I wouldn’t want to be an Apple exec right now….

By April 16, 2007Music

iPhone and Jobs 

There was an interesting Sunday Times article yesterday about the new iPhone yesterday that got me thinking that maybe for Apple the only way is down.

I say that despite the fact that last week they passed the 100m mark in iPod sales and that they have gone from $5bn revenues in 2001 to a forecast £23bn this year (half of that will be from iPods).

To me the music player business is not an attractive one, the hardware is a commodity and my bet would be that Apple will struggle to sustain their dominance over the next couple of years.  We have seen this play out on the PC and if anything it should happen faster with MP3 players.  At the high end Apple faces competition from Samsung, Zen and other Asia Pac manufacturers and at the low end people will increasingly use their mobile phones as music players (conveniently subsidised by mobile operators).  Last week’s announcement that the Leopard release of MacOS will be delayed by four months because the company is focusing on the iPhone is a recognition of the threat from this quarter.

I think that iTunes is a bit of a sideshow to the main game of device sales, but in that area too Apple faces its challenges. These come from Nokia post the LoudEye acquisition, from Microsoft and in the courts from various European governments who take offence to the tight coupling between iTunes and iPods.

So if I was an Apple exec I would be thinking life will be tough going forward and the point of comparison is an out of this world performance over the last five years.  Apple has a fantastic (and I mean fantastic) brand and top spot is theirs to lose, but great history and tough future is not a great combination for people working at Apple.

(Disclosure:  I am not an Apple man.  My dirty little secret is that I have PC religion – I hate getting locked in to closed platforms.)

  • Interesting… I saw the same story and thought it was, at worst, neutral for Apple. Mobile phones have, of course, always outsold iPods, and many mobis have music playback built in already. The thing is: how many people use that functionality, rather than the number of capable units sold?

    I’d argue Apple sells the whole integrated experience, not just the players, even if it’s the players where they make money. And Apple still has a great user experience, while my Nokia (and Motos, and most other mobile brands) has sucky battery life and a woeful user experience. Not to mention really odd arrangements for sticking in your headphones.

    That said, if networks and manufacturers get their acts together to provide a pleasant (and reasonably priced) means of getting music and entertainment wirelessly, bypassing the whole PC sync nightmare, things could still get very interesting. Signs are they’re getting there, slowly…

  • Interesting… I saw the same story and thought it was, at worst, neutral for Apple. Mobile phones have, of course, always outsold iPods, and many mobis have music playback built in already. The thing is: how many people use that functionality, rather than the number of capable units sold?

    I’d argue Apple sells the whole integrated experience, not just the players, even if it’s the players where they make money. And Apple still has a great user experience, while my Nokia (and Motos, and most other mobile brands) has sucky battery life and a woeful user experience. Not to mention really odd arrangements for sticking in your headphones.

    That said, if networks and manufacturers get their acts together to provide a pleasant (and reasonably priced) means of getting music and entertainment wirelessly, bypassing the whole PC sync nightmare, things could still get very interesting. Signs are they’re getting there, slowly…

  • nic

    Thanks Neil. I suspect not many people use the MP3 players in their phones because of the reasons you mention. As you say, though, they seem to be getting their act together, with SonyEricsson in particular doing a good job.

  • nic

    Thanks Neil. I suspect not many people use the MP3 players in their phones because of the reasons you mention. As you say, though, they seem to be getting their act together, with SonyEricsson in particular doing a good job.