Wednesday, October 13, 2004


Anyone starting a business inevitably has to define the niche of a new product, or at least explain why it will succeed where others failed, or where others are already succeeding. Don’t tell this to makers of digital music players, who keep finding the money to roll out generic products in feeble competition with Apple’s market-leading iPod and iPod Mini.

This week sees the rollout of the Virgin Player. Its main distinction is that it has the Virgin name on it. So do music stores, an airline and a cola, though, and none of these are anything more than interesting also-rans.

Nike and Philips announced a player this week, too, but it at least has a “performance monitor” for athletes that sets it apart. And a strobe light!

Last week it was the Rocbox, which is being marketed as sleek and shiny in black chrome, getting attention mainly because of the street cred of the man behind it: Damon Dash, the Roc-A-Fella empire builder, who plans to make it a vital hip-hop fashion accessory.

There are already a couple dozen of these music players available to what calls “an increasingly confused public,” and every one released since the iPods took over has been touted as the device that’ll send Apple's players the way of the Mac G4 Cube. There’s nothing wrong with taking a gamble and defying the conventional wisdom, but it defies logic, too, to think that adding three players to a crowded market is going to thin it out somehow. While the names Nike, Virgin and Roc command some attention, and corporate synergies work in their favor, here are some reality checks:

Virgin already has four players for sale, including a stylish round “wearable” unveiled in July. When’s the last time you saw one? Has this Virgin Pulse become synonymous with mp3 players? Sure — just as Virgin’s cola has replaced Coke and Pepsi.

Sony thought its brand would rule the market, too, and it tried to stay in control by specifying which music formats its players would accept. In September, the company went crawling to the mp3 well, expanding its acceptable formats and, essentially, admitting defeat. Apple limits the formats it takes but is bending the world to its will, adding Windows users to its iPod, iTunes, iTunes Music Store world.

The iPod has 82 percent of the U.S. market for digital music players, despite all the competition. The news today is that Apple’s fourth-quarter profit nearly doubled from last year, with iPods accounting for nearly a quarter of the company’s revenue. Apple’s sales rose 37 percent, with iPod sales jumping by a factor of five.

The iPod name has also, unlike the Virgin Pulse, become synonymous with its product. In a survey of high school students, the financial adviser Piper Jaffray found that 16 percent already had an iPod, 24 percent planned to get one in the next year and that the players were the fourth-most-desired holiday gift. What’s important here is that “iPod” wasn’t an answer that could be chosen; the students all took the initiative to write in “iPod.”

It’s a fragmented, confusing music-player market out there, requiring a lot of research, unless consumers jump immediately to the “iPod” category. Consumers don’t want to be confused, and they don’t want to do research. They want an iPod.


Anonymous said...

I have a beloved tiny MP3 player which doesn't hold much but is easy to load and 30 songs at a time will get me through most days. It's also a jump drive or something like that so it doesn't skip unlike the hard drive-driven MP3 players. Sadly, I gave it just a bit too much of a jolt last week and it seems to be permanently confused (it spoke Chinese for a while, now it just declares it's got a disk error). Happily, it was nowhere near the $250 to $400 price range. Sadly, it came from the Microcenter return table and I don't know if there's much hope of finding another one for $50.


Scape7 said...

I’ve more or less entered the world of doing without until I can afford what I really want. But my guess is there will, in fact, be plenty more cheap-o music players out there on the remainder and return racks of MicroCenters everywhere. Hell, pretty soon Wal-Mart will have its own for $15, I’d guess. What does a DVD player cost now? $4.99 with a coupon?