You bring up a good point that the Rio sales to date may be largely to early adopters, so there is some risk that the Rio won't be the product that "crosses the chasm" into mainstream use.
BUT ... it appears to be the leading horse so far, and should be favored to win or at least place. If S3 becomes firmly entrenched with the everyday consumer, I would guess that, perhaps after some trigger event, this stock will start moving up almost vertically, setting significant new highs etc, until it reaches a level commensurate with the status of owning the primary media-less music equipment brand.
For example, if S3 can get music kiosks out there and/or music-downloading-devices (i.e. no computer required to operate) this will probably be key to getting the low-tech consumer onboard. It won't happen instantly, but it appears to have a good chance of happening.
My prediction is that once the everyday consumer is onboard to the concept of media-less music, then poof -- CD/minidisks/memory-sticks/ whatever media are INSTANTLY obsolete. And so are brick & mortar CD stores, unless they can somehow adapt to media less music (e.g. by becoming music demo studios/, kiosks where you can try-before-you-buy/download, or something like that).
In 5-10 years time, it seems clear that it's going to be a completely new world in regard to music distribution. I also agree with the comment that the tiny musicians have a lot to gain by bypassing the big labels, just like a tiny web site can distribute the news as easily as abcnews.com. Fortunately for S3, the big money is currently well invested in the "old way" of doing things, and instead of jumping on the technologies of the future, they are instead making what some might view as lame (and probably ultimately futile) attempts to retard change.
It is kind of like if in 1900 the buggy manufacturers tried to compete against autos by using all their dollars and legal muscle to get the posted speed limits reduced. A few early victories are possible and even likely, but inevitable they will be run over. And eventually, very few buggies will be sold. If the buggy manufacturers were smart, they would have become auto manufacturers. But they can't, because their leadership "knows what's right" because that's how they got to the top of their market, and if any more open minded individual at the bottom tries to tell them different they will set him/her straight. An over simplification perhaps, but perhaps a reasonable model of how this process actually takes place.
PS - Ditto for VHS tape movies and video rental stores, although S3 seems to be ignoring that market. |
