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

To: Apollo who wrote (1483)	6/9/2005 1:53:52 PM
From: Eric L	Respond to of 2955

Microsoft and the World v. Apple Apollo, << Thanx for helping me better understand Microsoft's commitment to this. >> Thank you for bringing the subject up. I'm enjoying the discussion. Prior to you doing that I had been approaching it from a different angle -- digital convergence (including WiFi and Bluetooth) and music as major potential enablers of 3G wireless technology adoption, and really hadn't focused on the standalone market for music players. This has led to some interesting discussion here. The announcement of the Nokia-Loudeye deal last summer (which I couldn't really figure out at first), and especially the Nokia-Microsoft deal in February that relates both to the multimedia consumer and enterprise side of Nokia's businesses really caught me by surprise and focused my attention. I hadn't been paying all that much attention to what Microsoft was doing in consumer multimedia space. That deal was very healthy for broadband 3G wireless but not necessarily for Apple. The old silverback has been involved in serious strategic planning, R&D, licensing, marketing, and expansion of its value chain. It's also in a mood to compromise where necessary on their proprietary open v. comittee-based open standards to meet its long term strategic objectives. << Microsoft is branding the anti-Apple/iPod approach. Clever, if it catches on. >> It is the second most valued brand in the world next to Coca-Cola. Interbrand gave it an asset value $61 billion last year, By contrast they ranked Apple 43rd with an asset value of 6.8 billion although I suspect Apple will move up this year on the strength of iPOD: businessweek.com That nicely designed 'playforsure' logo will have some pull. Add that logo to a Nokia (8th,) Samsung (21st), or Dell (25) brand and you have a powerful co-branded device, but it will work well with lesser known brands. I'm curious to see if Nokia and Samsung co-brand. << Walter Mossberg ... has periodically reviewed MP3 players, and indicated lately that the competition is closing in on Apple's iPod. He liked the Dell competitor, as I recall. But, in the end, he concluded the iPod was still the superior choice. >> He's not alone. They are deservedly not only the market builder but the market leader and all of the iPODs get solid reviews. Not only have they designed an iconic product (iconic products), but they have a well thought out end to end solution and as you have mentioned have built a strong value chain, and for their consumer customer there are high switching costs. They will not be easy to dislodge from their perch, and could well maintain 2x the market share of their next closest competitor at least with HDD units for some time. The availability of audio accessories for the iPOD is very powerful. The BMW kit is available dealer installed, but there are many was to connect into many vehicles audio system with the best and most expensive option being to connect into the multi-disc CD player output if you are so inclined - I'm not, and my wife's superb and iconic McIntosh system in her Outback doesn't have one with adaptors like this one: carplayer.com [Thanks to psylent in a very goog post for calling my attention to that aftermarket capability from several vendors] << Now all we need is the hardware and software that would prompt people to switch >> When you talk about switching costs and switching in general, I think it is wise to keep in mind that the global iPOD subscriber base of perhaps 20 million users is really quite small compared to the potential base. Music Players are mass market but it's the tip of the iceberg. It is darned hard to find a mid-range feature phone or smartphone today that is not an MP3 player and for many that phone will be their 1st music player and will tempt many to either purchase a higher end music-centric converged device and accessorize it or even supplement it with a stand-alone player. Switching costs are back in play here. Someone who has spent money accessorizing a Nokia, Motorola, or Samsung mobile with Bluetooth devices like this one is going to make sure his next purchase is compatible with it: tinyurl.com I may not be an MP3 laggard for long (although actually the WorldPhone I use for travel abroad has an MP3 player, albeit with poor mono audio quality). The availability of that particular accessory and a Bluetooth handsfree car kit for the N91 combined with the Symbian OS, the 4GB HDD, Class B, multislot class 10 EDGE and 802.11b/g/I WiFi, 2 megapixel and probably a Windows Media Player 10 client. The only thing missing at the moment is a Bluetooth car kit allowing the device to play through the cars audio system. I doubt that will be far behind. I've been a Verizon (via) BAM customer since 1992, and CDMA customer since early 1997 but I could well be on Cingular subscriber next year because of this device which will enable me to also cancel my VoiceStream subscription. For those that want to follow the MP3 scene, this is a very good site and it has good reviews: mp3.com Check out the MPS Player Bouts: mp3.com iPOD generally comes out on top, but ... I'll be tuned in to Apples FQ3 conference call, for sure. My 1st ever. Best, - Eric -