AAPL Getting Challenged
I predicted a while back that Apple would face problems with iTunes because GOOD and YHOO can easily afford to offer free downloads.
Turns out, my crystal ball was working that day. GOOG just announced free movie downloads.
http://biz.yahoo.com/bizj/060623/1306639.html?.v=1
It's limited somewhat, the point is that iTunes dominance is very fragile. Supposedly Microsoft also has an iTunes killer ready for release.
I do not think that there are iPod killers yet. In his recent Sony presentation, Stringer did not debut a Sony pod. Maybe Apple, Sony and possibly others are saving their energy for the holidays. I don't care - all signs are that iPod market penetration has been successful and saturation is coming sooner than later.
With iTunes looking ripe for competition and with the iPod sales growth slowing, it's no wonder that Apple advertising is re-focusing instead on the Mac. Remember those great U2 ads for the iPod? Gone. Now it's Mac ads only. And those ads are great - effectively highlighting the advantages of Mac.
I do think it will work to Apple's advantage. I also think that expanding sales channels (Apple is going to sell through Best Buy) is a smart move that can only pay off.
Yes, I think Apple is executing fabulously - the iPod jump started interest back into the Mac. The only weak points are:
1. iTunes sales challenges: non existent challenge this quarter and possibly next.
2. iPod sales slowdown faster than expected: this is possible and likely, but the financial impact is less than the perception
3. Mac sales uptake less than expected: this is the wildcard. I am convinced that they will successfully challenge other PC makers for the consumer market. But Dell and HP will put up a very convincing fight. The guts of Macs and HP PCs are identical, for all intents and purposes. It's only software, and that software is costing at least $500~$1000 extra.
Turns out, my crystal ball was working that day. GOOG just announced free movie downloads.
http://biz.yahoo.com/bizj/060623/1306639.html?.v=1
It's limited somewhat, the point is that iTunes dominance is very fragile. Supposedly Microsoft also has an iTunes killer ready for release.
I do not think that there are iPod killers yet. In his recent Sony presentation, Stringer did not debut a Sony pod. Maybe Apple, Sony and possibly others are saving their energy for the holidays. I don't care - all signs are that iPod market penetration has been successful and saturation is coming sooner than later.
With iTunes looking ripe for competition and with the iPod sales growth slowing, it's no wonder that Apple advertising is re-focusing instead on the Mac. Remember those great U2 ads for the iPod? Gone. Now it's Mac ads only. And those ads are great - effectively highlighting the advantages of Mac.
I do think it will work to Apple's advantage. I also think that expanding sales channels (Apple is going to sell through Best Buy) is a smart move that can only pay off.
Yes, I think Apple is executing fabulously - the iPod jump started interest back into the Mac. The only weak points are:
1. iTunes sales challenges: non existent challenge this quarter and possibly next.
2. iPod sales slowdown faster than expected: this is possible and likely, but the financial impact is less than the perception
3. Mac sales uptake less than expected: this is the wildcard. I am convinced that they will successfully challenge other PC makers for the consumer market. But Dell and HP will put up a very convincing fight. The guts of Macs and HP PCs are identical, for all intents and purposes. It's only software, and that software is costing at least $500~$1000 extra.
posted by Andrew at
10:45 AM
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