Microsoftis rumored portable music player and download service has many analysts concerned about the future of the iPod and iTunes Music Store. American Technology Research analyst, Shaw Wu, says the threat that Microsoft poses to Apple is overblown. The bigger threat, he says, is to the current crop of iPod competitors, including Creative, Sony, Samsung, and MTV Networks, in both in the hardware and software arenas.
Appleis well established iPod and iTunes Music Store (iTMS) combination has a firm hold on the market thanks to product ease of use, design, brand name, and efficient supply chain. In contrast, Microsoft has never been successful with the vertical market approach that Apple is using. To date, there are about 50 million iPod users, and 300 million iTMS users.
Mr. Wu says that Apple has "arguably the industryis most powerful and complete stack of hardware, software, and service in PCs and the digital entertainment space."
Looking forward, he thinks that Apple is working on a broader entertainment strategy that goes beyond the iPod and iTMS.
Microsoftis entry into competition with Apple and the iPod isnit likely to turn a profit for the Redmond, Washington company. Products like the Xbox have not been big revenue generators for the company, and itis unclear if Microsoft is willing enter another unprofitable business.
American Technology Research is maintaining a "Buy" rating on Apple stock. Apple is currently trading at $58.02, up 0.82 (1..43%).