Parks Associates Blog

Wednesday, September 10, 2008

New iPods and Zunes Upcoming, Why Bother and Will Consumers Bite?

Apple unveiled its new iPod lineup yesterday. But media and Apple fans seemed to give a yawn to the event. No more “one-more-thing” hype and exuberance in San Francisco yesterday. Even the stock market slapped down Apple shares ruthlessly amidst overall market slide.

One or two days before Apple’s scheduled product showcase, Microsoft announced its third-generation Zune players. Despite the fact that Zune has never reached even one-tenth of iPod sales volume, Microsoft has been patient and persistent in its catching-up game.

Early adopters and tech junkies might already feel bored about the whole MP3 player category. The entire industry’s attention is on the sexy iPhone and its many copycats and would-be killers. True. If you look at MP3 player penetration among all households, it already crossed the 40% mark in early 2008 based on Parks Associates’ National Technology Scan survey. The growth will slow down, inevitably. That’s also true.

But the press and the pundits missed a point. Behind these tiny and shiny gadgets is a gigantic and still-under-tapped digital content distribution market, and portable devices are the first and will continue to be an important platform to groom it till it explodes.

Back to the hardware, both makers have made important upgrades, from form factor to functions, from user interface to experience-enhancing new features. They lowered the prices too. Although the new devices are less alluring in the eyes of technology aficionados, the other 60% of the U.S. households will find bargains and better values after a not-too-long waiting period (two years, perhaps). Yes, the growth curve will flatten out, but 50-60 million iPods a year for Apple is not bad at all, definitely an envy to other players in the field.

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