Analyst: Sony, Napster offerings won’t rock Apple | iLounge News

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Analyst: Sony, Napster offerings won’t rock Apple

Steven Milunovich of Merrill Lynch said today that Apple has little to worry about in terms of competition from new flash memory-based players and subscription music services from its rivals.

In a research note provided to iLounge, Milunovich said that Sony’s three new flash MP3 players will be the most likely to challenge the iPod shuffle in the coming months. “We believe these are likely to be solid sellers, but they don’t support iTunes and do not have the cache of an iPod,” he said.

Milunovich noted that the Sony players do have a small screen, but that they use AAA batteries as compared to the iPod shuffle’s rechargeable internal battery. “We view Sony as the most serious competitor, but since Apple will be supply-constrained on shuffles it will be difficult to assess the impact in the near term,” he said.

The analyst also said that Napster’s $14.99 a month subscription service could be easily matched if Apple wanted to. “We don’t see a big impact on Apple because (1) we are not big believers in the subscription model where consumers pay indefinitely to listen to their favorite songs, and (2) if we’re wrong, Apple can establish a subscription service with few barriers to entry,” Milunovich said. “Record label executives we spoke with believe the market could be bimodal with the majority people choosing to purchase and a niche for subscription services.”

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Comments

1

Steven Milunovich -Steven Milunovich -Steven Milunovich ...all I ever hear is Steven Milunovich .

Posted by schaaking in Minneapolis on March 8, 2005 at 3:46 PM (PDT)

2

Given the fact that the iPod is just a Tool, FWIW it could be a Zen. It dosen’t matter a pair of fetted Dingos Kidneys if you can build the better iPod, if you can’t build a better iTunes!

And there’s the catch Napster can’t make any Money off there System, just like Apple with it’s iTMS. Because the RIAA takes it all. And actually has the aurdacity to demand more! Doesn’t even have a means to make Money from Hardware sales either. Sony, Creative at-el. have the means to build the Hardware, but because there either lazy or so whiped by Micro$oft to force People to use the failed .WMA Format. Do not have the means to create a Software package like iTunes.

And thus untill someone Actually see this! It’s not likely we shall see an iPod Killer.

Posted by Ichijoe in Deutschland on March 8, 2005 at 4:05 PM (PDT)

3

Yep.  You’ve basically nailed it on the head.  Not to mention the cottage industry that has formed with accessories.  Every month we see yet another iPod killer and notice its never the same from month to month.  Meanwhile, iPod is STILL WINNING NOW.  The only iPod killer is one that has to actually be SEEN KILLING THE IPOD to be believed.  Otherwise it will remain hot air.

Posted by Frank Z on March 8, 2005 at 5:00 PM (PDT)

4

Yeah, there won’t be an iPod-killer until someone big really sets their will to it. There has to be a very good looking product and a big marketing campaign, I think.

The iTunes Music Store means nothing to us in a lot of other countries who can’t use it anyway.

When I had MD-players I always bought the ones with AA-betteries and not the ones with built in batteries. It’s a good thing to have 3 batteries with you sometimes. AND above all, it’s great to be able to buy a new battery for peanuts whereever you are when you realise you’ve forgot to charge your player.

I really think that sooner or later there will be a real contender to the iPod. After all, the iPod has so many faults, is so frustrating, and then theres the iTunes software on top of that horrible cake. For now, I think iPod is the best product, but it’s really a love/hate-relationship for me and I can’t wait to ditch it for something better.

Posted by Olf in Singapore on March 8, 2005 at 5:44 PM (PDT)

5

Sony and Microsoft were expected to be the two big contenders.  All last year, they were talking about the impending opening of MS music store.

Now Sony has put out some products which, if you only consider the hardware, are nice, sleek products.

Of course there are rumors that the hard disk for the Xbox 2 may double as a MP3 player.

Posted by wco81 in West Coast on March 8, 2005 at 8:51 PM (PDT)

6

Only AAAs?

I thought at least one of the new Sony flash players had a rechargeable battery, with a 50 hour charge life.  With analysts getting info wrong like that, who’d want to have Merrill Lynch manage their portfolio, let alone give DAP advice, anyways?

Promising devices, perhaps, but does anyone really want to buy Atrac files?

Posted by flatline response on March 9, 2005 at 12:04 AM (PDT)

7

wco81 said:
>Of course there are rumors that the hard disk for the Xbox 2 may double as a MP3 player

The Xbox already plays WMA files (you have to rip them from a CD or transfer them using some additional software from a Windows PC).

Posted by Daveoc64 in UK on March 9, 2005 at 1:13 AM (PDT)

8

Well again, it amazes me how much some People choose to vilify iTunes. While true it may not be the greatest Software in history it sure kicks Window$ Media Player to the curb. I couldn’t imagine ever useing WMP for anything but .Mpg .Avi or Divx Recordings. If Apple ever manages to release a Quicktime (for Windows) that would alow me to view ANY FILE @ Full Screen I would have no futher use for WMP, ever again!

