This post begins on a Sunday, in a canoe – on the Ottawa River. I’m hundreds of miles away. My eldest child, Liam, is in the canoe. He is an experienced canoeist. His classmate Dave joins him in the canoe. Dave is, perhaps, not quite as experienced. I don’t really know. But the canoe capsizes as Dave gets in. No huge problem. Except for the phone in Liam’s pocket. ‘Twould seem the LG phone (that eight months ago replaced the lost Motorola phone) wasn’t able to survive the Ottawa River. It drowned.
It’s now Monday. I hear the story. Liam is sans mobile telephony. He’s going to go searching for a used phone. But wait. I have a one year old Sony Ericsson S710a that I’d love to replace with the SE W810i. With the rebate I get from Rogers and the $100 Liam will pay for the S710a, I have a new phone for under $100. But it’s not just a new phone – it’s a very capable MusicPhone – and this is the story.
If you read my blog regularly, you know I’m an Apple fan. There are three Mac laptops in this household (four if you include Liam’s 12″ in Ottawa), a G4 tower, a soon to arrive Mac Pro and four iPods (five if you include Liam’s U2 iPod).
As an Apple aficionado, I watched Steve Jobs most recent Apple Special Event, and saw him boast of Apple’s MP3 player market share. “iPods have a 78% marketshare of the entire MP3 market, and we’re very proud of that.”
But wait a minute Steve! The “entire MP3 market.” I don’t think so.
…the iPod is by far not the market-leader in portable mp3-playing devices. Their global market share is under 19%.
Jackie links to Tomi Ahonen’s Engagement Alliance post from March, The iPod is dying and will die in 2006. (SEE UPDATE @ BOTTOM OF POST)
So Apple sold 22.5 million iPods. In 2005, the mobile phone industry sold more musicplayer phones.
How many? The telecoms industry analyst Informa reported that the total number of MP3 player equipped phones sold in 2005 were 90 Million.
Adding to the existing musicphones, the worlds musicphone sales in 2005 were:
22.5 million iPods
7 million other stand-alone MP3 players
90 million musicphones
…for a total of 119.5 million portable MP3 players.
Apples market share of devices sold in 2005 is not 78%, it is 18.8%
The blog world and telecoms commentary is alive with the long-rumored Apple phone and its six month exclusive with Cingular. Apple purportedly hopes to sell 25 million iPhones in 2007. According to Think Secret:
Apple’s phone will feature a candy-bar design with a 2.2-inch display and 3 megapixel camera. Robust iTunes and iSync support will also be delivered with the phone.
Steve Jobs knows that the only way to maintain the perception of MP3 player dominance is to attempt to dominate the musicphone market.
But there are a lot of other strong players in that market – with some very cool products out now or on the horizon. On Tuesday, Nokia announced that their N91 musicphone will now have 8GB of storage. And their August purchase of Loudeye suggests they want a chunk of the iTunes business. As Om Malik posts,
Hardware is only part of the equation, and senior Nokia executives acknowledge that the company has to build an enhanced experience around their devices. This involves a building better software, and more value added services such as its new music discovery and recommendation service that will be curated by David Bowie and will feature selections from independent music stores from around the world.
Which brings me back to my recent purchase of the Sony Ericsson W810i – a Walkman phone. I won’t bother to do a full review of the phone, as there are many in-depth reviews available online. But this phone does a lot to revive Sony’s Walkman™ brand.
On my recent flights to and from Vancouver, I used the phone in Music Only mode for most of the trip – with neglible impact on battery life. (Approximately 5 hour flights each way.) I’d loaded the music from my PowerBook’s iTunes library via the USB cable (granted, I did this manually). Although rather slow (more USB 1 than USB 2), the transfer was relatively painless – and it charged the phone while doing the transfer. (In the future, I’ll transfer to the phone using a card reader – and probably add a 2GB Memory Stick Pro Duo card in place of the 1GB. They are relatively cheap.)
iTunes Digital Rights Management issues are a bit of pain with the Sony Ericsson phone. I would have loved to listen to the new BNL album that I’d just downloaded from iTunes. (Had I bought the files from BNL’s own download store, I wouldn’t have been faced with the DRM issues. Oh, well.) And there are ways to circumvent the DRM…for personal use only, of course.
However, combine a good 2MP camera, great SMS device, easy iSync of contacts, Calendar, etc, EDGE modem and EDGE/GSM world phone, with an easy to use Walkman – all in a package a third the size of my 3G iPod and I have to ask the question, why would I bother to travel with my iPod. All my tunes are on my laptop, which is always with me – loading tunes is easy – and I have all the other productivity tools available in this tiny music phone device…including a radio, for heaven’s sake. (It would be great if there was a stereo-mini plug on the phone, rather than having to use the Handsfree cable – and a combination car-charger with stereo-mini plug would be a welcome accessory.)
I’d love it if the phone could sync with iTunes. I’d even pay Apple $50 to $75 for the privilege. But tune transfer is not that big a deal on the Mac – and Sony Ericsson provides software for the PC that makes syncing easy for that platform.
All of this to say, that as much as Steve Jobs’ Reality Distortion Field dominates news media coverage of iPods – calling them the MP3 player market leader – and as great as iPods are, the actual reality is – musicphones dominate the portable music player market – and their market share will only become greater.
Why carry multiple devices, when one multi-function device can do the job as well or even better. Which is why we can expect Apple to release a killer musicphone as soon as they possibly can. Steve Jobs knows the real numbers, knows what’s coming from Nokia, Motorola, Samsung, LG and Sony Ericsson – and knows full well Apple must be a force to reckon with in this market – if he’s to maintain the illusion of Apple’s dominance of the portable music player market.
The iPod is dead. Long live the iPhone!
UPDATE: From the comments section on Jackie Danicki’s blog post, from Tomi Ahonen, the writer of the quoted Engagement Alliance post:
The iPod market share (as of June 30, 2006, down to 14%) was my analysis, from official Apple numbers, official Nokia, Motorola, Samsung, SonyEricsson, LG numbers, Creative Labs; and some analyst numbers from Gartner and Informa.
Before I started to discuss this view point, all analysts kept the iPod and music phones as separate markets. Since I started to make noise about it, very many major sources have now come to the view that musicphones and the iPod are part of the same market, including the Financial Times, Business Week, Fortune, Economist etc. Apple’s own CFO Peter Oppenheimer says that Apple tracks musicphones and mentioned the SonyEricsson Walkman phone by name as a direct rival to the iPod, in Apple’s quarterly conference call in July. [emphasis added]