Eating Away the iPOD Brand
posted by Dave Hoffman
The Guardian (UK) offers this gloomy report on the iPOD’s future:
Industry-watchers warn that the iPod could soon be regarded by teenage cynics as their ‘parents’ player’ because a mass-market product rarely equates with edgy fashionability . . . The Zandl Group, a New York-based trends forecaster which regularly interviews a panel of 3,000 consumers aged 25-35, recently picked up its first significant criticisms. ‘The iPod is far and away the most popular tech gadget with our panellists – however, for the first time we are hearing negative feedback about the iPod from some panellists,’ said the organisation’s spokeswoman, Carla Avruch. ‘Panellists cite that the batteries are not replaceable, so when they die the entire player must be replaced,’ she said. ‘We have heard from some conspiracy theorists that the batteries are made to die soon after the warranty ends.‘Other complaints are that iTunes [Apple's online music store] is overpriced and the format is not easily transferred on to other players. In our ethnography interviews, some long-time iPod-users told us that they have stopped updating their iPods because it’s too much work, while other consumers who had bought iPods more recently had not even taken theirs out of the package to set it up.’
She added that the iPod is in danger of becoming a victim of its own success: ‘Some backlash is against the ubiquity of the iPod – everyone has those white headphones on the train.’. . . Wall Street is reportedly starting to worry that the bubble will burst.
Tomi Ahonen, a technology brand expert and author, said: ‘For the first time the iPod has had two consecutive falls after 17 quarters of growth. If I were the manager, I would be wanting my people to explain what is going on. The iPod is wilting away before our eyes.’ . . .
Ahonen, author of Communities Dominate Brands, predicted that in the long term the iPod will have only a narrow audience. ‘It will continue to dominate a niche at the top end: if you’re a musician or a DJ you’ll use it because it’s the best, like a photographer with his Nikon camera. But the average mobile phone user gets a new handset every 18 months, and a quarter of mobile phones sold this year will have an MP3 player. In the same way as camera phones have pushed cameras to one side, this is an automatic replacement.’
Interesting. I’ve previously written (see below) on the topic of the interaction between individual experiences with the device’s poor lifespan, optimism, and iPOD’s market share. I’ve suggested that Apple has erected brand- and network-based barriers to erosion of its sales. A notable piece of evidence in my favor: notwithstanding the “backlash” against the iPOD and the reported “wilting” of Apple’s brand, its share price has been on a strong run since mid-July.
Other Posts on the Topic of iPODs:
1. Christine Hurt, Apple, iPods, Network Effects & Interoperability
2. Frank Pasquale, Single-Payer Music Care?
3. Hoffman, Is Apple Exploiting Consumer Irrationality?
4. Hoffman, (Will) iPod (and Ford) Kill the Radio Star?
5. Josh Wright (at ToTM), Paternalism and the iPod, Part II: The Behavioral Economics of Apple?
September 11, 2006 at 12:08 pm
Posted in: Behavioral Law and Economics
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Responses (4)
Frank - September 11, 2006 at 2:18 pm
I think a lot depends on a) how well Apple’s corporate partners control the catalog of desired music and b) how hard Apple makes “switching.”
a) If MySpace and other similar sites start selling music, they may create a viable alternative to the iTunes music store. But as it stands, Apple’s hardware/software dominance & its good deals with the Big 4 are pretty hard to overcome.
b) People invest a lot of time in making their iPod playlists and downloading content to it. (I have about 45 gigs on mine now…the majority is free podcasts.) I’ve found it very difficult to transfer any of that material to my Dell MP3 player or iAudio radio/mini MP3 player…rather, I’d have to laboriously re-rip or re-download everything (in non-apple format) I’ve attained over the past few years.
HIPAA mandates some degree of health insurance portability, and the FCC recently made cell phone carriers give customers number portability. How about playlist/music portability between players?
Bruce Boyden - September 11, 2006 at 5:39 pm
“[A] mass-market product rarely equates with edgy fashionability.” Well, now, that’s interesting if true (which it may not be — I think consumers in general want to be edgily fashionable in lockstep with their friends and neighbors), because it would mean that the strength of network effects for devices is limited at the top — creating pressure for a “long[er] tail” of devices than would otherwise exist. I.e., iPods’ very prevalence strengthens the market for other brands of “pods.”
Clark - September 13, 2006 at 5:47 pm
I think more depends upon how easy to use the alternative services are. No one tends to mention in these debates just how bad most of the alternatives like Napster are. We’ll see how MS’ Zune pans out.
Frank, I bet you encoded using AAC. The non-DRMed AAC format is public and many players support it. The limitation you note is due not to Apple’s DRM but your Dell MP3 Player I suspect.
jasmin - September 22, 2006 at 5:58 pm
i think hee shuld be more brands then jsut the “apple” brand it is the only brand people buy today cuz they dont no about the other brand form the (UK) and Europe. they spend around 50-90 dollars just for the brand apple to be writen on the back i would like to tlel you its a waste of money and if youd like to find out more contact me
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