The new “Apple is dying” meme

July 20, 2006 By

Heheh, I remember all through Apple’s history that people would say “Apple is dying.” Or worse.

This time Tomi Ahonen says the same thing with a very long (but excellent) essay saying the iPod is on decline. Why? Because of cell phones eating into iPod’s market share.

Tomi does have a point. I don’t have to look any further than the Nokia phone sitting on the table in front of me. It has a four gig drive.

At Reboot last year someone asked the audience “who is carrying a cell phone?” Every hand went up. Then they asked “who is carrying an iPod?” Only one or two hands went up.

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  • Tony

    “This time Tomi Ahonen says the same thing with a very long (but excellent) essay saying the iPod is on decline. Why? Because of cell phones eating into iPod’s market share.”

    The starting premise is OK – unify several devices into one. How many times has this been done with success? Mmm… that’s hard to answer. Did MPV/SUV/? do it for the car industry combining car/bus/truck? What about all-in-one media centers? Help me, I’m running out of solutions!

    And cell phones do have a useless UI for the most part – I like Sony Ericsson, my wife hates it but likes Siemens, and we both loath Motorola and Nokia. The gulf between the average cell phone UI and that of the iPod is sooo great why would I want to mix the two?

    Apple clearly thinks that some of the technology challenges can be overcome to make the cell phone more of a genuine universal device – battery life is getting better, touch-screens getting cheaper, solid state memory in large capacities getting small and cheap enough, and high performance wi-fi becoming slowly ubiquitous. None of this is quite ready for showtime but in 2 years?

    I’m hoping that Apple can bring some of its UI-savvy to the cell phone when it decides that convergence is ripe.

  • http://www.tomiahonen.com/ Tomi T Ahonen

    Hi Robert and visitors to the Scobleizer blog

    First, thank you Robert very much for the kind words. Coming from you as one of our gurus to the connected age – and you know we quote you in our book – that means exceptionally much to me (and Alan Moore, also a big fan of yours)

    Now for all here – I am that “culprit” who launched that “assault” on Apple? that original posting on iPod real global market share being only 14% today, and the enormous decline from 80% in 2004 has been due to the sudden emergence of the big five mobile phone makers launching musicphones.

    I don’t need to revisit the blog here – you can go read it. But I’ll comment on a few of the postings here.

    We were hit by a wave of Apple fanatics. We normally get about 300 visitors per day, yesterday we had 3000. Almost all of them from two Mac sites. And you can guess from the heated pro-Apple comments here, that almost all of the comments at our site were against us, ranging from the very intelligent analysis of facts to the “you are idiots” I replied to the first 32 of them and will respond to all.

    Goebbels. You say – try to read his “books” with books in quotes, as if they were not books? My first publisher, John Wiley & Sons, is the world’s largest publisher of technical books. All of my three Wiley books are hardcover editions, one also translated into Chinese, and another already into its second printing. All available at all major bookstores around the world? My second publisher is Futuretext, a niche publisher of future-oriented books in techology. Its book is also already into its second printing and being translated into Korean, German, Russian and Japanese. Why would you put my “books” in quotes? The British Chartered Institute of Marketing (the UK equivalent to the American Marketing Association) selected the book as one of the five best marketing books of last year. What do you mean “books”?

    I’ll be happy to send you the first chapter and the foreword by the Chief Marketing Officer of Coca Cola, so you can sample the book – (and anyone else who wants it) – send an e-mail to me at tomi at tomiahonen com – insert dots and @ sign where appropriate. I will send you the pdf (of the first chapter. I am not allowed to send you the full book ha ha, only my publisher does that)

    Ken B – the value system – you are very correct. In America this is totally backwaters. In South Korea already 45% of all music sold – not online music mind you, all music – is sold to mobile phones. The eco system is exactly that. The whole music industry is involved, the revenue-sharing is fair, and everybody gains.

