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Strategies & Market Trends : Gorilla and King Portfolio candidates - Moderated -- Ignore unavailable to you. Want to Upgrade?

To: Apollo who wrote (1460)	6/6/2005 2:18:45 PM
From: Eric L	Read Replies (2) \| Respond to of 2955

Apple: iPOD & iTUNES Apollo, << Applying GG principles, Apple is a King in this area, in that they dominate this MP3 player segment with 70% market share. >> I personally would put music players in the royalty family and position Apple as King. In the general category proprietary is giving way to open quickly. Microsoft inking deals with partners and OMA standards are opening it. << Gorilla or King, I am not sure, but others have not been able to provide a similarly robust, but simple experience. >> That has been key, along with its iconic design, and it could continue to provide them the differentiator that allows them to maintain greater than 2x the market share of their next nearest competitor even though they may have difficulty maintaining share. Apple is about to be challenged by converged devices from Nokia, Motorola, Samsung, LG, and Sony Ericsson, as well as stand alone devices from Samsung and LG (as well as Sony) and Microsoft wants a piece of the action. I posted a pretty good BW article on the subject a bit back: Message 21267777 I also added two posts on the subject on the 3G Wireless board here summarizing some TMF NPI conversations ... Message 21279704 Message 21283663 Currently the infrastructure to support converged mobile devices is lacking. We'll have to see where that is at 18 months from now, and I suspect Steve Jobs has a trick or two up his sleeve beyond the Motorola partnership. In the interim not everyone is going to want a converged device due to the tradeoffs usually attendant with same. Do you have a view on that or how Apple will fare against the converged device challenge? Never used an iPOD, myself. Best, - Eric -

To: Apollo who wrote (1460)	6/6/2005 2:38:04 PM
From: Eric L	Respond to of 2955

Apple Juice ... iPod and iTunes stuff ... >> Taking Care Of Its Core June 6th 2005 The Economist Global Agenda economist.com <snip the Apple Intel news which is interesting in and of itself> In mid-April the firm announced another blistering set of quarterly results: revenues up by 70% compared with the same period the year before, and net profits 530% higher, at $290m; Apple shipped over 1m computers (a 43% rise) and a staggering 5.3m iPods (over six times more than the year before). The iPod has done wonders for Apple, providing not only profits but a positive brand image to a swathe of new young consumers. Though the iPod was derided by some as exorbitantly expensive at the time of its launch in 2001, it has amassed some two-thirds of the world market for hand-held music devices. And not content with anything less than total domination, in January Apple introduced the iPod shuffle, a flash-memory player, which is naturally smaller and better looking than anything the competition can yet muster. No wonder iTunes, Apple’s online music store, leads the field. The lead that the iPod has in the hand-held music player market looks unassailable for the time being. That said, Bill Gates is touting Microsoft’s own software format, Windows Media, to several online music services and hardware firms, hoping to set a rival standard with greater interoperability. At present, iTunes offerings only work with the iPod. Mr Gates suggests that the convergence of mobile phones and music players (using his software, of course) could threaten the iPod’s dominance. Apple should take the threat seriously. Nokia recently announced that it was preparing to launch a handset with a hard drive. Sony Ericsson will unveil its first Walkman phone later this year. To counter these threats, a deal between Motorola and Apple is expected to spawn phones with iTunes included in a couple of months. If Apple is to make the most of the halo effect from the iPod to push its upmarket computers on greater numbers of customers, it would be well to do so as soon as it can. Such is the importance of the iPod to Apple that on June 3rd the firm’s shares fell by 4.5% after analysts suggested that sales of the device may be flat in the current quarter. If the halo slips, Apple may have to content itself with selling its wares just to the select, fashion-conscious bunch who presently make up the company’s loyal fan base.