Re: Re: product differentiation
Originally posted by greenstork
Here's some simple math.
7,000,000 songs sold (for the sake of argument)
$1 per song =
$70,000,000 revenue
How does 7 million X $1 = $70 million?
Is this quantum mathematics?
Anyway, here are some interesting things to consider aside from 'fuzzy math':
Sony Music is up for sale. They want out of the industry, and were almost bought by Vivendi/Universal until Vivendi bought Dreamworks instead last week. This would seem to indicate that the battle over what's more important, hardware sales or piracy, has been decided.
And consider this in terms of Apple's market share for MP3 players: It doesn't matter who competes. iPod is the now product associated with portable MP3 players as much as "Walkman" became a generic term for portable cassette players, or as Coke became synonymous with cola softdrinks. Apple did what is the most important rule of marketing, which was to be first with a completely new type of product. Hertz was the first company to do what it does. Other companies might do it better or cheaper, but Hertz still has the largest market share to this day. This rule seems to apply to almost any industry. Xerox is another example. When was the last time you asked for a 'mimeograph' or a 'Toshiba' of something?
Sony can however make a good deal of money by being number 2, because nobody has clearly established themself in this poistion yet. But if they only use their proprietary music format and eliminate the ability to play MP3 or AAC, they are going to lose their ass faster than you can say "Betamax".
It's a quarter past too late for anybody to unseat Apple as the de facto king of MP3 players. Unless Steve Jobs does anything as stupid as John Sculley did during Mac vs. DOS says, or unless somebody comes up with something so radically different and more appealing, I wouldn't lose sleep any sleep over this one. While companies like Sony continue to lay people off and sell off their assets, Apple hasn't had a single lay off and has actually increased their R&D spending. It has apparently paid off, as evidenced by all the behemoths who are trying to play catch-up now.