Again wether you Apple Fanboys’ out there think so or not. All Propritory Formats aside. (AAC), there’s not that much difference between the ‘Zen Touch’ and the currnt line of USB2.0 Only ‘iPod’s’. Save one thing iTunes.

To be honest I don’t use the iTMS Store either. I do not have (nore want a Credit Card), So Apple arn’t likely to get any revenue out of me, till Apple makes some kind of ‘Target’ deal where I can purchae iTMS Debit cards (or Cupons), Like I said before that part of iTunes is just a ‘Stick’ the ‘Carrort’ is iTunes interaction with the iPod itself. Simple to use. intutive and chuck full of misteries just to keep things interseting. When was the last time you heard anyone say that about M$‘s blotad Media Player?!?!

Posted by Ichijoe in Deutschland on March 9, 2005 at 2:27 AM (PDT)

9

^^^ They already have iTMS gift card type deals where you can pre-purchase songs in a retail store, and have had it for awhile.

But I agree about iTunes.  In fact, the whole reason I bought an iPod a year ago was because I had downloaded iTunes and liked what I could do with that.  Which got me to thinking about buying an iPod. 

Forget those crazy dance commercials, Apple’s biggest marketing tool has always been iTunes.

Posted by ACLeroK212 on March 9, 2005 at 5:43 AM (PDT)

10

Ichijoe, you can buy iTMS gift cards, but I still wouldn’t suggest buying DRM’d music at 128

Posted by graphicgeek in Utica, NY on March 9, 2005 at 6:12 AM (PDT)

11

If I were in the Good ‘Ol U.S.A I’d wouldn’t have brought it up! I do not of course live in the US but, in Germany. Where we do not have ‘Targets’ or Gift Cards. As far as Cupons (a.k.a. Gift Certificates) Go the only place I know of to get them, requiers the same means as to simply purchase any Tune(s) that I might wish. Though the iTMS via a Credit Card…

Posted by Ichijoe in Deutschland on March 9, 2005 at 7:00 AM (PDT)

12

Blah, all of you have it worng, Apple is selling hardware, they make all thre money on that hardware in ipod sales. iTMS makes no profit. The iTMS is a content service for the iPOD. The iTMS give the iPOD content support it would be really easy for apple to lower the price of a song download if they did not have to pay the RIAA.

Sony is someone that can challenge Apple, they have both hardware and content. If Sony will focus on selling the hardware and not worry about content sales (take a loss like apple) they can do the same thing.

Will Sony topple Apple, who knows, but Sony has a long way to go before they can reach that goal, and they know it…

Posted by Zardoz in Austin TX on March 9, 2005 at 8:13 AM (PDT)

13

Zardoz, your completely missing our points.  We’re not saying they make all their money off of iTMS, we’re saying iTunes is a huge reason the iPod has an advantage over all other competing portable players.  Based on hardware alone Apple really doesn’t have that big of an advantage over more feature packed and just as attractive players.  It’s the little things, like how extremely well it’s been integrated with software like iTunes that gives it it’s dominance over the portable market.

Posted by ACLeroK212 on March 9, 2005 at 8:56 AM (PDT)

14

????? What do you mean? You actually LIKE iTunes? I wouldn’t say WMP is such a great mediaplayer, but I sure don’t think that iTunes is better. I’m actually amazed to see that you think so. I never knew.

Posted by Olf in Singapore on March 9, 2005 at 9:01 AM (PDT)

15

-> Zardoz

I thought I said that in my first response.

And there’s the catch Napster can’t make any Money off there System, just like Apple with it’s iTMS. Because the RIAA takes it all. And actually has the aurdacity to demand more! Doesn’t even have a means to make Money from Hardware sales either. Sony, Creative at-el. have the means to build the Hardware, but because there either lazy or so whiped by Micro$oft to force People to use the failed .WMA Format. Do not have the means to create a Software package like iTunes.

I think you are makeing the same mistake as everyone else and there ‘Killer iPod!’ If you were to stip the Zen of it’s WMA and the iPod of it’s AAC you’d have two very simular products that basicly use the same technology to do the same thing, The only difference is Creatve are not creative enough to kill iTunes. Be it at it’s Store level or any level at all…

Posted by Ichijoe in Deutschland on March 9, 2005 at 9:02 AM (PDT)

16

-> Olf

I don’t know if there’s a better Player then iTunes. But it is a Hellova lot better then WMP10. For one thing iTunes doesn’t have the bloat that WMP10 has. The only negitive point that I can think of is the penchent of trying to get you to go to it’s iTMS. Which you can turn off in the options. The fact that there no AD’s in iTunes besides the odd link to there Store for now is also a plus.

All that plus the fact that it’s Free to all. With or without an iPod. I wouldn’t know of any other Player that would be worth my time. Anything that you could mention cough Anapod cough co$t$ Money, and is not free…

Posted by Ichijoe in Deutschland on March 9, 2005 at 9:11 AM (PDT)

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