    Spongechum – you found the key. South Korea and Japan are a year ahead of Europe, itself a year ahead of the USA on this.

    in general about “say something about Apple and the idiots show up” – I would tend to agree. In a year and a half of active blogging (my co-author has been at it much longer, I’m a relative newcomer to the blogosphere) we’ve never had the “you’re morons” argumentation except if its a posting about Apple. I don’t mind the logical reasoned comments, but yes, only on Apple topics have we received any “you’re idiots” arguments. We love Apple, we say so regularly, but still we’re the idiots.. There is a “trained dog” syndrome here. Some of the people at my site openly admitted they had not read the blog, they just joined into the comments. Thats sad.

    Goebbels – on the 2004 and 80% point. I think you’ve misunderstood – and I am fully willing to take the blame for that. I was not clear enough. Lets try really simply.

    In 2001-2002 no musicphones. Its Apple vs MP3 makers
    in 2003 musicphones appear, in South Korea. Apple still massive, gaining on its smaller MP3 rivals
    in 2004 Apple achieves its peak in terms of market share. Apple ships 8 million iPods and claims 80% market share. Still the big phone makers ignore the musicphone market as trivial

    In 2005 phone makers wake up. They all announce musicphones. By the end of the year they have shipped 90 million. Out of a total market of 119.5 million pocketable MP3 players sold in 2005, Apple’s 22.5 million iPods have a share of 18.8%

    Now first half of 2006. For every iPod sold, the phone makers sell six. Apple’s market share is 14% and dropping.

    I hope it was clear enough. No hot air, no missing numbers. All Apple numbers from Apple. All musicphone numbers from IDC/Informa the official source for the phone industry. Gartner, the other who counts phones worldwide has almost identical numbers. (Gartner usually a bit upside and IDC a bit downside, which is why I like IDC numbers more, they sound more realistic to me)

    W. Ian Blanton – I hope you listened to Apple CFO Peter Oppenheimer two days ago, when he clearly stated musicphones are already a threat and that Apple will release its own musicphone. Perhaps you could trust Apple’s own top management on this?

    Tony – I have dozens of examples of when this happened. Lets take them from just around you. Are you accessing the web on an (Apple) laptop? So your screen? It was once a separate device – CPU and display unit. The modem? Back in the early 1990s all modems were separate stand-alone devices – I was there selling them in New York when the internet suddenly emerged on the cover of Time Magazine now they are all inbuilt. So lets move to your camcorder? In 1985 all portable video cameras had SEPARATE video recorder units and cameras. The VCR unit was slung on the shoulder and connected by cable. How about your kids boom box? It has a tape player and CD player and radio? when CD players came in the mid 1980s, they were separate units. The boom box radio and tape deck? in the late 1960s when Philips converted the dictation machine media C-Cassette to a music device, they also introduce the radical concept of the radiorecorder. Still in 1974 the majority of cassette recorders were STAND-ALONE devices.

    No, we don’t have the combination submarine-airplane, but when its logical, devices do converge. I have dozens of examples more…

    Thanks Robert for posting the comments (and your patient replies here).

    Tomi Ahonen :-)

  • http://www.tomiahonen.com Tomi T Ahonen

    Hi Robert and visitors to the Scobleizer blog

    First, thank you Robert very much for the kind words. Coming from you as one of our gurus to the connected age – and you know we quote you in our book – that means exceptionally much to me (and Alan Moore, also a big fan of yours)

    Now for all here – I am that “culprit” who launched that “assault” on Apple? that original posting on iPod real global market share being only 14% today, and the enormous decline from 80% in 2004 has been due to the sudden emergence of the big five mobile phone makers launching musicphones.

    I don’t need to revisit the blog here – you can go read it. But I’ll comment on a few of the postings here.

    We were hit by a wave of Apple fanatics. We normally get about 300 visitors per day, yesterday we had 3000. Almost all of them from two Mac sites. And you can guess from the heated pro-Apple comments here, that almost all of the comments at our site were against us, ranging from the very intelligent analysis of facts to the “you are idiots” I replied to the first 32 of them and will respond to all.

