Mp3 Player Price War Looming


zenmicro10795-lblue_1_1_61.jpgDespite its best efforts, and might good efforts I must add, Creative Technology has failed to stop the Apple-roller coaster called IPod. In the key holiday season, the company sold around 2 million mp3 player including its sleek Creative Zen and MuVo products. (MuVo versus iShuffle), a distant second to Apple, which sold about 4.6 million devices. Still in the quarter the company saw its profits decline to $11.8 million from $41.5 million a year earlier. Sales increased 50% to $375.1 million from $250.4 million. News reports indicate that company is expecting a 50% increase in sales (not profits) for the first quarter of 2005. In order to do that, clearly the company will have to meet the challenge being posed by IPod, by cutting prices. Meanwhile others like iRiver have just come out with hot new products as well. Now all this doesn’t factor in the wild reception iPod Shuffle has had so far, and how it impacts the flash-memory based Mp3 player sales of non Apple vendors. Let the price wars begin!


Charlie Sierra

The only thing the working man has to fear are the MORONS in the corporate board room.

I must wonder how many Harvard MBA’s have approved of this STUPID strategy of competing on price.

Even that political wacko James Carvelle knows that when you are in a hole, the first thing to do is STOP digging.

Apparently, these moronic mgt teams have never heard of “behavioural finance”, etc., nor have they ever read Paco Underhill’s “Why we Buy”, or even “Trading Up”, or lest I forget my personal favorite Virginia Postrel.

The value prop of the iPod is nowhere near as crass as a “low price”, its an intangible.

By continuing to compete on price, these jackass competitors only enlarge the gulf between themselves and Mr. Jobs. They are playing right into his hand.

If mgt morons had a clue they would match the iPod’s price and then imbue their product with different mix of intangibles.

The way to crack the iPod’s strangehold is to discredit its intangibles, not highlight them.

Focus not on your product per se, but what consumers feel or derive from your product.

Competing with powerful internized intangible attributes with the blunt force of lower prices is just plain stupid.

Apple fully understands that the iPod is a proxy for something much larger in scope than merely playing music. You would think after several years, somebody else would’ve noticed this.

Om Malik

Wow, 2 million actually sounds like a lot. I’ve still yet to meet someone who’s mp3 player isn’t white.

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