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Apple to counter Zune with innovation

updated 03:00 pm EDT, Mon July 24, 2006

Apple to counter Zune

Analysts are expecting to Apple to respond to Microsoft's forthcoming Zune iPod rival with new features and more innovation. Bear Stearns Equity Research analyst Andrew Neff, who maintains an 'outperform' rating on Apple with a price target of $88, said that while Microsoft's Zune offering will pose a "clear challenge" to Apple, the company will likely respond by adding new features to the iPod. Specifically, the analyst is looking for innovations to Apple's iPod in four areas: wireless, content, storage, and platforms, according to a research note obtained by Forbes.com. Ironically, another analyst said that Microsoft's rumored inclusion of Wi-Fi technologies will limit the device's battery life, while other industry watchers believe that Zune will hurt Microsoft's partners and has little room to succeed.

"Apple needs to be leading edge in these areas," the firm told clients. "The competition is not new -- there are plenty of music players and music downloading services but the challenge for any tech company is to obsolete your products or someone else will," Neff wrote in his report. The firm maintained fiscal 2006, 2007 and 2008 earnings-per-share estimates for Apple of $2.16, $2.70 and $3.15, respectively.




by MacNN Staff

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  1. jpellino

    Joined: Dec 1969

    0

    bluetooth syncing +

    + iTunes-like sharing. Let's hope apple has it on the next release of everything. they need to regain the days of really simple usb (shuttle) and pretty simple firewire (original ipods) syncing. Since the maze of adapters and docks and has gotten longer each iteration, a simple elegant solution like BT syncing would go a long way. PS - MS please don't read this.

  1. testudo

    Joined: Dec 1969

    0

    Analysts

    We all know analysts don't know what they're talking about. Apparently another prime example.

  1. testudo

    Joined: Dec 1969

    0

    Re: bluetooth syncing

    + iTunes-like sharing. Let's hope apple has it on the next release of everything. they need to regain the days of really simple usb (shuttle) and pretty simple firewire (original ipods) syncing. Since the maze of adapters and docks and has gotten longer each iteration, a simple elegant solution like BT syncing would go a long way. PS - MS please don't read this.

    Yes, because what would be slower then USB or Firewire syncing, that's what apple needs! And what do you mean the "maze of adapaters and docks". Apple has used only three type of connectors on all their ipods. The first was a straight Firewire connector. They changed that long ago to the dock connector. The third is a USB connector for the shuffle. Not exactly a myriad of connectors.

  1. Glasspusher

    Joined: Dec 1969

    0

    innovation?

    Come on, when did innovation and good products ever succeed over intensive t*** polishing, and we know the master t*** polisher is M$.

  1. wings_rfs

    Joined: Dec 1969

    0

    Tabloid Headlines

    The headline caught my eye.

    "Apple to counter Zune with innovation"

    It looked like someone had the inside story on Apple's reaction to the Zune. But no, just another analyst's opinion (and a flaky one at that). So, MaCNN, what are you doing? Trying to imitate the grocery store tabloids or something?

    When you create your headlines, make it accurate, or I won't be trusting the content either.

  1. Clive

    Joined: Dec 1969

    0

    Analysts say…

    …put your hands on your head.

    Analysts say, put your hand in your pocket.

    Analysts say, give me all your money.

    Who *cares* what these "analysts" say, all they are trying to do is drive the stock up so they can dump what they are holding. Then in a few months they'll be talking it down, so that they can "short" it.

    Why does MacNN publish so much of this bollocks?

  1. kw99

    Joined: Dec 1969

    0

    How to "counter"

    something that does not exist. Don't even bother, Apple...

    WI-FI for a laptop is a great feature. Computers need continuous connection to the Internet these days, and wireless is a great way to do it for laptops. But is it really necessary for a music player? An iPod does not need continuous network connectivity to do its main thing, play media files. No, it needs to be as thin and light as possible with max battery power. Plus, any home with WI-FI is likely to have a modern PC or Mac. Surely, it's not too tedious to plug in your iPod once every few days to (1) recharge it and (2) sync the media library.

    Does MS expect its Zune user to go to an Internet cafe every time they want to add songs? How does a Zune user add music from a CD collection? How does a Zune user back up purchased media in case the Zune breaks or gets lost? You say they do it with a PC. Oh, so they have a PC. Then why is WI-FI such an important feature on a music player.

    It's important to think through how a user uses their iPod. I predict Apple WILL think it through and NOT find WI-FI to be a compelling feature for an iPod, just like radio is not a compelling feature.

    Instead, I think Apple will create a (wired) "bridge" accessory for people who want to use an iPod without computer. It will basically play the role of the computer running iTunes, but do so without the complexity and expense of a computer. In other words, the iPod user can rip CDs, burn CDs, backup media library, and access the iTunes Music Store (probably through direct dial-up connection since such a user would not have broadband) using the "bridge." Since the next gen iPod is reported to have a larger screen, while connected to the "bridge," it will provide the visual interface and user input (taking the place of the computer display and keyboard/mouse). While disconnected, it is just an iPod (small, thin, and elegant), doing what it does best.

    Customers who have a PC or Mac would not be burdened with the cost and bulk of having a music player with built in WI-FI AND the processing power to run networking, Internet, and media store software internally. Customers who want to use an iPod without the need for a PC or Mac can buy the "bridge" accessory.

  1. bigpoppa206

    Joined: Dec 1969

    0

    Zune???

    Remember this means NOTHING to the Mac community since everything they are doing will only work on PCs with Windows XP. Even Apple decided to bury the hatchet and make nice with the other side.

    And all music files will be WMAs! WTF? As if thats a better format!?!!

  1. notehead

    Joined: Dec 1969

    0

    let's just watch...

    Honestly, Apple could buy full-page ads in every major paper, saying "Hey Zune, we'll take a vacation for 6 months. Give it your best shot." and MS will still lose this fight. The arrival of Zune will probably have very little affect on Apple's development of the iPod, which is driven quite energetically by the simple desire for market expansion and the desire for innovation which is an inherent part of Apple culture.

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