    Goebbels. You say – try to read his “books” with books in quotes, as if they were not books? My first publisher, John Wiley & Sons, is the world’s largest publisher of technical books. All of my three Wiley books are hardcover editions, one also translated into Chinese, and another already into its second printing. All available at all major bookstores around the world? My second publisher is Futuretext, a niche publisher of future-oriented books in techology. Its book is also already into its second printing and being translated into Korean, German, Russian and Japanese. Why would you put my “books” in quotes? The British Chartered Institute of Marketing (the UK equivalent to the American Marketing Association) selected the book as one of the five best marketing books of last year. What do you mean “books”?

    I’ll be happy to send you the first chapter and the foreword by the Chief Marketing Officer of Coca Cola, so you can sample the book – (and anyone else who wants it) – send an e-mail to me at tomi at tomiahonen com – insert dots and @ sign where appropriate. I will send you the pdf (of the first chapter. I am not allowed to send you the full book ha ha, only my publisher does that)

    Ken B – the value system – you are very correct. In America this is totally backwaters. In South Korea already 45% of all music sold – not online music mind you, all music – is sold to mobile phones. The eco system is exactly that. The whole music industry is involved, the revenue-sharing is fair, and everybody gains.

    Spongechum – you found the key. South Korea and Japan are a year ahead of Europe, itself a year ahead of the USA on this.

    in general about “say something about Apple and the idiots show up” – I would tend to agree. In a year and a half of active blogging (my co-author has been at it much longer, I’m a relative newcomer to the blogosphere) we’ve never had the “you’re morons” argumentation except if its a posting about Apple. I don’t mind the logical reasoned comments, but yes, only on Apple topics have we received any “you’re idiots” arguments. We love Apple, we say so regularly, but still we’re the idiots.. There is a “trained dog” syndrome here. Some of the people at my site openly admitted they had not read the blog, they just joined into the comments. Thats sad.

    Goebbels – on the 2004 and 80% point. I think you’ve misunderstood – and I am fully willing to take the blame for that. I was not clear enough. Lets try really simply.

    In 2001-2002 no musicphones. Its Apple vs MP3 makers
    in 2003 musicphones appear, in South Korea. Apple still massive, gaining on its smaller MP3 rivals
    in 2004 Apple achieves its peak in terms of market share. Apple ships 8 million iPods and claims 80% market share. Still the big phone makers ignore the musicphone market as trivial

    In 2005 phone makers wake up. They all announce musicphones. By the end of the year they have shipped 90 million. Out of a total market of 119.5 million pocketable MP3 players sold in 2005, Apple’s 22.5 million iPods have a share of 18.8%

    Now first half of 2006. For every iPod sold, the phone makers sell six. Apple’s market share is 14% and dropping.

    I hope it was clear enough. No hot air, no missing numbers. All Apple numbers from Apple. All musicphone numbers from IDC/Informa the official source for the phone industry. Gartner, the other who counts phones worldwide has almost identical numbers. (Gartner usually a bit upside and IDC a bit downside, which is why I like IDC numbers more, they sound more realistic to me)

    W. Ian Blanton – I hope you listened to Apple CFO Peter Oppenheimer two days ago, when he clearly stated musicphones are already a threat and that Apple will release its own musicphone. Perhaps you could trust Apple’s own top management on this?

    Tony – I have dozens of examples of when this happened. Lets take them from just around you. Are you accessing the web on an (Apple) laptop? So your screen? It was once a separate device – CPU and display unit. The modem? Back in the early 1990s all modems were separate stand-alone devices – I was there selling them in New York when the internet suddenly emerged on the cover of Time Magazine now they are all inbuilt. So lets move to your camcorder? In 1985 all portable video cameras had SEPARATE video recorder units and cameras. The VCR unit was slung on the shoulder and connected by cable. How about your kids boom box? It has a tape player and CD player and radio? when CD players came in the mid 1980s, they were separate units. The boom box radio and tape deck? in the late 1960s when Philips converted the dictation machine media C-Cassette to a music device, they also introduce the radical concept of the radiorecorder. Still in 1974 the majority of cassette recorders were STAND-ALONE devices.

    No, we don’t have the combination submarine-airplane, but when its logical, devices do converge. I have dozens of examples more…

    Thanks Robert for posting the comments (and your patient replies here).

