A brief historical past of the songs in our pockets — and the way late-comer Apple got here to dominate the enterprise of transportable music
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In 1978, engineers at Sony efficiently married a compact playback system with light-weight headphones to create the prototype for a product that may grow to be a worldwide hit. In 1979, the ‘Walkman’ was launched within the Japanese market, promoting out its complete inventory of 30,000 models inside the first three months.
Sony stored apace with its rivals. For a decade after its launch, Sony’s Walkman retained a 50% market share within the U.S. (46% in Japan) in an area teaming with rivals, even because it loved a worth premium of roughly $20 over rival affords.
Soar forward to the late Nineteen Nineties, when the solar had set on cassettes because the favored music supply format in favor of compact discs and, for the technologically savvy, digital mp3 recordsdata. However digital companies across the globe had been betting that the CD would quickly comply with the cassette into extinction. Which mp3 participant would get there first and grow to be the subsequent ‘Walkman’?
In 1998, South Korea’s Saehan Info Programs created the primary transportable digital audio participant, MPMan. It bought 50,000 gamers globally in its first yr. By the launch of the iPod in 2001, there have been roughly 50 transportable mp3 gamers obtainable within the U.S.–and no agency had achieved anyplace close to the dominance that the Walkman had loved 20 years earlier.
In comparison with the Walkman and cassettes, the story was very totally different for mp3s. You could not buy them in conventional retail settings. Downloading an album–legally or not–could be a multi-hour affair. It did not matter that MPMan was first–it would not have mattered in the event that they had been sixth, twenty third, or forty second. With out the widespread availability of mp3s and broadband, the worth proposition couldn’t come collectively.
The MP3 participant market did ultimately consolidate round a dominant product, Apple’s iPod. However the iPod, launched in late 2001– three years after the MPMan–was something however a primary mover. How can we perceive the iPod’s success regardless of its delayed entry?
IPOD WINS … THREE YEARS LATE
Apple waited, after which waited some more–until it lastly made its transfer, placing the final two items in place to create a successful innovation: a horny, easy system supported by good software program. Steve Jobs knew that, by itself, the mp3 participant was ineffective. He understood that, to ensure that the system to have worth, different co-innovators within the mp3 participant ecosystem first wanted to be aligned. And, in October of 2001, when Apple introduced the iPod, these items had been solidly in place: each mp3s and broadband had been lastly broadly obtainable.
The primary technology iPod for Macintosh retailed at $399, had 5GB of capability, and will retailer as much as 1,000 songs. It boasted an intuitive interface design and was, for its time, light-weight. However the worth of the system was cemented by its seamlessness with the iTunes music administration software program. Regardless of being obtainable just for Mac customers, the iPod was the quickest promoting mp3 participant to ever hit the market.
In April 2003, Apple introduced the iTunes Music Retailer, a web-based retail hub the place clients may browse and buy music for 99 cents per music (or $9.99 per album). By 2005, iTunes’ library had grown to 1.5 million songs. Though Apple would make scant revenue from promoting songs at 99 cents per obtain (it had bought almost 8 billion songs by the tip of 2009 however, with Apple’s ten p.c fee, that solely interprets to $800 million in revenue–before accounting for the price of operating the shop; trivial when in comparison with $22 billion gained in iPod gross sales at the moment, the iTunes retailer gave the iPod legitimacy in a world of shady mp3 accessibility.
In accordance with NPD Group, gross sales of transportable CD gamers had been nonetheless greater than double these of mp3 gamers through the vacation season of 2004. However between the third quarters of 2004 and 2005, gross sales of the iPod had leapt 616%. As the identical buyer base stored repurchasing new and higher iPods, Apple’s earnings soared: by 2008 it had captured 48% of the mp3 participant market share. SanDisk’s Sansa mp3 participant was the iPod’s closest competitor with 8% market share.
Few would deny that the iPod is a superb product, surpassing another mp3 participant providing. However is it six occasions higher? Apple was, in any case, three years late. However maybe this logic ought to be flipped: maybe everybody else was three years too early. As we’ll see once more within the case of the iPhone, Jobs tended to be late for all the pieces as a result of he needed all the pieces to be prepared for him. Reflecting on catching expertise waves in 2008, he mentioned, “Issues occur pretty slowly, you already know. They do. These waves of expertise, you’ll be able to see them means earlier than they occur, and also you simply have to decide on properly which of them you are going to surf. When you select unwisely, then you’ll be able to waste a number of power, however if you happen to select properly, it really unfolds pretty slowly. It takes years.” Jobs’s self-discipline paid off. Within the three years between the launch of MPMan and the iPod, every factor within the mp3 participant ecosystem turned from pink to inexperienced. As an alternative of ready on the pink gentle with everybody else — squandering precious sources and time — Apple drove proper on via a inexperienced gentle in direction of victory, turning into, based on the Economist, “the Walkman of the early twenty first century.”
Excerpted from The Broad Lens by Ron Adner, Portfolio Penguin, 2012.
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