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Analyst: Apple’s iPod Shows No Sign of Losing Momentum
Wednesday, October 25th, 2006 at 3:00 PM - by Bryan Chaffin
Apple Computer shows no signs of losing momentum with its iPod product line, according to Jupiter Research analyst Michael Gartner. Mr. Gartner released a report based on a survey covering the U.S. portable music device market, and his conclusion is that the iPod shouldn't lose "significant" market share in the next 12-18 months. The report also noted other trends with music listeners such as listening habits, money spent on music, and how those listeners are purchasing their tunes.
For the nonce, the majority of music consumers with digital music collections are being ripped from CDs, as opposed to downloaded from an online service. While the report didn't specify this, such a trend is certainly within keeping of the broader music industry as a whole, where CD sales far outnumber digital downloads.
That said, the percentages with iPod owners are different than the broader industry, with iPod owners attributing some 19% of their total collection to online downloads. Those identified more loosely as "paying downloaders" said that some 32% of their collections was comprised of digital downloads. Adults identified merely as being online with a music collection have only 12% of their collection coming from a download service.
Apple's rumored iPhone may have a market to exploit, as the survey found that cell phones capable of playing music are being mismanaged by cell phone operators. The report concluded that those operators have viewed phones a vehicle for their own sell-throughs (in the form of digital downloads), rather than as a way to lock in customers by giving them features or services they want. As a result, cell phones are expected to compete against low-end digital media devices, as opposed to specialized, high-end products like iPod.
Not noted by the report would be Apple's market opportunity by changing perceptions with its rumored iPhone, an opportunity represented by the inability of other providers and carriers to crack this market.
Other notes:
- (Only) 18% of adults with music collections have more than 1,000 songs on their digital media devices.
- A device with 5GB of capacity remains the "sweet spot" with consumers.
- Growth rates in this market will slow "dramatically," but customers buying multiple devices will mean the market does continue to grow, even as the installed base reaches more than 100 million in 2011.
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