    Tomi Ahonen :-)

  • Christopher Coulter

    Apple is a survivor…

    The new meme, in light of the $40 billion pay back, and Xbox drain and R&D bloodlet, and Vista delays…be Microsoft is dying.

    Or in ‘party like it’s 1999′ Wired-style…

    Apple Dead – Tired
    Microsoft Dead – Wired

  • Christopher Coulter

    Apple is a survivor…

    The new meme, in light of the $40 billion pay back, and Xbox drain and R&D bloodlet, and Vista delays…be Microsoft is dying.

    Or in ‘party like it’s 1999′ Wired-style…

    Apple Dead – Tired
    Microsoft Dead – Wired

  • http://argolon.com/ Conor O’Neill

    Until recently, I did think phones were going to kick iPod’s ass but my experience with my Nokia N70 proved that the phone makers have a looooong way to go.

    The music player on the N70 is utter rubbish, it looks like it was slapped together in a few weeks by an intern. Any of the third party ones I have tried have a UI designed for non-humans.

    I have to buy an adapter for the phone to use normal headphones and the cover on the MMC Card slot looks like it cost 0.005c to make and will be broken in no time.

    These are simple simple things that Nokia just refuses to get right and until they do, they have no hope against Apple.

    Having said that, I think Sony-Ericsson may be on the right track with the Walkman phones.

  • http://argolon.com Conor O’Neill

    Until recently, I did think phones were going to kick iPod’s ass but my experience with my Nokia N70 proved that the phone makers have a looooong way to go.

    The music player on the N70 is utter rubbish, it looks like it was slapped together in a few weeks by an intern. Any of the third party ones I have tried have a UI designed for non-humans.

    I have to buy an adapter for the phone to use normal headphones and the cover on the MMC Card slot looks like it cost 0.005c to make and will be broken in no time.

    These are simple simple things that Nokia just refuses to get right and until they do, they have no hope against Apple.

    Having said that, I think Sony-Ericsson may be on the right track with the Walkman phones.

  • Tony

    Tomi Ahonen says: “I have dozens of examples of when this happened. Lets take them from just around you.”

    The problem I have as is that all these examples and others are actually transfers from business to consumer usage. And it is this that drove change. However today the market is for new products specifically for consumers not derived from business products. Modems were/are one trick ponies so were analogue camcorders.

    My kids boom boxes? iPods. My kids cell phones – used too much as phones to make it as music devices.

    Some cross-over is likely – will it be digital camcorders that subsume digital cameras or vice versa? But universal devices? I remember Apple touting the Scully dream machine – the Navigator, anyone remember that? The ultimate in wireless universal devices. Are we much nearer in getting there than 15 years ago? Not much.

    So excuse my scepticism but 40 years in IT has cured me of the industry’s eternal optimism.

  • Tony

    Tomi Ahonen says: “I have dozens of examples of when this happened. Lets take them from just around you.”

    The problem I have as is that all these examples and others are actually transfers from business to consumer usage. And it is this that drove change. However today the market is for new products specifically for consumers not derived from business products. Modems were/are one trick ponies so were analogue camcorders.

    My kids boom boxes? iPods. My kids cell phones – used too much as phones to make it as music devices.

    Some cross-over is likely – will it be digital camcorders that subsume digital cameras or vice versa? But universal devices? I remember Apple touting the Scully dream machine – the Navigator, anyone remember that? The ultimate in wireless universal devices. Are we much nearer in getting there than 15 years ago? Not much.

    So excuse my scepticism but 40 years in IT has cured me of the industry’s eternal optimism.

  • http://littlescrapsofpaper.blogspot.com/ Greg

    I remember grad school orientation in 1996 when the school’s IT guy was advising students on computer options. He recommended Macs and the audience reacted as if he were suggesting we book passage on the Titanic.

  • http://littlescrapsofpaper.blogspot.com Greg

    I remember grad school orientation in 1996 when the school’s IT guy was advising students on computer options. He recommended Macs and the audience reacted as if he were suggesting we book passage on the Titanic.

  • http://www.merchantsmirror.com Ben Hwang

    UI design has a ways to go for mobile phones, but their biggest hurdle which will not be overcome in a while is battery life.

