Introduction:
Do you remember a time when Transistor Radios were the most technologically advanced form of listening to music? Or how about in 1984 when Sony introduced the Walkman? These are the key radios and handheld devices that led to the creation of the handheld CD player, and into the craze that is now the MP3 Player. Technology is a fast paced market. Much like Darwin used the term “Survival of the Fittest” to play upon natural selection and predominance, it can be found in the technology industry today. There are over 100 producers of the MP3 player, however, there are only about 7 key companies who stand a chance to rank as the top in the industry, a title currently held by Apple.
The invention of the portable Music Player or MP3 was brought on by a need. The need was to overcome the need for limited music space. Not to mention that there was a need to capitalize on the trend of consumers downloading music onto their computers. The first MP3 player was introduced in 1997 by SaeHan, and it was called the MPMan F10. In 1998 Diamond Multimedia came to market with the Rio PMP300. The success of this MP3 player in its first year is what led the investment into the MP3 player industry. However, in 2005 this company decided to shut down production after a 5% increase in revenues, due to the high level of competition that faced the market.
Key Problem/Issue:
The main problem and issue in this case is for Apple. Apple is obviously the industry leader when it comes to the MP3 Player, with their iPod, iPod Nano, and iPod Shuffle. However, the main problem is how will Apple continue to be the industry leader in the ever more competitive MP3 Player Market? Although Apple was not the first mover in the MP3 Industry they did however set a precedent on the MP3 Player and the attributes that should be associated with it. One advantage that I feel Apple has is that they are known for their quick product innovation and marketing.
Analysis:
Apple’s strategy in regards to the iPod is simple: quick product innovation and marketing. There were many trends that faced the MP3 industry, the pace of technology was key, people wanted smaller devices, larger memory storage, longer battery life, and something that was fashionable. Companies were competing on all of these trends to see who could come out with the smallest MP3 player that could do all of these things.
The music industry has changed in more ways than we could imagine. At first we started with artists just selling singles, then it transformed over to people buying albums, and then on iTunes started to sell songs for just cents. In the year 2005, Pandora was launched on the Internet and later they created a mobile app. Most of the artist’s music can be found on YouTube. Free downloads have affected this industry as well.
MP3 has made it feasible to download quality audio from the Web very quickly, causing
“The product life cycle is concerned with the sales history of a product or product class.” (Mullins & Walker, 2013, pg. 271) Beats by Dr. Dre’s mission is to be the leading producer of headphone and portable speaker systems and since their inception they have been climbing the ladder taking market share from competitors link Samsung and Sony. The current industry climate consists of many big brand names competing for a piece of the pie. All of these big brand names have a unique selling proposition and key features but none have differentiated themselves the way Beats by Dre has. The headphones have become an industry standard and they are an item coveted by the masses, creating an opening for Beats by Dre to introduce The Pill.
EMI's major problem is lack of market share in the US. Upon first glance one would think that the major problem that EMI is faced with in its US market is the possibility of a decrease in its CD sales caused by the decrease in CD price by Universal Music Group. It is acknowledged that the decrease in price by Universal will affect EMI but Universal's price cuts are not the only or main problem EMI is faced with.
Are you an extensive traveller? Do you love music? Then your answer is a MP3 Player, a device that allows you to listen to your favorite music on the go. There is nothing like putting on the head set, laying back and listening to some refreshing music when you are exhausted. This is when a MP3 player comes in handy.
Sony Music should have been better engaged to allow this division’s management to properly voice their concerns over the piracy of their content. If there had been a taskforce, as mentioned above, developers for the two music devices could have worked with Sony Music to adjust their products to meet the piracy concerns. Maybe then either team could have produced a product that not only did not have sizeable technical drawbacks, but was innovative enough to capture the attention of the marketplace.
Mr. Petty has a sober perspective on the purpose of the music player, regardless of the medium or brand. The MP3 player became an affordable and convenient device to enjoy ones favorite music, in a small and efficient formatted package. However a person listens to the music they love, the quality is sometimes unrealized until a more sophisticated format for listening is offered. Even then, most people may not hear the difference without a side by side comparison is
When analyzing the Apple industry on of the main tools that was used was the five forces analysis. The first force looked at was the barrier to entry, in which capital, brand loyalty and economies of scale were the main components. In an industry where technology plays such a major role capital is a must in order to stay innovative and ahead of the competition in the research and development department. Capital is also needed because there are so many major names in the music player industry already that a major advertising campaign as well as some type of niche in the market to set you apart would be needed. When it comes to brand loyalty, companies like Apple, Dell, Creative Labs, iRiver, RCA and SanDisk already play a major role by producing music players that are reliable and cost efficient depending on the technology that you are looking for in a music player. Economies of scale would play a major role in deciding whether or not to enter the music player market because Apple controls 60 percent of the music player market in which only 11 percent of the population owns a player. This would make one believe that since Apple owns such a major percentage of the market that they have sold enough of their products that economies of scale doesn't really pertain to them. In order for you to get to the point where you can sell your product at low enough prices to compete you would have to sale a large amount and with only 40 percent of the market open to smaller less technological companies this would be a difficult task.
