Taking on Apple

The Arab Times writes about Apple's current dominance in the digital music and MP3 markets and the efforts other companies are taking to chip away at its lead.

According to the article, "Apple commands 80 percent of the MP3 player market and 75 percent of online music sales." However, the market penetration for MP3 players is only 11 percent of U.S. households and some analysts predict "Apple's reign will last only another 12-18 months before the playing field levels out."

Piper Jaffray analyst Gene Munster said, "It's inevitable that over time their market share declines. It's safe to say that nobody can sustain an 80 percent market share in a consumer electronics business for more than two or three years. It's pretty much impossible."

Munster then added that "The mass market still is entrenched in a non-MP3 world, Until that changes, there's just too few iPods out there to move the needle for the overall music industry."

The article notes that the music industry is hoping company's like Sony, Samsung and Creative and music services from other companies like Microsoft will be able to knock Apple off its perch. Gartner analyst Mike McGuire commented, "There's a whole lot of green field out there. Some people at labels are acting like all this is over because Apple has it. Guys, 98 percent of music purchases (are) still coming from somewhere other than online."

However no one is counting Apple out. "They have shown, based on prior performance, that they have the capability to remake themselves. They have the flexibility to seize opportunities as they're presented," McGuire remarked.

Very true. While other companies focused on countering Apple's HDD-enabled iPods with models that were "bigger and better", the company cleverly shifted direction by offering the Shuffle at only $99. This mass market price point was critical for driving greater adoption and penetration of the iPod and iTunes and getting both into the hands of consumers who were before priced out of the market. However with new entries from Sony and Samsung hitting the market, the battle for consumers marketpace has only just begun...