Has Apple Hit a Wall in Music Innovation? 22 comments
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Well, Apple's (AAPL) big "Rock" event today seemed pretty disappointing. Some new iPods that aren't much different from the old iPods, a little sleeker iPod Touch, some new pricing. No surprises. Nothing awe-inspiring. Apple stock dropped 3% during the show.
Worse, maybe, were the things Steve Jobs made a big deal about. For instance, there's the Nano's "shake to shuffle" feature -- shake the thing, and it goes to the next song. Interesting but hardly a killer feature. Hope it can be turned off. One good subway ride in New York and you'd skip halfway through your playlist.
Another new feature is called Genius. It's supposed to gather meta-data from millions of iTunes users, seeing what songs they group together in playlists. From that, Apple can smartly recommend songs or group similar songs from your own playlist for you. I'll be interested to try it and see how it does, but on the face of it, Genius doesn't seem to take the state of the art any farther than services like Pandora and iLike.
The iPod and iTunes made their debut in 2001. They both have evolved, certainly. But other than adding a video-capable screen, the changes have mostly been in iPod's form factor, capacity and price. On the iTunes side, the major change has been the addition of video products. Arguably, the iPhone -- with its built-in Wi-Fi, which negates the need to connect to a computer to buy songs -- is the most innovative change Apple has come up with in music in seven years.
Apple still has 72% of the digital music player market and still has the most beloved set of products out there. Zune, Rhapsody, SanDisk and other digital music offerings are but a business pimple on Apple's butt right now -- but judging from Apple's event yesterday, some of those pimples are coming up with more interesting ideas than we're seeing out of the market leader. Sales of iPods are already flattening out. If Apple's not careful, it's going to lose momentum in music.
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This article has 22 comments:
The genius feature of device and software, however, will end up being one of those features that further cement Apple's grip on the market. My breakdown is thus - I put most of my library on my iPod (120GB) and 98% of the time shuffle my list. But, I am constantly skipping to the next song because random lists don't match any single mood (e.g. Classic Rock sing-along cruising around town, Psychedelic Rock when I'm working). Using multi-user heuristics is what I've been really waiting for. Something that puts compatible songs next to each other. I hope that the software watches for how long each song is played and downgrades skips and bumps songs played in full.
But, the really big news is the return of NBC. Both NBC and Apple both had to compromise, but the return of the NBC programs proves to the world that NBC couldn't overlook iTMS as a necessary outlet for their content. It's another stone in the wall preventing other services like Rhapsody from taking hold, while cementing content developers into the iTMS marketplace. I think Amazon will hold its own for downloads and on-line CD sales and Walmart will remain the hard copy leader, but in a year or two, if not sooner, no one will go to Rhapsody, Zune MP, or Napster, and all traffic will be to iTMS or YouTube.
It doesn't need wifi. Parents don't want their kids browsing and chatting at school. If they want that, they can get their little spoiled baby a touch.
It needs to look cool. The new Nano looks great.
Now Apple needs to really work on it's partnerships with the music companies and artists. They've got a great portal, but not everyone buys into the model.
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Apple does NOT have to have a revolutionary announcement at EVERY product refresh event.
NOBODY has the capability of iTunes, the simplicity and convenience of iPod software, and the consistent incremental improvements of the Apple mobile music line.
The problem here is that YOU are the one that LACKS vision, imagination, and market expertise, NOT Apple.
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The iPhone is an EXCELLENT mobile music player. The iPod is for people who DON"T have an Apple iPhone, or for iPhone users who want an extra large iPod (120 GB iPod Classic), or for those who do want a separate device (iPod Nano) for their music.
I commute into NYC almost every day, and MOST of the BlackBerry, Nokia, Samsung, LG, Palm etc mobile phone users are carrying iPods! Even these Apple haters know the best mobile music players are made by Apple. And, the new iPods with the enhanced software and enlarged display will bring in more sales.
