Apple's competition heats up for the holidays
updated 02:00 pm EDT, Mon August 22, 2005
Apple holiday competition
Apple's competitors Samsung, Sony, MSN, Creative Labs and others will turn up the heat this holiday season hoping to seize some of the market that has been dominated by Apple since the birth of the iPod revolution. Apple currently commands 80-percent of the MP3 player market and 75-percent of online music sales and with the debut of podcasting generated two million subscriptions in less than a week. Senior research analyst Gene Munster of Piper Jaffray, however, commented that "it's pretty much impossible" for anyone to sustain an 80-percent market share in a consumer electronics business for more than two or three years. Record executives are eagerly awaiting the increased competition, because spells a more robust market for digital music, according to Reuters.
Apple simply disregards the labels suggestions for acquiring new digital music customers, requesting more flexibility on track pricing and promotions. The iPod still outsells all of its competition by 3-to-1, contenders such as Sony and Samsung will need to leverage their global brand identities and revenue from other consumer electronics products to fund the fight for market share.
Sony is expected to relaunch its failed Connect digital music store, as Sony is one of the few companies in a position to offer an integrated device and service similar to Apple's iPod/iTunes combination. Sony, Samsung, MSN and others are expected to unveil new products and services just in time to market them for the upcoming holiday season, putting further pressure on Apple as the heavy spending season ensues.
MSN Music is expected to offer a music subscription service, followed by an aggressive advertising strategy. Sony will likely roll out several new MP3 devices and the introduction of mobile music services from several wireless carriers, this in addition to its Connect digital music store.
Apple is expected to fight back, putting more pressure on competition and using its strong position in the market to maintain the lead. A video-capable iPod is expected some time in September, and an iTunes-compatible mobile phone from Motorola is expected in the near future.
