Jobs hopes to lower iPod prices, iTunes to sell 5% of US music in 2 years | iLounge News

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Jobs hopes to lower iPod prices, iTunes to sell 5% of US music in 2 years

The Wall Street Journal’s Walter Mossberg interviewed Steve Jobs at the D: All Things Digital conference in Carlsbad, California. Mossberg talked with Jobs about the success of iTunes, Mac’s future, and movie piracy, during which Jobs casually mentioned he would like to the lower the price on iPods. “I mean, we’re not happy with iPods costing $300 and $400 and we want to keep driving the prices down on them so we’re working very hard on that.”

Walt Mossberg: You’ve been the leader in legal music downloading. Where does it stand today?

Steve Jobs: We have about 70% market share of the legal downloads, which is great. But if you look at everybody together—100% of the legal download market—we’ve gone from pretty much zero a year ago to about 2% of the legally sold music in the U.S. That’s not a giant number, but if you look at it and say it’s been accomplished in a year and you look at the trajectory, it’s not inconceivable to see it breaking through 5% in the next 24 months as an example, maybe sooner.”

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Comments

1

Haha, sure.
Current prices:
15G: $299.99
20G: $399.99
40G: $499.99

Next Models (most likely)
20G: $299.99
40G: $399.99
60G: $499.99

Apple says “Hey look, we’re so generous that we dropped the prices!”

Posted by Red on June 14, 2004 at 9:20 AM (CDT)

2

Steve, just give us higher bitrate MP3’s to download (forget ACC no-one wants that) and make the store available in more countries, and I am sure you can have more than 5% of the music market in 2 years!

Regarding the iPod: Get the iPod mini to plenty of countries soon, and intigrate cool new features in the new iPod, don’t think a price decrease is necessary. What about WiFi and 12+ hours battery life for the new iPod???

Posted by DG on June 14, 2004 at 9:35 AM (CDT)

3

technicaly they did lower the prices of 2 ipod so they arent lying

Posted by BIGP in Texas on June 14, 2004 at 9:37 AM (CDT)

4

Higher bitrate MP3s?  Higher bitrate AACs!  And the ability to redownload purchased music at the higher bitrate.

Posted by jfk99 on June 14, 2004 at 10:08 AM (CDT)

5

“And it turns out the music companies make more money when we sell a song for 99 cents than they do when they sell it on a CD. The prices aren’t going up on iTunes, I can tell you that.”

-S. Jobs

Posted by Obadiah on June 14, 2004 at 11:33 AM (CDT)

6

hey DG, you’re right, no one wants ACC, because no one has ACC; its AAC.  Further, maybe YOU do not want AAC, but don’t use that to imply that NO ONE wants it.  If over 70 million songs have been bought and downloaded using the AAC method, then that truly makes your statement pointless.  Higher bit rate MP3’s is not necessary, the current AAC bit rate sounds fantastic.  Although I am sure you probably think you can hear so good that somehow AAC sounds bad, but really that is just your “psychological ear syndrome” playing against you.

Posted by coda on June 14, 2004 at 11:38 AM (CDT)

7

In the quote provided above Jobs is NOT claiming the iTunes Music Store will sell 5% of legit downloads. He is clealy refering to total legal downloads. Which if iTMS maintains 70% would come to 3.5%

Posted by Tony on June 14, 2004 at 11:44 AM (CDT)

8

Good point, Tony. And he mentions it only as a possibility, NOT a goal at all.

But web sites are mis-quoting Steve all over, and many will no doubt later slam Apple for not making a 5% “goal” that Steve never claimed!

Posted by Nagromme on June 14, 2004 at 12:42 PM (CDT)

9

“We have about 70% market share of the legal downloads”

For convenience, Jobs is defining a market here very narrowly so that he can claim Apple dominates. Within the US.

However, global legal download market is very different and Apple is not a player, the global and US free legal download market is huge compared to iTMS, and the US subscription market is churning out healthy revenue and growing quickly.

What he should be more worried about is the fact that in legal single downloads, Napster and other WMA sites have moved from 0 to around 30% in a scant six months. Give them another year and as well as ruling subscriptions, they will be in a majority for “legal downloads”.

Posted by market fictions on June 14, 2004 at 2:02 PM (CDT)

10

Napster and WMA followed where iTunes paved the way. Their 0 to 30% hardly sets them on the road to bury Apple’s 0 to 70%!

And of course Apple can only talk about the US market now. I’m going to go out on a limb here and suggest that this will change :)

Posted by Nagromme on June 14, 2004 at 2:12 PM (CDT)

11

“Their 0 to 30% hardly sets them on the road to bury Apple’s 0 to 70%!”

Ah well I recall Mr Jobs’s cocky “Welcome IBM” adverts (in the WSJ I believe) back in 1980 when IBM released the first PC.

At that time Apple had around 95% of the market for microcomputers.

I think your’re wrong any any sensible analysis shows Apple at around 40% of the single download market within 12-18 months.

Of course, 40% of a much bigger pie is better than 100% of a tiny pie!

Posted by welcome on June 14, 2004 at 2:54 PM (CDT)

12

Steve never learns does he… what he ONCE AGAIN fails to see - or admit - is that competitors will catch up - online and in hardware - and answer the calls for features the consumers want and need. Something Apple doesn’t do.
They innovate, sure, and take MASSIVE first steps in development and innovation - then Steve gets on his high horse and says “Kiss My A$$” when we ask for WMA support, and fails to fess up to issues like battery life, all of it chipping away at the initial fanbase… I could go on, but won’t.

Posted by Mongrel on June 14, 2004 at 4:23 PM (CDT)

13

It doesn’t make any business sense for the iPod to have WMA support. This isn’t Steve Jobs being a jackass. It just isn’t a smart move.

Posted by br- on June 14, 2004 at 6:28 PM (CDT)

14

true br-

Posted by BIGP in Texas on June 14, 2004 at 9:53 PM (CDT)

15

I don’t understand why people are so hot and bothered for WMA support.

It’s not the dominant format.  MP3 is.  Who cares about WMA?  (other than Microsoft)

Posted by iPoder on June 14, 2004 at 10:27 PM (CDT)

16

Very few people outside of Apple users use AAC, and even WMA isn’t all that common. Everyone I know that doesn’t encode to mp3 uses OGG Vorbis, because it really is a great format. ~128kbit Vorbis files generally sound better than the standard 192kbit CBR mp3s, and the standard is an open one, rather than one you’d have even the slightest worry about licensing. Hopefully the story posted not long ago about the new iPods using a different chip that works fine with Vorbis files is accurate, and we’ll see Vorbis support with the next (supposedly) video iPod.

Posted by Evil Timmy on June 14, 2004 at 11:04 PM (CDT)

17

“In the quote provided above Jobs is NOT claiming the iTunes Music Store will sell 5% of legit downloads. He is clealy refering to total legal downloads. Which if iTMS maintains 70% would come to 3.5%”

Read the article again—the 2% and 5% he’s referring to is the percentage of legally sold music in the US in general—NOT downloads, but ALL music—including full length albums on CD, as well as all other media.  And it sounds like he’s referring to online music sales in general—not just iTMS.  100% of legal downloads = 2% of all music sold in the U.S. over the last year.  He says it’s not inconcievable that in the next couple years you might see that 5% of all purchased music will be legal downloads as opposed to CDs, etc.

Posted by sloanie on June 17, 2004 at 5:41 PM (CDT)

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