There are over 6.5 BILLION people on Planet Earth. Yet, only a total of 160 million iPods have been sold. Everyone will want a mobile phone and/or a mobile music player.
Among common, universal human desires and pleasures are music and communication. Apple has the best and the most user friendly. Apple will sell a lot of iPods and iPhones.
I think there's still room for new features. Wireless sync would be a big one. Apple is expert at rolling out new features over time, when they need to.
Genius IS genius. Shake is fun, and the prices are going to make iPods leap from the shelves.
After all - no-one else comes anywhere close.
Wireless sync would be nice, sure. But not too necessary, I say. After all, you have to plug a cable into the iPod anyway for charging; consolidating that with the sync function is efficient. (When we get wireless *charging*, things will be different!)
Anyway, nothing revolutionary about today's 'Pods, but that's OK. The new models leapfrogged over MS's recent Zune yawners and Sony's latest Walkman announcements, and sometimes that's all that's needed.
I'm also looking forward to October's hardware product announcements. I believe Apple is smart to break up the announcements and roll outs.
Apple has 4 thriving businesses: iPods; Computers; Software & Content distribution; iPhones
There are companies that are successful with just one of these lines. Apple is successful and highly profitable in ALL of these endeavors, owns 2 of the markets, and is on it's way to owning another.
There is no company that is comparable to Apple at this time; you would have to combine Microsoft, RIM, Amazon, HP, Dell, Nintendo, & Creative all in one, to have a company that even comes close to compare in what Apple is doing right now as a single efficient & profitable company. This is simply amazing, IMO.
Apple is highly undervalued and is a Strong Buy.
They have the hardware and software in place with the touch, they're just holding it back as a must have feature for a new model down the road.
I've got a few iPods, I'm not going to keep them all plugged into a computer.
That's never been Apple's tag line... people don't buy innovation, they buy "it just works", they buy "beauty" & "art", they buy "cool", they buy its "simple & easy to use", they buy "quality", they buy a "trusted brand".
Think Different.™
Thanks for bringing up the Apple TV. I have one - it syncs over wifi and that's all the more reason why my touch should too.
Taking it another step further, let me grab podcasts from the cloud when I'm out and about. I shouldn't have to rely on my computer to download them. We'll get there...
Usually such a claim should be accompanied with a few examples...
With "the funnest iPod ever", it appears that Apple is aiming to take some market share from Sony and Nintendo this holiday shopping season.
Disclosure: Long AAPL, MSFT, SNDK
But, really, as a long-term focused investor, all I REALLY want to know is how many Macs they sell each quarter. MSFT is still desparately holding on to 90-ish OS market share. They won't forever.
But the real story of Apple is not the iPod or the iPhone but the Mac which is literally taking over the laptop market (especially and even in the 'enterprise' market) and doing quite well in the consumer desktop as well.
And these media people have the nerve to say these Apple products fall below their expectations. Is it because the other companies offerings are so much better or less expensive? Do the other companies products last longer or have better finishes? These Apple products seem fairly elegant to me. Maybe they don't have the hardware features or codecs that come with a top Archos media players, but you can't exactly fit those devices in your pocket as easily. Apple just went with small size and ease of use.
Any product can fail to meet expectations if they're going by what can be dreamt about in a world where money is no object, but how can Apple produce affordable products and still have every feature you can imagine in a slim, pocketable product.
I think the new Nano is a work of art. I much rather prefer having a Touch, but that Nano seems to be a very classy handheld media player in a rather small package. I'm having a hard time figuring what people actually expect each year from Apple when most of the other tech companies are barely keeping up with Apple in the handheld media market.
On the other hand, I will be content with the "genius" playlists, Nike+, speaker and audio input on the new iPods and iTunes 8 with the new visualizer. Really looking forward to 2.1 for the iPhone and the potential of Voice IP for the new iPods.
Shouldn't one try a feature like "shake to shuffle" before starting to criticize?
Based on the data presented at the conference is there a need to be concerned with Apple "losing momentum in music" and was I disappointed?
Not at all.