[DRSpeed85]

Intro

As a business major, I've been following the DAP industry for quite some time now and during the course of this year, I've been getting a feeling the DAP as a whole is in some sort of decline. It definitely isn't having the kind of buzz it had last year. And I came across this article which seem to confirm my suspicion.

http://www.engadget.com/2006/12/12/i...ng-to-succeed/

"Everybody has an iPod"

Alot of people here in college, nerd and casual alike seem to agree that iPods are no longer "hot". They were definitely not excited about picking up a new ipod or even a zune over thanksgiving break. I reckon that people between the age of 18~30 had a huge role in the popularity of DAPs and it is pretty noticable when this group isn't as enthusiastic about them. The video ipod didn't create much buzz compared to it's predecessor, yeah the one with the color screen and neither did the latest ipod nano. Most people with ipods don't have more than 5 to 6 gigs worth of music and they're well aware that spending hundreds to upgrade to the latest ipod just isn't worth it. Also the near universal adoption of the iPod has quickly eroded it's appeal. This thought was shared on headfi for a few years now, but it is now starting to spread among the general public. If your dorm cleaning lady (no offense, seriously) starts using those ubiquitous white ipods with matching earbuds, that's a sign. But the interesting thing is, other DAPs aren't selling more either. This is a general decline.

Apple knows this

Clearly apple is well aware and was experimenting for quite a while. It ventured the unofficial "premium line", the ipod photo a few years back. It failed. They tried video with mild success and sort of tried to sell the audiophile image through it's hifi and premium headphones. They still continue to look to diversify with the upcoming "video ipod" and "ipod phone. Neither of these are products guarnatee a success and they do seem to be joining the scene pretty late. The video player has been tried for years and the music phone is already around but seems to compete for attention with actual ipods and instead remain a novelty since people would rather listen to the ipod.

A new competitor

At the moment, the ipod is competing with a product completely unrelated to it. No it isn't the zune. The latest generation of game consoles are the subject of most conversations these days. There is quite alot to buy too. You'll need/want an HDTV, a console, extra controllers, few games and lots of beer. This would easily cost you over a thousand which leaves no room for a second or third ipod.

Online content

Then there is online content. It looks like this is going to be the future. At the moment the consoles are quickly catching up with itunes, and I won't be surprised if this new breed of online content ends up out performing itunes very very soon. Unlike itunes, there is alot of room to maneuver for Microsoft and Sony because people would rather watch an HD movie on their HDTVs than their iPods. Same goes for next gen games and those smaller arcady games they sell there. These consoles keep people off the computer which might be a factor in this sharp drop in itunes music sales. In Sony's case this is what they wish would happen. Keeping people off their computers by providing all the services above AND let them use internet in their living room. No coincidence it doesn's support windows or itunes then.

...and the Zune

A significant part of the media seems to pitch it as an iPod competitor. It may be in the short run, but I have a different theory. Microsoft already has a pretty successful online content market via xbox live, if they can integrate that with the zune, then this will make the zune's killer feature app. I am sure this is integrated in the future plans for the zune because this was the feature rumored on the net before even the name zune got released. If it proves to be a success, Sony will follow with their own online content delivery through the PS3. By the time this happens, I don't think music will be the defining feature of these devices. I think a combination of music, video, mini games and some sort of wireless integration would be popular. For instance, letting you back up pictures from a digital camera through wireless and display it on the widescreen display these will almost definitely have. Now that would sell.

Thing is, I'm not sure how the iPod and iTunes fits in this picture.


Thanks for reading such a long post, I tried to make my thoughts sound as interesting as possible.

 

[vagarach]

I think your theory that the DAP is on its decline quite misses the point. Has the iPod reached market saturation? No, but it would seem that this is your line of reasoning. You are looking at the iPod like 'the' 'hot' product. It may have been a while ago, but yes, it no longer is as OMGAMAZINGBRILLIANT as it was in 2001. Hot products will always come and go, but the DAP (digital audio player) is here to stay.

You really can not say that a game console is a competitor to the iPod. Do consoles compete with the iPod for consumer dollars? Yes, but they are far from direct competitors. People do not go out looking for an audio player and come back with an xbox, unless the consumer finds that at the moment an xbox has higher utility per x dollars than an ipod does. They are not interchangeable goods.

Zune, well it's just another DAP, same capabilities (and more) as an iPod, but with no iTunes+store. Live integration is a niche market, to be sure, and so you can't take down a competitor with 70% market share with just this. Xbox Live works so well thanks to broadband that's always on, and wifi is not, and is subject to availability. Games, maybe, but picture playing them with nought but a 4 way dpad.

And finally, adding features has been the standard ploy for years. Look to cellphones. But multifunction devices taking over from single function devices? That's a forgone conclusion.

So yes, maybe the solitary mp3+fm radio box in your pocket is dying, but a player of digital audio won't ever.

[edit] Forgot to add that you must also address the iPod brand. Creative's CEO laughed at the Shuffle. It was a maybe $30 all-plastic mp3 player with iPod stamped on it. It sold like hotcakes. Apple is far, far from running out of steam. As for that catalytic article, checkout this other one that was dugg: http://www.blackfriarsinc.com/blog/2...ollapsing.html

 

[stewgriff]

No, the iPod isn't quite as "hot" as it was last year. But obsolescence takes its toll...isn't the Mini nearing the 2-year mark? Those hard drives have to die sometime, and its users are mostly the teen market that allowed Apple to dominate the market. Also, the Wikipedia article on iPods has a graph of iPod sales; current sales aren't close to the 14 million unit mark of Q1 this year, but are still pretty high.

