Apple’s iPod, iPod mini, iTunes, and iTunes Music Store have, by nearly every measure, been tremendous hits. iPods have become the de-facto standard of portable music players, and no one has yet to match the combination of iTunes and iTunes Music Store. An editorial by Peter Burrows and Tom Lowry, appearing in BusinessWeek Online, examines some of the areas where Apple might shore up its defenses against current and impending competition. From the article:
What should Apple do to stay on top? Plenty. For starters, it needs to embrace the new ways consumers want to buy music. While the iTunes store offers 99 cents downloads, Apple has yet to provide a subscription service for folks who want to listen to whatever they want for a monthly fee. To stare down a raft of new music players, Apple needs to broaden its product line. It should consider forming partnerships to add iPod technology to cell phones and other futuristic devices. And it needs to address nagging quality problems, such as scratchy-sounding headphones and disappointing battery life. While most buyers love their iPods, Apple has to hit a higher standard to keep its market share, premium prices, and good buzz it has with buyers.
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Jobs also should rethink his views on subscriptions. He has refused to offer them, saying music fans want to own rather than "rent" their favorite songs. But more than 1 million people now have online music subscriptions. Market leader RealNetworks Inc. (RNWK ) boasts 450,000 subscribers paying as much as $9.95 a month, up from 250,000 in the past year. Clearly, many consumers believe subscriptions are an easy, affordable way to discover new music.
There’s more in the full article at BusinessWeek Online, and we recommend it as a good read.
The Mac Observer Spin:
We happen to agree with Steve Jobs on the subject of music subscription services; the 1 million current users notwithstanding, we don’t believe that subscriptions are something that most music buyers want. Or maybe that’s just us, because we find the idea of renting our music to be abhorrent.
That said, Microsoft’s upcoming Digital Rights Management software update that includes a way to listen to subscribed music on a portable music player is somewhat interesting. It’s likely that there are enough folks out there that don’t mind the idea of renting their music to make this worth someone’s while to provide, but we’ll reserve judgment until we see the technology in action.
As for the rest of the suggestions, there’s a lot in this editorial that seems like good advice to us. Certainly we have been advocating the idea that Apple work with as many partners as it can to spread the iTMS, iPod, and all of the Apple-specific technologies that go with those two products. We’d still like to see a Dell-branded iTMS or iPod, and we think that Apple should do everything it can to develop a partnership with Amazon to provide that company’s download service. Perhaps even power house Google would like to have its own download service…The point is that there are many areas where Apple could develop partnerships that complement Apple’s existing marketing avenues.
Such deals bring new people to Apple, and we think that’s a Very Good Thing™.