Today, Apple keeps coming out on top with their exceptional and award winning items and administrations. Apple is additionally credited with driving the advanced media upheaval with their iPod compact music and feature players and iTunes online media store, making the first supportable music-downloading plan of action ever. (Jakab,
But there was money to be made on the "Napster revolution," as electronics manufacturers and retailers soon discovered. In 1999, 2000 and early 2001, sales of CD burners and blank CD-Recordable discs skyrocketed. Suddenly it was feasible for the average person to gather songs and make their own CDs, and music-mix makers everywhere wanted to get their hands on the means of production. Today, writable CD drives (CD burners) are standard equipment in new PCs, and more and more audio enthusiasts are adding separate CD burners to their stereo systems. In less than five years, CDs have eclipsed cassette tapes as the mix medium of choice.
Introduction of the iPod: The iPod was introduced into the market just in time for Christmas, 2001. The first iPod was priced at $399. Apple relied on a hard disk for storage instead of flash memory or interchangeable CD-Roms and focused on promoting the uniqueness of the small size, power, and ease of use of the device. This first iPod had a 5 GB storage capacity—which is enough to hold over 1,000 songs—and it worked only on Macs, using iTunes as a music organization and CD-to-iPod conversion tool. iTunes, digital jukebox software that let Mac users import songs from CDs by converting audio files to the MP3 format and storing them on the computer’s hard drive, was introduced in January of 2001. Along with the iPod, Apple announced an enhanced version of iTunes that included a 10-band equalizer with presets, as well as a cross fading feature for smoother transitions from one song to another. An Auto Sync capability facilitated the downloading of music from a Mac to the new portable media device. Once the music was downloaded, Apple promised 10 hours of continuous play from the iPod’s rechargeable lithium battery. The device supported MP3, with bit rates of up to 320kbits/s, as well as AIFF and WAV file formats. Its amplifier could deliver 20-20,000-Hz frequency response. Apple sold 125,000 iPods by the end of December 2001.
Apple can adopt the strategy to portray a picture of a not so conducive less profitable market, which could discourage new entrants from picking that path as they will be demotivated by the low return on investment resulting from low profitability levels. In order for apple to create a niche for t numerous products, it needs to adopt and implement such bold strategies of defense to protect their interests and continue to be profitable and successful (Ideavist, 2011). Entry of a new company into the technology sector would spell doom for most companies already struggling for market share as better priced and reliable products could imply consumers would shift their preference to the new entrant leading to a negative volume of sales stir for most already established companies. Another strategy that could be employed as part of Apple’s defense could be the pre-entry strategies that make it even harder for new entrants to compete and enter into the sector and this involve continuous improvement for their products, covering
Haire, M. (2009, July 1). A brief history of the walkman. Time, 1-2. Retrieved from http://content.time.com/time/nation/article/0,8599,1907884,00.html
Since the introduction of the smartphone the mobile phone industry has taken off with many companies trying to succeed in the battle to have the best quality phone. In the third quarter of 2013 smartphones accounted for 55% of overall mobile phone sales, with worldwide sales of smartphones up 50%. (Johnson, 2013) However before the creation of palm sized smartphones there had been a large amount of different versions of mobile phones going all the way back to 1938 with the SCR-194 and 195. This was the first portable AM radio produced by the U.S. Army signal Corps Engineering Laboratories, which was considered as the first “walkie talkie”. (Meyers, 2011) The tech...
...P, 2005, p 23) Around 2005 cell phones and PDAs were referred to as Swiss army knives of gadgets due to the fact they had many functions in one device. All the big phone companies at the time were premiering phones with more mp3 storage than mp3 player, essentially foreshadowing the future. (Dempsey, P, 2005, pg. 23)An average smart phone in the year 2014 can hold around 8-16 gigabytes of data, and if storage is allotted correctly, the phone can hold thousands of mp3s. Any mp3 player trying to have a foothold in the consumer market cannot compete with a device that is an essential part of an average person’s daily life, and a music player. “Smartphones with increasingly high-quality audio and video capabilities have become popular and therefore hamper demand for products in the Audio and Video Equipment Manufacturing industry.” (Krabeepetcharat, T. 2013. p. 8)