this) that it doesn't have a built-in way to import photos from a digital camera card (compact flash, etc). I assume it'll work with Griffin's adaptor (or an updated version of it), but it still would have been nice to have it built in.

Plus, I had heard that the Griffin adaptor is excruciating slow (to the point of being unsuable) for large photos. I shoot with a 6 megapixel DSLR, and 8+ MP cameras are becoming common. It's precisely the avid photographer, the type shoots hundreds of high-resolution photos, that would benefit from the iPod Photo. Let's hope Apple and Griffin (or another accessory maker) work together to allow us to really take advantage of this cool new gadget.

Oh, and Apple and Griffin--just let me know if you'd like me to test out these things for ya!

Close Name:Guest
Subject: Could it be…

that Apples market share could climb even further? True $599 is a bit steep for most folks, and it's appeal may be limited to some degree, but it certainly helps lock up the upper end of the market. And with rumors abounding about a forthcoming microPod, Apple could just sweep the low end market aside and steal home right in front of Real, Creative, Rio, MS, and the rest of the has beens. Time will tell, where will you place your bet?

Close Name:Guest
Subject: How about this for comparison...

"There's no way Micros**t Windows could sustain more than 70 percent share over time. That's very very difficult to do especially when the product is based on a commoditized component, the personal computer."

Who could possibly argue with this?

Close Name:Guest
Subject:

Quote
Guest wrote:
Time will tell, where will you place your bet?


Buy Apple stock!! AAPL

Close Name:Guest
Subject: ipod store

this just says in your face analysts!

count the number of sleeves for one, and the number of ipod exclusive accessories. noticed too most accessories arre made for use with ipod controls or docking connector. no other competiting audio player has this mny accessories available - kinda like what pc users say anout mac games. still awaiting video capture but i think its onits way..

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