Is Apple's iPod Dominance Sustainable?
The Consumer Responds
As Microsoft and others prepare to enter the portable digital music player (DMP) space, and as Apple turns its attention to other market spaces such as the digital home, a window of opportunity opens for competitors to mount an assault on iPod's dominance. However, iPod users are an extremely loyal lot and gaining market share will depend heavily upon convincing new DMP users to switch brands, a challenge that will prove very difficult.
According to The Diffusion Group's latest report on digital media, "Is iPod's Dominance Sustainable?," The Consumer Responds, the sheer pull of the iPod brand on the consumer imagination will suffice to maintain market dominance for at least the next five years.
"While there are a number of reasons why consumers select the iPod, the two most important are the quality of the interface and brand familiarity," said Dale Gilliam III, a digital media analyst with TDG and author of the new report. "The fact that the quality of the user interface continues to the primary driver is not surprising – Apple has long produced devices that offer simple navigation and are easy to use. However, the fact that brand familiarity ranked so highly (20% greater than last year) was particularly noteworthy."
As Gilliam explained, this is likely due to the fact that brand recognition resonates more strongly among mainstream consumers. While early adopters are less inclined to buy on brand – instead drawn to qualitative attributes such as the interface – mainstream consumers are significantly more likely to look to brand familiarity to help guide their purchase decisions. "As long as the iPod is the most familiar DMP, it will be the default choice for most new buyers."
The challenge for new market entrants such as Microsoft's Zune will be to grow the level of consumer familiarity with the product as rapidly as possible – a deceivingly simplistic mission which requires tremendous investment in marketing efforts both upfront and on a continuing basis. "If a company wants to compete with iPod," noted Gilliam, "the primary battleground will be consumer mindshare, something which Apple has proven particularly adept at capturing and holding."
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