    Transmission to base stations take up too much power. Music is very secondary. For those that actually carry music players, you would want the full 8 hours of play time for a work-day/commute etc. Phones just don’t have that kind of power due to it’s actual use.

    And Rob knows who I work for. heh. I suppose if you’re just the occasional music listener, then you won’t need a player device (iPod, whatever Creative has these days, etc).. For those of us that keep their whole life’s worth of music on a device? I’m still waiting for fuel-cells or cold fusion. Until mobile devices have better power, having all-in-one devices are utter wastes of time.

  • http://life.firelace.com darkmoon

    UI design has a ways to go for mobile phones, but their biggest hurdle which will not be overcome in a while is battery life.

    Transmission to base stations take up too much power. Music is very secondary. For those that actually carry music players, you would want the full 8 hours of play time for a work-day/commute etc. Phones just don’t have that kind of power due to it’s actual use.

    And Rob knows who I work for. heh. I suppose if you’re just the occasional music listener, then you won’t need a player device (iPod, whatever Creative has these days, etc).. For those of us that keep their whole life’s worth of music on a device? I’m still waiting for fuel-cells or cold fusion. Until mobile devices have better power, having all-in-one devices are utter wastes of time.

  • http://www.geise.com/ PXLated

    “Until mobile devices have better power, having all-in-one devices are utter wastes of time”
    Couldn’t agree more. I’m not about to waste my cell power on music, the phone is too critical. So, until battery tech gets much better this whole convergence thing is a mute point in my opinion. And, Apple isn’t/won’t be standing still, I would fully expect an iPod phone with a great UI once there is power to support it.

  • http://www.geise.com PXLated

    “Until mobile devices have better power, having all-in-one devices are utter wastes of time”
    Couldn’t agree more. I’m not about to waste my cell power on music, the phone is too critical. So, until battery tech gets much better this whole convergence thing is a mute point in my opinion. And, Apple isn’t/won’t be standing still, I would fully expect an iPod phone with a great UI once there is power to support it.

  • Nick

    >> Goebbels: the whole thing is more intelligent than anything you’ve said since.

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  • Nick

    >> Goebbels: the whole thing is more intelligent than anything you’ve said since.

  • Mike Johnson

    technically cell phones have all the parts – some now have a lot of flash, mp3 playback call capability. whats not to like?

    firstly I have robert’s much beloved audiovox windows smart fone. as a phone? awesome. it has media play – hmm. i could play mp3′s on this. so i upgraded the ram to 512mb mini SD. dumped a bunch of songs on it ranging from 128k to 320k songs. hit play and the speaker from the fone is aweful. I have gotten better sound from real audio or my kid’s speak n spell. so no speaker playback. i can deal with that.

    headphones will be so much better? nope. most cell phones do not standard headphone jacks – meaning I cant use a better class of headphones: no sony, no senheiser, no klipsch headphones – things that make my ipod better. audiovox? better luck next model….

    i have to use that stoopid audiovox “call” headphone that plugs in . if you dont buy the right one, cell headphone is mono – the executive set gives you stereo – no stereo music?!?!? WTF. secondly you cant move the condensor microphone out of the way.its in a “fixed” position so its always blopping against my face. on a redeye flight with the gentle rocking of the plane this transformed a gentle music cruise through the night from LA to toronto into something annoying to be polite.

    secondly the playback management is shall we say “lacking”. media player isnt in the same league at ipod. playlist, cueing, adjusting the equalizer. its not funny. mobile media player? even less. you got volume control and thats about it. and dont even get me started on track position saving. the most underrated feature of the ipod is the ability for it to remember where it was when it was last in playback – think audio books or PODCASTS. stop, come back and its right where you left it. i mean right at the last single syllable that scoble muttered into the mic. moble media player? nope. and on long tracks the discreet positioning is used. and it only gets you so close to where you where as each pixel on the screen represents so many minutes of playback. i can get close but not exact. do you really want to listen to the same 7-8 minutes of the track again because the overall audio book is 2.5 hours. assuming you can manually get “close”?

