iPod vs. Cell Phone: Mobile Music

Has the digital music market irreversibly tipped in Apple’s favor?

No. Although, I think Apple has the advantage in this industry, I do not think that it is irreversible for several reasons. First, I think the digital music market can be split into two groups; people who want to own the music and people who like streaming music, i.e. Pandora, Yahoo Music and others. As of right now, Apple has the iPod, which at this point cannot have streaming music, so this eliminates this market. However, if Apple does create the iPhone, they will be able to further their market dominance.

However, this brings up another disadvantage of the iPod and that is not being able download music whenever you want. If cell phone carrier or Microsoft or Google; develop a mobile music device that can connect through the use of cell network or Wi-Fi internet, they will have a major advantage over the Apple iPod. This could enable the competition to steal Apple market share and establish themselves as the leader. The use of DRM’s can lock-in the customer but it can also scare away others. I think since Apple was the first to introduce this platform and gained the first mover advantage, they made it hard for consumers to switch platforms because of high homing and switching costs. On the other side, they have created anti-Apple sediment. So at the end of the day, I think it is hard to say what the actual net effect is.