Russell Beattie, one of my dear friends, has come to this conclusion that Microsoft and its DRM strategy are ultimately going to be winners and will leave Apple’s iPod and iTunes music store grappling at straws. Russell, when he writes about mobile phones and wireless technologies is seldom wrong, but I take umbrage to his conclusions. His reactions, and perhaps others who think along those lines – its 1984 all over again – are off a tad.
Russell thinks that by kowtowing to Microsoft, the companies like Yahoo are losing their place on the table, and helping Microsoft create another monopoly. I am not so sure – because I am not convinced that Microsoft’s scorched earth strategy is going to work – as long as we have the iTunes option.
Remember it hasn’t worked in Mobile Phones. Symbian continues to outsell Windows Mobile handsomely. Same in the digital music world – once you have seen or used an iPod, you know the better option. In the PC era, Apple’s strategic mistake was pricing, not the product. Well, this time around Apple got the pricing right.
By the virtue of my job as a senior writer for Business 2.0 I am exposed to many a few new technologies and gizmos. I often get to try them out. For instance, last week I had a chance to play with some of the upcoming Archos digital music devices, and this weekend had a chance to play with Toshiba’s GigaBeat player. I have seen many a few players come to the market, and well lets just say, I would not buy them. I am not a technology dimwit, (or at least I like to think that) and still I had trouble navigating and using these devices. They are despite appearances boring and lack the ‘take my dollars appeal’ of iPod. If you are a device maker – you basically don’t have the uniqueness that would make you stand out. (Creative Zen comes close, and is worth your time, but others….)
Lets turn to the whole experience of using Microsoft’s DRM and Windows Media Player. Whether you are using one device or the other, it doesn’t make much difference. The uniformity of the subscription music services is yet another reason why many devices and services are simply too ‘me too’ in nature. Some are arguing that even record companies should get into online music distribution business themselves. On the Windows platform, it takes some effort to get the whole music thing going. In other words, the complexity of these devices mimics challenges posed by Microsoft Windows. There is going to quite a bit of consumer confusion when it comes to digital music service – subscriptions from Napster, Real or Yahoo? Hundreds of devices to choose from? On the other hand: iPod, which you know works – – yes even on a Windows machine it simply works.
And perhaps it is time to step outside the hothouse of Silicon Valley, and look at consumer behavior at large. (Never mind the fact that as consumers, we have historically wanted to buy our music, and not rent it!) When dismissing iPod’s chances in the future, it is easy for the technorati to overlook the iconic status of iPod, which believe it or not is available in many shapes, sizes and prices. It is has the same status appeal, the very same cachet as say a Burberry plaid, Zegna sports coat, and Armani cologne. It has the same ‘sensory’ appeal of a Mini, or a BMW, at prices which can be deemed affordable. Now if you have been watching the retail trends, you can see the world has been focusing on ‘affordable luxury.’ Gucci clutches and Coach handbags – as long as they stay below the $500 price tag, are flying off the shelves. iPod is no different. But lets look beyond the world at large.
One last thing – to think that guys at Apple, including Mr. Paranoid are not going to do something about these competitors is short term thinking. Didn’t someone just mention that PlayStation3 and Apple iTunes might be getting cozy?