Creative and Sony are currently trying to climb Everest in a raging MP3 storm. Only one will make it to the #2 slot.
The battle for control of the portable music market is intense on one hand we have the Apple iPod which over night revolutionised the music industry on the other hand we have the likes of the Creative Zen Vision M, which Creative Technology is desperately trying to emulate Apples success with. Then there is the old King the Sony Walkman. So who will get the #2 slot?
The only problem is that 75% of portable music buyers have sided with Apple and purchased an iPod for both music and video. While Creative has tried hard to crack the MP3 market they are struggling and during the past 18 months they have made big losses which over time will impact their R&D capability. For Sony there is a big chance that they will take the #2 slot leaving Creative and others to wallow in what could be.
Creative is struggling and even the new Creative Vision M portable player is desperately trying to emulate the look and feel of the iPod and as Creative plays catch up to Apple major Hi Fi manufacturers like Jamo, Harmon Kardon, Denon and Bose are delivering a new generation of iPod accessories that make the iPod an absolute must have because of its ease of use, design and functionality.
For consumers the risk is that if one buys a Creative portable music or video product you are not going to have access to a new generation of portable music in car or at home accessories which are all being designed around the Apple 17pin connector which allows the iPod to be connected with an iPod accessory made by a third party manufacturer.
The Vision:M is has all the bells and whistles that a portable media player should have and the most notable feature is the video playback file support which easily handles MPEG, DivX, XviD, WMV9, and Motion-JPEG but at the end of the day it will not sell well up against the iPod.
Why? Firstly Creative Technology tips money into retail price off advertising in catalogues or into PR so that people like me give them free publicity in the form of product reviews. But they don’t spend money high profile brand marketing which is critical in the portable music market. In fact they don’t have a clue how to build a brand. The mentality of this Company is all built around channel incentives but the problem is every one is walking into stores and asking for an iPod because of the status symbol kudos which has been created through brand advertising and word of mouth promotion as Gerry Harvey revealed when announcing his latest results.
The retailers will take the Co-Op dollars from Creative but when it comes to selling a portable music player they will 9/10 times sell an iPod. Which is why Creative is now looking at opening their own stores.
Another Company that is feeling the Apple blowtorch is Sony the one time king of the portable music market. They do know a lot about brand advertising but for them it is the product that is not stacking up. Unlike Creative who prefers to copy the iPod Sony is attempting to do something a little different.
It might have been a coincidence, but it still must have hurt. Sony last year booked a Tokyo nightclub for the unveiling of its latest Walkman music players. But halfway around the globe in San Francisco, just hours before Sony turned on the strobe lights, Apple introduced the business-card-sized iPod Nano. Although the Nano isn’t aimed at precisely the same market as the new Walkman, many saw the confluence of events as deeply symbolic.
Here was Sony the Japanese electronics giant that had pioneered the portable music market 26 years ago taking yet another body blow in a fight that it should have dominated.
Today, although iPod is still kicking the stuffing out of Walkman, Sony’s offering is finally putting up a decent fight. In January, Apple had 45% of the Japanese market for digital music players, vs. 15% for Sony. That’s a modest improvement for the Japanese company, from the 53%/11% split a month before the new Walkman hit store shelves.
Sony is hoping the new machine will help the company find its groove. This year Sony plans to introduce several new Walkman into the market though execs decline to give any details of the launch dates for Australia. The three models, with disk drives ranging from 6 to 20 gigabytes, would broaden Sony’s line up. For Sony, this is no routine makeover. In September, Sir Howard Stringer, Sony’s new chief, declared the player one of the company’s main weapons against commoditisation.'' To break the new Walkman out of commodity status, Yujin Morisawa, a designer who was just three years old when the original Walkman came out in 1979, sketched a curvaceous shell that looks something like a smooth river stone.I thought, ‘How can I give shape to the music?”’ Morisawa says.
Other team members brainstormed new ways to organise music and came up with an Artist Link'' button, which analyses your music tastes and suggests new artists you might like, and aTime Machine Shuffle,” which plays only music from a given year.
Like the new Creative Zen Vision M the new Walkman has some serious disadvantages. About the size of a deck of cards, Walkman is bigger than the iPod, but it offers just 20 GB of storage space (enough for about 5,000 songs) compared with the Apple machine’s 30 GB.
The new Walkman is better than what Sony had before, but I don't think that many people are going to go out and buy one,'' says Ming-Kai Cheng, an analyst at brokerage CLSA. And with the latest iPods offering video, the music-only Walkman has more catching up to do. By 2007, predicts researcher iSuppli Corp., 55% of all music players will also show video, up from 5% last year.Video is now standard because Apple includes it,” says iSuppli analyst Chris Crotty. “You have to match Apple, at least, to compete.” The iPod’s elegant click-wheel, simple software, and countless adapters to plug into a car or home stereo have helped give Apple an edge, too. In 2005, Apple shipped more than 32 million iPods worldwide, says researcher Gartner Dataquest seven times Sony’s forecast for the Walkman for its fiscal year ending Mar. 31.
Facing numbers like that, even a distant No. 2 might well be considered a victory for Sony. But for Creative it’s back to the drawing board and more losses.