 

[Zanth]

I think there is a decline in the "must have iPod!" line of thinking but I don't think there is an overall decline in the DAP market at all. In fact, the future will promote DAPs that can store entire libraries in lossless without a problem. Right now...my current library is at 2 TB or so maybe closer to 2.5 TB with lossless/mp3s mixed. If I could go all lossless...I would be in the 4 TB range. Granted this is more music than most would listen to in a lifetime but then I'm not most people and I listen to music about 16 hours a day (conservative estimate, likely closer to 18-20 most days).

What will happen is a merging of functions per unit. Apple will need to come out with a phone that can hold a ton of tunes and sound good. this will be for the casual listener, the on the go person who does not want to cart around a ton of stuff and/or the teen who wants the kitchy do it all cell phone thing.

For the music lover/audiophile...a stand alone unit will prevail and larger capacities, better software, better sound etc...will continue to sell. Add on full video with the future of imaging glasses and screen size won't matter because it will be optically based through the lense of the glasses appearing to be larger! The unit then will be the storage device alone.

 

[discord]

I don't care about the photos and videos. I just want an ipod with wi-fi.

 

[nikongod]

if the point of the white slab of garbage was to sell more white slabs of garbage, it would have shipped with the windows secure audio formats enabled.

the point of the white slab of garbage was to sell music in a proprietary format, in what is presently the most accessible way that is legal.

guess what, a lot of the people with ipods with only 5-6gb have bought a LOT of songs. when the white slab of garbage does its signature maneuver (breaks) if you want to play that music, you HAVE to buy another.

 

[fattyboobah85]

To proove the above posts point, I asked my girlfriend how much money she had spent upon itunes and she said somewhere between 300-400$

This just blew me away.

 

[ilovesocks]

Quote:

Originally Posted by nikongod /img/forum/go_quote.gif if the point of the white slab of garbage was to sell more white slabs of garbage, it would have shipped with the windows secure audio formats enabled. the point of the white slab of garbage was to sell music in a proprietary format, in what is presently the most accessible way that is legal. guess what, a lot of the people with ipods with only 5-6gb have bought a LOT of songs. when the white slab of garbage does its signature maneuver (breaks) if you want to play that music, you HAVE to buy another.

Exactly. They may not be selling as many iPods as they used to, but that's because everyone's got one. As long as people stick to their iTunes libraries, there will be a steady flow of sales to replace people's "old" iPods.

 

[zip22]

here is a rebuttle to your first link (in addition to the update posted at engadget)
http://www.blackfriarsinc.com/blog/2...ollapsing.html

nikongod, your chicken and the egg argument has one fatal flaw. apple was selling ipods before the itunes music store. in addition, the itunes music store has sold 1.5 billion songs over its life. in that same span, apple has sold 67 million ipods. that is roughly 22 songs per ipod. that is not a lot of songs. one or 2 cds is certainly not enough to convince me to stay with a brand. especially when i can just burn them to a cd. the ipod and itunes are sticking around, but its not because people are locked in. it is because people like what they got.

 

[discord]

Quote:

Originally Posted by fattyboobah85 /img/forum/go_quote.gif I asked my girlfriend how much money she had spent upon itunes and she said somewhere between 300-400$

That's intense stuff.

 

[Uncle Erik]

The DAP market is mature now. Five years ago, few people had them. Now virtually everyone does. Even my parents. I think the market is close to saturation.

Only something radically different will show the same sales growth again. Either that, or a steep drop in price on a particular unit. Which, by the way, Microsoft should do with the Zune. A $150 30GB unit would grab marketshare. Until then, it'll just be replacing old units and incremental upgrades.

 

[LFC_SL]

What's an i-Pod? lol, never owned an iPod

Excuse me now, I need to tend to my cave

 

[pds6]

Where things begin is never where they end. Your scenario is as reasonable as any. My only issue, I think Sony is dead.

Taken all your facts as true, is it Apple or the Music/Movie industry that needs a rethink.

Good Job

 

[Echopac]

Your pretense is flawed in as much as you are considering a very narrow product/market in a very compressed time period. You need to consider history and anthropology, and you will see there will be no bust, contrary, you will see a continuation of the evolution of personal audio.

Consider back in the late 1950's, Japanese companies were producing, marketing, and selling a compact transistor radio, which was the size of some of the portable headphone amps that are discussed by so many on this forum. This product boasted a two transistor amplifier, came in a stitched leather case, and included a mono earphone for personal listening. Let's skip over the Walkman and fast-forward to 2006, and what we see, is evolved technology with a market that has considerable discretionary spending.

What's in the future, don't know, but probably an audio player that incorporates other emerging technologies that meet the needs of the market for it's time in history.

No bust, only evolution.

 

[LFC_SL]

Echopac, what an intelligent and considered post! Tis true. I moved from cassette to CD, minor detour to minidisc before the current DAP thing. And I'm only 19!

Now I will be damned if on the eve of my 40th b-day we don't have brain implants