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FreeiPodGuy's iPod News

Sunday, August 28, 2005

Apple no longer the underdog?

Almost since its establishment, Apple has been the underdog in the computer industry. This has brought both ridicule (because it came to be known as non-standard in an industry where standards are very important) and praise (because some people are consistently drawn to what others scorn).

This remains the case with computers. However, Apple is the undisputed king of portable music players, with iPods having about 80% of overall market share, and a whopping 91% share of hard-drive-based players. Though Apple does not have a monopoly (since there are other sellers, and nothing prevents new manufacturers from entering the market), the vast majority of MP3 players are iPods.

In light this, how do we explain the fact that there are so many holdouts against the iPod? Obviously Microsoft actively competes against it simply because it doesn't support their WMA format and they won't be happy with anything short of total world domination, and other manufacturers try to put down the iPod at every opportunity. However, there are other examples of people being strangely obstinate against it.

For example, some college campuses have tried to cut down on the use of their networks for illegal song downloading by making deals with competing services like Rhapsody, Ruckus, and Napster. Perhaps these decisions are based solely on economics--just as Apple has used aggressive pricing to get its computers into educational institutions, iTunes competitors have made deals with colleges to provide services at reduced costs in exchange for exclusivity agreements.

Similarly, some libraries have begun offering downloadable audiobooks, but they are rarely iPod-compatible. Some may overlook this, because they have grown accustomed to writing off Apple as irrelevant. However, the iPod is a whole new ballgame. Offering iPod-incompatible downloads automatically eliminates 80% of potential users. Though most people use WMA-friendly Windows, desktop computers are not where people listen to audiobooks. They listen to audiobooks on the go, and 80% of users on the go are going with iPods.

At least with regard to American University, they have found that their plan didn't work. Most students looked into the services at the beginning of the school year, but then decide not to use them (which means they no longer have the incentive to avoid illegal downloads). Why? "The complaints were you couldn't burn music for free, you couldn't put it on iPods," said Bill Raduchel, chief executive for Ruckus, which provides music to more than a dozen universities.

However, part of the problem might simply be misinformation from Apple competitors. According to Raduchel of Ruckus, "No legal service is going to meet that need [the desire to burn CDs and put music on iPods]." Obviously this is untrue--iTunes allows liberal CD burning, and is custom-made to work with the iPods, and Raduchel surely knows it.

Many people are now predicting that iTunes and iPods market domination is not sustainable. However, it could be that if it loses substantial market share, it will be because services have unnecessarily avoided the iPod, and not the other way around.
 

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