Looks as though some of Apple's (NSDQ:AAPL) mp3 competitors are licking their wounds and retreating.
"No one has been able to catch up to Apple," IDC analyst Susan Kevorkian said. "Apple's ongoing dominance has made it difficult not only for major consumer electronics brands to compete, but also the much smaller brands."
Dell Inc. quietly began to phase out production of its hard drive-based audio players in December but said Tuesday it will continue to sell its flash-based DJ Ditty player, which costs $99.
We're no consumer expert, but we expect that the "Ditty" might not fare so well either. Having been Apple bears for quite some time, we must admit surprise at how poor the marketing abilities of other mp3-player makers have been. Dell's not the only one bowing out...
MP3 player pioneer Rio has retrenched as well. Last fall, its parent company D&M Holdings withdrew from the portable player market to focus on higher-end home audio products.
Still perhaps these mp3 competitors aren't so much worried about Apple as they are about their overall product segment. The stand alone mp3 player's days could be numbered as mp3-capable mobile phones multiply. Apple has just recently continued what has been a sharp decline in price for mp3-functionality. Remember $500 iPod's? Now it just makes more sense to get a good 4 gigabyte Nano for $250. Dell and Rio's actions may not necessarily be signs of further success for Apple, but maybe more a sign of the product segment's upcoming demise. Not to say that Apple can't milk a few more quarters (if you made us guess, 2 years?) of remaining value...
Why do people always make sweeping comments like this? You assume that Apple will just sit and watch the MP3 market run away from them. Are you kidding me? You don't think Apple will continue to inovate and lead this market like it has? Good grief. You make a sweeping claim about the future using todays technology. Plus, you don't even consider the 3 billion dollar a year iPod accessory market. I can't plug my phone into my BMW car radio, but I can with my iPod. Please be more responsible with your gibberish in the future.
Posted by: sean | February 08, 2006 at 08:52 AM
I agree with Sean. You are making the mistake that, since people are retreating from the MP3-Player, which really should be called the digital music player, market, that somehow the market is poised for decline since the days of the stand-alone digital music player are numbered.
First, that's a sweeping, and most likely inaccurate, conclusion. There is no market data to back it up.
Additionally, Sean is right. Apple has led by innovation and will continue to do so.
Why are others exiting the market? Because the amount of market share they are getting, which is in the single digits, does not allow for sufficient sales income to warrent the trouble. And it's only getting worse. By not having a strong hardware-software link, Dell, Creative, Rio, and others become an even less compelling option as Apple becomes more compelling.
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