updated 04:25 pm EST, Tue March 21, 2006
Apple\'s iTunes challenged
Apple's lead in the digital music and video markets may be challenged by possible new services from Google and MTV, as well as mobile phone carriers and Apple's own stubbornness. According to CNNMoney.com, one analyst believes that Google will enter the online music industry with the launch of "Google Tunes." Bear Stearns internet analyst Robert Peck said the new Google offering could be launched in the next few months, although others believe that other services pose little risk to Apple. In addition, the report says that there has also been speculation that Google could buy its way into the market through a purchase of iTunes rival Napster. Meanwhile, one independent research firm believes that mobile phone networks pose a threat to Apple as well, while Forrester Research technology analyst Ted Schadler believes that Apple's iPod marketshare numbers are distorted and that it will need to build an all-in-one digital device to compete with offerings from competitors.
"Our data shows that Apple's share of the MP3 player market is not as big as they would lead you to believe. Nobody reports figures from Wal-Mart and a lot of non-iPod devices are sold there. There is a market for non-iTunes music," Schadler told CNNMoney.
Leigh also said that Apple's reluctance to explore other models, such as a monthly subscription service, would hurt the Cupertino-based company in the long run because "the music industry might find that the subscription model is more attractive to them. So that could make record labels more inclined to work with other partners."
"Apple's dismissal of the concept of a music subscription service is a weakness. Music stores that are providing unlimited services for a monthly fee are consistently discovering that consumers are using the service more intensively to discover new artists," Leigh said.