    I finally close with this. if creative and iriver cant seem to make a dent in ipod. what makes you think phone companies can? Mp3 isnt even the prime objective of the device – mp3 playback is an afterthought. possibly even just a feature snuck into the firmware or something that came with the DSP chipset.

  • Mike Johnson

    technically cell phones have all the parts – some now have a lot of flash, mp3 playback call capability. whats not to like?

    firstly I have robert’s much beloved audiovox windows smart fone. as a phone? awesome. it has media play – hmm. i could play mp3′s on this. so i upgraded the ram to 512mb mini SD. dumped a bunch of songs on it ranging from 128k to 320k songs. hit play and the speaker from the fone is aweful. I have gotten better sound from real audio or my kid’s speak n spell. so no speaker playback. i can deal with that.

    headphones will be so much better? nope. most cell phones do not standard headphone jacks – meaning I cant use a better class of headphones: no sony, no senheiser, no klipsch headphones – things that make my ipod better. audiovox? better luck next model….

    i have to use that stoopid audiovox “call” headphone that plugs in . if you dont buy the right one, cell headphone is mono – the executive set gives you stereo – no stereo music?!?!? WTF. secondly you cant move the condensor microphone out of the way.its in a “fixed” position so its always blopping against my face. on a redeye flight with the gentle rocking of the plane this transformed a gentle music cruise through the night from LA to toronto into something annoying to be polite.

    secondly the playback management is shall we say “lacking”. media player isnt in the same league at ipod. playlist, cueing, adjusting the equalizer. its not funny. mobile media player? even less. you got volume control and thats about it. and dont even get me started on track position saving. the most underrated feature of the ipod is the ability for it to remember where it was when it was last in playback – think audio books or PODCASTS. stop, come back and its right where you left it. i mean right at the last single syllable that scoble muttered into the mic. moble media player? nope. and on long tracks the discreet positioning is used. and it only gets you so close to where you where as each pixel on the screen represents so many minutes of playback. i can get close but not exact. do you really want to listen to the same 7-8 minutes of the track again because the overall audio book is 2.5 hours. assuming you can manually get “close”?

    I finally close with this. if creative and iriver cant seem to make a dent in ipod. what makes you think phone companies can? Mp3 isnt even the prime objective of the device – mp3 playback is an afterthought. possibly even just a feature snuck into the firmware or something that came with the DSP chipset.

  • sam

    The title of that article is misleading. The iPod’s marketshare isn’t now 14% total, it was 14% THIS QUARTER. And that’s actually not too surprising: the current model has been out for a long time. When Apple introduces its next generation, expect that number to be different.

    And the percentage figure is misleading. Including cellphones in the MP3 player catagory would be like claiming Office’s market share crashed after it was discovered that hundreds of millions of people have Notepad installed on their machines. 48 million MP3 playing musicphones, 8 million iPods, and 2 million non-Apple brand stand-alone MP3 players: Apple is still kicking ass in the standalone catagory.

  • sam

    The title of that article is misleading. The iPod’s marketshare isn’t now 14% total, it was 14% THIS QUARTER. And that’s actually not too surprising: the current model has been out for a long time. When Apple introduces its next generation, expect that number to be different.

    And the percentage figure is misleading. Including cellphones in the MP3 player catagory would be like claiming Office’s market share crashed after it was discovered that hundreds of millions of people have Notepad installed on their machines. 48 million MP3 playing musicphones, 8 million iPods, and 2 million non-Apple brand stand-alone MP3 players: Apple is still kicking ass in the standalone catagory.

  • http://www.cross-spectrum.com/weblog Herb

    Speaking of conference calls:

    From Apple conference call last Wednesday -

    Peter Oppenheimer (Apple CFO): “we don’t think that the phones that are available today make the best music players, we think the iPod is, but over time that is likely to change. We’re not sitting around doing nothing.”

    The biggest mistake Apple’s competitors are making is thinking that Apple will repeat its late 80′s/early 90′s Mac mistakes. Remember that Jobs already predicted that MS would have to come out with their own DAP to compete with the iPod, and from the rumors, it appears that is happening. Also remember that Apple is a company that killed its best-selling iPod mini to make room for the nano – they have no problem in killing a cash cow to make room for a *bigger* cash cow. Does anyone *really* think that Apple is going to get caught flat-footed this time around?

