well, I am in AAPL for the Mac and OSX biz vs. ipod (I know a lot more about computer sales vs. small consumer electronics)- however, it seems to me that the problem any alternative is going to have is the itunes dominance.
The ipod+itunes relationship really is a bit of a monopoly. The itunes part of the business is really where the value lies imho (this is not conventional wisdom I understand)- Itunes is a superior media file file system, just for simple things like sort by artist,genre,title which is specific to media. For Zune to take hold they need a media file system also which they likely will have, but what about the content- for that they have 2 problems:
- current itunes monopoly and paid for content (this is like trying to move people from windows to mac)
- new music and record labels wanting more than $.99 which Jobs only got thanks to itunes dominance (msft could never get .99)
They seem to recognize the first problem which is why they have the "free copy" from itunes with some wireless mechanism. But that is not ideal- what would be preferable (for Zune) is that they went from itunes to Zune's window software application- because the computer is where Library resides, NOT the device. But that is impossible so Zune users will likely stay on itunes and zap their songs wirelessly. This is likely slower than the direct connect for itunes, and Zune still needs power from somewhere so it still needs to be plugged in to the computer (btw if Zune requires AA batterieslike many Creaf devices it will be a non-starter right there).
On the second issue of negotiating with record labels, I don't think there is any chance of getting .99 anymore.
Also, Urge was just started with MTV and has gained ZERO traction so the media that was slated for Urge has just been initiated into itunes. Conclusion: itunes is where the value is and its too late to be dethroned but just like Google, you are going to hear everybody and their brother say itunes is going down "any day now" to somebody or some such.
MTV-Microsoft duo takes leap onto iTunes's stage
By Hiawatha Bray, Globe Staff | May 17, 2006
boston.com
Apple iTunes makes deal with Microsoft's URGE partner for video (June 29)
tgdaily.com
IOW, Urge was a non starter and received ZERO traffic in a month, and MTV decided to hedge their bets. |
