![]() In the three years between the launch of MPMan and the iPod, each element in the mp3 player ecosystem turned from red to green. It takes years." Jobs's discipline paid off. If you choose unwisely, then you can waste a lot of energy, but if you choose wisely, it actually unfolds fairly slowly. These waves of technology, you can see them way before they happen, and you just have to choose wisely which ones you're going to surf. Reflecting on catching technology waves in 2008, he said, "Things happen fairly slowly, you know. As we'll see again in the case of the iPhone, Jobs tended to be late for everything because he wanted everything to be ready for him. But perhaps this logic should be flipped: perhaps everyone else was three years too early. But is it six times better? Apple was, after all, three years late. SanDisk's Sansa mp3 player was the iPod's closest competitor with 8% market share.įew would deny that the iPod is a great product, surpassing any other mp3 player offering. As the same customer base kept repurchasing new and better iPods, Apple's profits soared: by 2008 it had captured 48% of the mp3 player market share. But between the third quarters of 20, sales of the iPod had leapt 616%. Although Apple would make scant profit from selling songs at 99 cents per download (it had sold nearly 8 billion songs by the end of 2009 but, with Apple's ten percent commission, that only translates to $800 million in revenue-before accounting for the cost of running the store trivial when compared to $22 billion gained in iPod sales at that time, the iTunes store gave the iPod legitimacy in a world of shady mp3 accessibility.Īccording to NPD Group, sales of portable CD players were still more than double those of mp3 players during the holiday season of 2004. By 2005, iTunes' library had grown to 1.5 million songs. In April 2003, Apple announced the iTunes Music Store, an online retail hub where customers could browse and purchase music for 99 cents per song (or $9.99 per album). Despite being available only for Mac users, the iPod was the fastest selling mp3 player to ever hit the market. But the value of the device was cemented by its seamlessness with the iTunes music management software. It boasted an intuitive interface design and was, for its time, lightweight. The first generation iPod for Macintosh retailed at $399, had 5GB of capacity, and could store up to 1,000 songs. And, in October of 2001, when Apple announced the iPod, those pieces were solidly in place: both mp3s and broadband were finally widely available. ![]() He understood that, in order for the device to have value, other co-innovators in the mp3 player ecosystem first needed to be aligned. Steve Jobs knew that, on its own, the mp3 player was useless. How can we understand the iPod's success despite its delayed entry?Īpple waited, and then waited some more-until it finally made its move, putting the last two pieces in place to create a winning innovation: an attractive, simple device supported by smart software. But the iPod, launched in late 2001- three years after the MPMan-was anything but a first mover. The MP3 player market did eventually consolidate around a dominant product, Apple's iPod. ![]() Without the widespread availability of mp3s and broadband, the value proposition could not come together. It didn't matter that MPMan was first-it wouldn't have mattered if they were 6th, 23rd, or 42nd. Downloading an album-legally or not-could be a multi-hour affair. You couldn't purchase them in traditional retail settings. By the launch of the iPod in 2001, there were approximately 50 portable mp3 players available in the U.S.-and no firm had achieved anywhere near the dominance that the Walkman had enjoyed 20 years earlier.Ĭompared to the Walkman and cassettes, the story was very different for mp3s. ![]() It sold 50,000 players globally in its first year. In 1998, South Korea's Saehan Information Systems created the first portable digital audio player, MPMan. Which mp3 player would get there first and become the next 'Walkman'? But electronic firms around the globe were betting that the CD would soon follow the cassette into extinction. Jump ahead to the late 1990s, when the sun had set on cassettes as the favored music delivery format in favor of compact discs and, for the technologically savvy, digital mp3 files. (46% in Japan) in a space teaming with competitors, even as it enjoyed a price premium of approximately $20 over rival offers. For a decade after its launch, Sony's Walkman retained a 50% market share in the U.S. In 1979, the 'Walkman' was introduced in the Japanese market, selling out its entire stock of 30,000 units within the first three months. In 1978, engineers at Sony successfully married a compact playback device with lightweight headphones to create the prototype for a product that would become a worldwide hit.
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