    Now Yahoo’s move yesterday could make things interesting, at least for those who think the iPod’s success is tied to the iTMS.

  • Karim

    http://scobleizer.wordpress.com/2006/06/10/john-dvorak-explains-how-he-tweaks-mac-users-for-traffic/

    The problem is that the author of study includes mobile phones in his definition of “MP3 player.” There are many more mobile phones than iPods. So, according to his logic, iPods only constitute 14% of MP3 players.

    That’s an interesting strategy, to call a mobile phone an “MP3 player” device. Most people would simply call it a “mobile phone” that happens to have as one of its features, the ability to play MP3s. Its primary function is placing telephone calls. Tomi Ahonen, however, has included mobile phones in his definition, not because people purchase phones with the primary intent of playing music, but rather because phones are capable of playing music. Interesting.

    Let’s take a hit off the author’s crack pipe, shall we?

    Hmmm. You know, now that I think of it, there are other devices that play MP3s. Sure, mobile phones play MP3s, but some PDAs do as well. So let us factor in PDA sales.

    [author takes hits off Ahonen's crack pipe, scribbles numbers on paper]

    Interesting. By including PDAs, we can now clearly see that the iPod market share has crashed to 9% of the MP3 player market.

    But why stop there?

    [author takes another hit off Ahonen's crack pipe, scribbles more numbers]

    By including laptop computers, which play MP3s, we can now see that the iPod market share has crashed to 1.7% of the MP3 player market! This is amazing! Why does Apple management continue to deny that there’s a problem? Why doesn’t the mainstream media cover this? Could it be some kind of conspiracy?

    [author takes hit off Ahonen's crack pipe, scribbles figures with Ahonen's crayon]

    Oh my God! I’ve just factored in DESKTOP PCs. They play MP3s too. And iPod market share has now crashed to 0.00002%! What a scandal! At this rate, they’ll be out of business before next Tuesday! Someone should alert the media. Clearly, Apple is doomed. Clearly, Ahonen was right when he predicted that the iPod would die in the year 2006.

    [author takes hit off Ahonen's crack pipe, begins to scribble letters and abstract shapes]

    Wow… hey, did you know that if you rearrange the letters in in “Tomi T. Ahonen,” it spells “John C. Dvorak?” Coooool…

    [author's head slumps onto desk]

  • Karim

    http://scobleizer.wordpress.com/2006/06/10/john-dvorak-explains-how-he-tweaks-mac-users-for-traffic/

    The problem is that the author of study includes mobile phones in his definition of “MP3 player.” There are many more mobile phones than iPods. So, according to his logic, iPods only constitute 14% of MP3 players.

    That’s an interesting strategy, to call a mobile phone an “MP3 player” device. Most people would simply call it a “mobile phone” that happens to have as one of its features, the ability to play MP3s. Its primary function is placing telephone calls. Tomi Ahonen, however, has included mobile phones in his definition, not because people purchase phones with the primary intent of playing music, but rather because phones are capable of playing music. Interesting.

    Let’s take a hit off the author’s crack pipe, shall we?

    Hmmm. You know, now that I think of it, there are other devices that play MP3s. Sure, mobile phones play MP3s, but some PDAs do as well. So let us factor in PDA sales.

    [author takes hits off Ahonen's crack pipe, scribbles numbers on paper]

    Interesting. By including PDAs, we can now clearly see that the iPod market share has crashed to 9% of the MP3 player market.

    But why stop there?

    [author takes another hit off Ahonen's crack pipe, scribbles more numbers]

    By including laptop computers, which play MP3s, we can now see that the iPod market share has crashed to 1.7% of the MP3 player market! This is amazing! Why does Apple management continue to deny that there’s a problem? Why doesn’t the mainstream media cover this? Could it be some kind of conspiracy?

    [author takes hit off Ahonen's crack pipe, scribbles figures with Ahonen's crayon]

    Oh my God! I’ve just factored in DESKTOP PCs. They play MP3s too. And iPod market share has now crashed to 0.00002%! What a scandal! At this rate, they’ll be out of business before next Tuesday! Someone should alert the media. Clearly, Apple is doomed. Clearly, Ahonen was right when he predicted that the iPod would die in the year 2006.

