IPod Rivals Square Off Against Apple
By Brian Garrity / September 18, 2004
NEW YORK (Billboard) - The next wave of iPod competitors is coming.
A new generation of smaller, sleeker and cheaper MP3 players from the likes of Sony, Rio, Creative and Rave MP are hitting the market this fall, and they all have Apple Computer's white-hot digital music player in their sights.
The iPod has a stranglehold on the market. But consumer electronics rivals are banking on a jump in sales of their alternatives this season, thanks to the proliferation of other companies trying to sell and market digital music.
"The market is definitely heating up," Rio VP of marketing Dan Torres says. He predicts that music service providers will be a "key driver" of device sales.
Digital music services from MSN, Sony Connect, Wal-Mart, Napster and MusicMatch are not compatible with the iPod -- all but Sony's use Microsoft's Windows Media format.
But device-makers are racing to the market with a range of products they hope will solve the portability issues for iTunes alternatives -- and eat into the iPod's market share in the process.
EXPANDING PORTABILITY
Ted Cohen, senior VP of digital development and distribution for EMI, believes there is room for multiple players in the portability market. "We haven't even touched the surface yet of what the appetite is for portable devices," he told Billboard in a recent interview.
Indeed, many of the new iPod alternatives are not trying to compete with Apple's player at the high end. Instead, they cater to consumers who are choosing between less expensive, lower-storage-capacity flash-media players that carry hundreds of songs and pricier, entry-level hard-drive players that hold more than 1,000 songs.
"Not everyone needs a 40-gigabyte player," one label executive notes, "and that's where companies are seeing opportunity."
The biggest name chasing Apple this fall is Sony.
The company just released a new 20GB hard-drive player, the Network Walkman NW-HD1, and it is banking that its brand power will make it a strong alternative to Apple.
The NW-HD1, which retails for around $400, is starting to show up at stores including Target, Circuit City and Sears.
Sony touts the palm-sized player's battery life -- 30 hours, more than twice the iPod's -- and Sony-patented shock protection.
On top of a range of portable CD players and MiniDisc players that play back digital music files, the company just released a new flash-drive player, the Network Walkman NW-E75, for less than $200.
Likewise, Rio -- Apple's biggest competition in digital music players -- is attacking the market this year with hard-drive and flash players.
Rio is coming at Apple on the hard-drive side with a rival to the iPod Mini -- the $249 Rio Carbon. Rio says its device has 20% more memory than the Mini and 20 hours of battery life compared with eight hours for the 4GB Mini.
Rio is also introducing an updated version of its flash player, the Rio Forge. The device targets users with active lifestyles, and the 256MB version costs $169.
GoVideo is taking a similar strategy with its new line of Rave-MP flash and hard-drive players. It has distribution with the likes of Costco and Wal-Mart and plans to price its products aggressively. Its new 256MB flash-drive player costs $129, while a 5GB player expected to hit the market later this year will cost an estimated $229.
HOT FLASH
Device-makers and music industry executives point out that with flash memory storage prices dropping, flash players figure to be a significant portion of the digital music player business.
"Flash is going to be here for a while, because it's more affordable," Kelly Davis, product manager for Sony Electronics,says. "People are trying to get more capacity for their dollar."
Rio's Torres points out that cheaper flash prices are also leading some consumers to purchase more than one digital music player -- a flash player for the gym and active situations and a hard-drive player for power use.
Meanwhile, many music services competing with Apple are attempting to be compatible with as many of these devices as possible. Leading the way is Microsoft's MSN Music Store, which claims compatibility with more than 70 different devices.
Reuters/Billboard
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