Apple: The IBM of the Digital Music Player Market

I suppose it is too early too call the iPod Shuffle a monster hit. Still the signs of yet another smashing success in the musical arena are there, you have the rapid sell out of two thousand iPod Shuffles at the San Francisco Apple Store coupled with waiting times ranging from two weeks to a solid month if you order one online. Actually these are probably not the best signs of success for the diminutive Shuffle. San Francisco had about as many Apple loyalists running through the streets on the day of the Shuffle’s release as a hound dog has ticks in mid-July. The wait to get your hands on a Shuffle isn’t all that telling either because, honestly, Apple is not known for actually being able to supply products in a timely manner if they actually excite people (I note iPod socks feature same day shipping). So it may be premature to call the Shuffle a major player.

On the other hand I’m willing to go out on a limb and say that I think the Shuffle will be a   fairly huge success. There are plenty of reasons to think the gum pack sized musical repository will generate huge demand. Pick up a shuffle and you’ve got a decently sized flash drive that also plays music, sure it costs a little more than the cheaper flash drives but they don’t play music. Wouldn’t it be groovy to carry your files home from work and listen to your tunes using the same device? Well it’s never a happy occasion when you have to work on your own time but perhaps listening to sixty of your favorite songs will mitigate the unpleasantness. On the other hand you can do that with a plethora of music players so perhaps there is something more alluring than just the tiny size and utility of the Shuffle. Most people will argue that that something is two fold. First it is a really low priced iPod. The second, and probably most appealing thing about the Shuffle is that it works with iTunes. Wow when you think about the Shuffle you realize you get it all for decidedly non-Apple prices: utility, iPod coolness, ease of use, and iTunes integration. All these features add up to an impressive combination. Those are the obvious reasons to predict success but the real reason the Shuffle will make like Bruce Banner and turn into a monster is simply because it is from Apple.

Not everyone agree with my assessment. A fact which comes as no surprise, with the exception of the universal loathing of Spam there is probably not a single all pervasive opinion. With any product from Apple you can always find rabid, frothy opinion that whatever Apple introduced was overpriced and substandard on a variety of message boards. With the Shuffle (and more generally the iPod) you don’t have to hit the message boards. Instead of hitting the sixth grade locker room (and isn’t that what nearly every message board resembles after about a week? All argumentation is gone and people just snipe about each other’s sexual orientation,) all you have to do is wait for the CEO’s of major companies to weigh in.

First let us begin with the CEO of Creative Mr. Sim Wong Hoo. When discussing the Shuffle Mr. Hoo opined:

“Actually, to me it’s a big let-down: we’re expecting a good fight but they’re coming out with something that’s five generations older. It’s our first generation MuVo One product feature, without display, just have a (shuffle feature). We had that—that’s a four-year-old product. So I think the whole industry will just laugh at it, because the flash people—it’s worse than the cheapest Chinese player. Even the cheap, cheap Chinese brand today has display and has FM. They don’t have this kind of thing, and they expect to come out with a fight; I think it’s a non-starter to begin with.”

That’s corporate speak, allow me to translate:
“I can’t believe Apple is going to kick our assets with this!”

Mr. Hoo knows that the Shuffle is going to take serious market from Creative’s flash player offerings but he is befuddled as to why. Actually I share Mr. Hoo’s bewilderment, I’m sure that his point is accurate, that the Shuffle does in fact compare poorly on paper to Creative’s players. It’s a familiar feeling to Mac users throughout the years. I felt it when Windows 3 came out and everybody rushed to buy it. “Why,” thought I “Would people go crazy nutso over something so clearly inferior to the Mac?” On paper it made little objective sense but since consumers pay with the only paper that matters (the green stuff) point-by-point comparisons really don’t count for much. Honestly, even if Creative’s players were iTunes compatible they would still be trounced by comparable iPods. And it’s more than just the iTunes store, iPods still reign supreme in countries without an iTunes music store.

Of course Mr. Hoo knows the digital music player market so I take his comments a little more seriously than other corporate types who clearly don’t understand what drives folks to buy aforementioned wonders of miniaturization. I was left shaking my head when Dell CEO Kevin Rollins produced the following nugget of wisdom:

“‘It’s interesting the iPod has been out for three years and it’s only this past year it’s become a raging success. Well those things that become fads rage and then they drop off. When I was growing up there was a product made by Sony called the Sony Walkman - a rage, everyone had to have one, well you don’t hear about the Walkman anymore. I believe that one product wonders come and go. You have to have sustainable business models, sustainable strategy.”

First off the iPod is not just a recent success. The iPod has been successful from day one. Secondly the iPod is not a fad (nor was the Walkman). A fad is Pauly Shore, a fad is Pogs, a fad is Beanie Babies. Unless people suddenly stop buying music online and stop listening to music outside of their house the iPod is much more than a fad. I’m not going to say that the iPod will always be the superlative digital music player on the planet but it has defined an entirely new modality of buying and playing music. I have to ask Mr. Rollins: Just what are you saying? Oh wait, I forgot Mr. Rollins is using corporate speak. Let me run his comments through a translator. The result:

“Jiminy Christmas, where am I gonna dump all these Dell DJs?”

Yet another case of an executive completely stymied as to the reasons behind Apple success. He’d rather blame fickle faddism than the failure of his company to produce a viable competitor to the iPod. I empathize, I would rather think that writers pulling in long green were just luckier instead of flat out better than me but, obviously, that is not the case.

So what is the reason behind the Shuffle’s impending success and the iPod’s continued to success? It is not a simple matter of comparing specs, or a masterstroke of marketing. Instead it is the success is owed to Apple’s long hard slog in the desktop computer world. Consumers would see Apple’s nifty PowerBooks, excellent desktop designs and they would be attracted to them. Yet they found the price of admission was steep and carried with it the seemingly daunting task of learning a new way of computing. Sure folks would hear year after year about the Mac’s ease of use and increasing compatibility but it was never quite enough to push them over the edge. When music players first arrived (and remember the iPod was not first to market) people had misgivings. The new devices might not work very easily, the players might not sound very good, and the things might not catch on. When Apple entered the digital music player market it legitimized the market. Apple was a company people felt they could trust and a company with a market presence that guaranteed the iPod would remain relevant for some time. While it may sound like a remarkable achievement this is not an unusual occurrence, followers of technology have seen this exact scenario play out time and time again. The most memorable example of consumers behaving in exactly this manner occurred way back in 1981 when IBM entered the personal computer market. Those with long memories remember the intro of the IBM PC and remember how everyone suddenly thought “Hey, these computer things must be catching on if a real company is making them.” For a time after that IBM owned the market. Likewise I suspect Apple will own the digital music player market for quite some time.