It was a while since there were any new prophecies about the end of Apple. In this case Billboard, the historic American music newspaper, shoots a cannon fighter against the music, with the implication that the end of that sector makes Apple lame and perhaps mortally wounded. Nothing compared to the past (remember the prophecies about the six months of life of Apple, which were published every two or three months?) But an interesting signal and a reasoning that is worth following.
Antony Bruno the journalist in charge of writing the piece (made with the Reuters agency), entitled "Digital opponents ready to bite the Apple". The service attack: ?Enjoy it as long as it lasts. This is the message addressed to Steve Jobs, CEO of Apple Computer, from almost all the other companies in the digital music space that compete to gain the attention of consumers after several years of absolute domination of the iPod and iTunes ".
Why does Apple enjoy it as long as it lasts? What is going to happen? According to the columnist, Apple now dominates the scene – 80% of the digital reader market and 75% of online music sales – but the picture is set to change within the next 12-18 months. The reason? "It is inevitable that market shares will decline over time," says Piper Jaffray analyst Gene Munster, adding: "It is impossible for anyone to sustain a market share of more than 80% for more than two-three years in consumer electronics ".
But the heart of the reasoning elsewhere, buried deep in the strategies of record companies. These support Apple but they would also like to want to see it on the ground. Because the end of the iTunes era means market maturity. Based on two arguments.
The first that Apple is too rigid with its pricing system and sales channels. Only iTunes Music Store and only iPod, only Fair Play (Apple's license) and nothing for other stores or readers. In practice, even if the iPod is the most widespread (but the margins of market growth are still huge) it binds to iTunes and vice versa iTunes binds to iPod. This makes it impossible to negotiate with Apple, which would show itself too arrogant and rigid in its dealings with record labels.
Second point: the market. Today, Apple celebrates half a billion songs, but the total number of online music sales is 2% of the total market. In 2009 it will have to be 25% and Apple cannot – according to the newspaper – "pump" millions of songs a day. And not even iPod users to buy them. There are 20 million users, who buy on average nine songs a month. Too little and no growth margins, Apple is unable to sell enough iPods to saturate the market. And if Apple doesn't make it, the record companies think, others will have to do it.
A market with more alternatives a more lucrative market, especially for record industries. But to get there, Billboard argues, other "strong" actors are needed. Before that in digital stores in the face of music readers. And here the donkey falls, because despite his efforts, nobody can defeat iPod. We especially try the Korean Creative Labs with its new line, which can also show the video, but does not exceed the 9% threshold. The company, which in the past has also overtaken Sony, is trying, just as the same Sony (who pays considerable errors of strategy but enjoys a good market base in Japan) and Samsung, the Korean ammazzasette able to excel in any segment of consumer electronics in which it has ventured.
And Apple? Does Steve Jobs give up without a fight? Next Christmas will be the test bed of what awaits the home of Cupertino, which in September, according to the Billboard, will launch the iPod video, then the longed-for Motorola phones with iTunes will arrive and finally, perhaps, even an agreement with Microsoft on the Xbox Live service front to download the music on the new Redmond consoles. Apple, in short, does not make to put the feet in the head so easily, lotter until the end. But an end, as with all things, will come. The prophecy is not completely negative, it does not claim that Apple will close the barrack and puppets, but it is close.