Merrill Lynch: iPod shuffle could take top spot in flash market soon | iLounge News

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Merrill Lynch: iPod shuffle could take top spot in flash market soon

In a research note to clients on Wednesday, Merrill Lynch analyst Steven Milunovich said Apple’s new iPod shuffle could take the top position in the flash-based MP3 player market in the next few quarters. “If Apple can ramp up production, Apple could take the No. 1 position in the flash market in the next couple of quarters. If Apple hits 5 percent share this quarter, that could be 300,000 units,” Milunovich said. “If it takes off, the number could be much higher, possibly passing the 1million mark.”

Milunovich pointed out that Apple currently has 65 percent of the total digital music player market, compared to flash’s 29 percent share. According to research from IDC, the flash player market has three times the units as the hard-disk drive-based (HDD) music player market, but about the same revenue ($2.3-2.5 billion). “Now that 4.5 million HDD iPods were sold last quarter (possibly 2 million in December), it was time for Apple to attack the next market with a lower cost flash-based iPod shuffle,” the analyst said.

Milunovich dismissed the notion that consumers will balk at the lack of a display on the iPod shuffle. “Some have indicated that the lack of a display will be an issue, but we are less concerned,” he said. “The $99 version holds 120 songs and the $149 holds 240—does one really need a display with that few songs? We believe this is a better option than a 60-song version with a display for $149. If a display is need then one needs to move up to he HDD iPods at $249+. We believe this also ensures that cannibalization will be limited while snaring more in the iTune/iPod net.”

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Comments

1

Spot on analysis on the screen thing.  I guess the only reason I can say that is because it’s my opinion as well smile

I’m definitely buying one though.  I’m just going to put my favourite songs on this baby, and let it play.  If I restrict it to 5 star songs only, I’ll barely ever have to do any song skipping.

On taking a chunk out of the flash market, only time can really tell.  It’s hard for anyone to predict how people will reach to the shuffle.  However, if people read alot of stories like this while considering buying a shuffle or not, then their opinion may change.  That’s just based on the “the behaviour of the observed changes when they know they are being observed” thing.  They could “fool” themselves into getting the shuffle, if you will smile.

Posted by polycarbon in Ontario, Canada on January 12, 2005 at 2:44 PM (PDT)

2

This is a flash player aimed, it seems, toward existing iPod owners. I read somewhere that other manufacturers aren’t worried. But the product has these advantages: it is a good price for the amount of memory, it plays AAC, and it works with iTunes. Other manufacturers should worry because they will no longer be selling anything to iPod owners who desire a flash player (for exercise, for battery life) or a jumpdrive. If you already own an iPod, it would be stupid to choose another brand. Who would want to use two programs? iTunes is the most overlooked factor in this whole thing.

Posted by Questioner in New York on January 12, 2005 at 9:07 PM (PDT)

3

they should definitely be worried. i think they were “not worried” when the ipod was introduced. look at it now. apple thinks outside the box, and people are often surprised when they realize they don’t need what they think they need. witness the continued success of the ipod without all the “essential features” offered by so many other players. and at $99 people can afford to experiment. this is going to be fun to watch.

Posted by reverb on January 13, 2005 at 8:01 AM (PDT)

4

with a pricing that low, Apple should be able to dominate the flash market with no problems.  The superb marketing, simplistic and easy to use design and the name iPod has been the proven formula of success for Apple.  Anyone remember when the mini came out last year, everyone was saying how it was priced too high?  Look at how big of a success it became.  Sure the Shuffle doesn’t have a screen, but it minimizes the unit size, clutterness, and with just a few hundred songs it certainly isn’t necessary.  When I listen to a playlist on shuffle mode, i hardly ever look at my iPod screen.  Maybe with customer demands, Apple may include a screen displaying the song being played in the future, but even as it is right now, the Shuffle will succeed

Posted by VertigoLimit on January 13, 2005 at 10:22 AM (PDT)

5

Couldn’t apple just create a remote with a screen…the customer gets to choose whether or not they want a screen…problem solved

Posted by mvtim on January 14, 2005 at 7:37 AM (PDT)

6

Remember your Diskman or walkman? No screen either. Sure there’s 120 songs but Diskman MP3 players had even more than that. It’s a great adjunct when you don’t want the big unit.

Posted by sng8888 in Vancouver on January 14, 2005 at 11:25 PM (PDT)

7

Remember your Diskman or walkman? No screen either. Sure there’s 120 songs but Diskman MP3 players had even more than that. It’s a great adjunct when you don’t want the big unit.

Posted by sng8888 in Vancouver on January 14, 2005 at 11:25 PM (PDT)

8

No screen = no idea of what is playing.

Posted by milk3pod in chicago, il on January 15, 2005 at 1:39 PM (PDT)

9

iPod released: Competitors not worried.  Apple has a tiny market share.  iPod too expensive.  Aimed at audiophiles only.  Nobody needs that much music.  Nobody has that much music.  Won’t sell.

iPod mini released: Apple market share nearing 80%.  Competitors not worried.  Too expensive.  If people want to spend money for an HDD player, they’ll buy an iPod or a Creative player.

iPod shuffle released:  Apple market share over 90%.  Competitors not worried.  Too simple.  Competitors still refuse to understand, release competing flash devices with even more buttons and features.

When will they get it?  When Apple reaches 110% market share?

Posted by patkelly on January 15, 2005 at 11:48 PM (PDT)

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