    [author takes hit off Ahonen's crack pipe, begins to scribble letters and abstract shapes]

    Wow… hey, did you know that if you rearrange the letters in in “Tomi T. Ahonen,” it spells “John C. Dvorak?” Coooool…

    [author's head slumps onto desk]

  • http://www.cross-spectrum.com/weblog Herb

    Speaking of conference calls:

    From Apple conference call last Wednesday -

    Peter Oppenheimer (Apple CFO): “we don’t think that the phones that are available today make the best music players, we think the iPod is, but over time that is likely to change. We’re not sitting around doing nothing.”

    The biggest mistake Apple’s competitors are making is thinking that Apple will repeat its late 80′s/early 90′s Mac mistakes. Remember that Jobs already predicted that MS would have to come out with their own DAP to compete with the iPod, and from the rumors, it appears that is happening. Also remember that Apple is a company that killed its best-selling iPod mini to make room for the nano – they have no problem in killing a cash cow to make room for a *bigger* cash cow. Does anyone *really* think that Apple is going to get caught flat-footed this time around?

    Now Yahoo’s move yesterday could make things interesting, at least for those who think the iPod’s success is tied to the iTMS.

  • http://blog.macb.net macbeach

    Maybe just a coincidence but…

    In a tech get-together this weekend with 5 other people someone mentioned that they downloaded audio books from the library for free. (I guess there is a limit to how many you can have out at once or something, so there is some sort of DRM (evil) involved.

    Well I have a Nano that I got at a discount when I bought my Powerbook, so I causally asked: “So, you download them to your iPod?”. I was shocked by the answer: “Oh, no, it doesn’t work with those, I have a Rio.” but I was more shocked when every other member of the dinner party whipped out a Rio as well. For many people, even if they don’t play music on a cell phone, iPods are not even on the radar screen.

    No I’m as much an Apple fan as the next guy, and no big fan of Microsoft, but if Apple has hitched their wagon to iPod and music sales they are in for a bumpy ride. They may do well, and they may lead the pack for a while, but ultimately margins on this equipment will be close to zero. Companies who actually make these things make hundreds of other electronic gadgets and they don’t really care which brand name they sell under, but the companies who’s names appear on the products are all hanging by a thread too. Can Apple make up for that by selling online music? Again, they have a nice lead, but Yahoo, Microsoft, AOL and many others are all chomping at their heels and won’t go away any time soon.

    If Apple tries to replace their computer business with iTunes (and related hardware) they are crazy. How are Apple’s server sales going? And if they are not doing really well, why not? Apple doesn’t have nearly the lock-in that Microsoft has (and I’m against companies that rely on lock-ins anyway) but without them, you have to hit a home run every inning or so or get out of the major leagues. Apple had better have a new money maker in the pipeline because iPod and iTunes will naturally decline as the market commoditizes both related equipment and services.

    With the switch to Intel, Apple has undifferentiated themselves for their old mainstream business. I paid a premium to get a PowerPC based laptop, but my next laptop, if it is a Core Duo, will just as likely be a Compaq or Dell, and now that I know about that library deal, I may replace my Nano with a Rio. For the most part I play my own ripped MP3s, so one device is as good as another for that and I hate all DRM files equally, so if I have to used something that is DRMed it might as well be on a Rio as an iPod.

    Apple has carved a niche for itself (iTself?) by having products that are unique and well ahead of their time. What are they doing like that now? I don’t see it.

  • http://macbeach.blogspot.com Mac Beach

    Maybe just a coincidence but…

    In a tech get-together this weekend with 5 other people someone mentioned that they downloaded audio books from the library for free. (I guess there is a limit to how many you can have out at once or something, so there is some sort of DRM (evil) involved.

    Well I have a Nano that I got at a discount when I bought my Powerbook, so I causally asked: “So, you download them to your iPod?”. I was shocked by the answer: “Oh, no, it doesn’t work with those, I have a Rio.” but I was more shocked when every other member of the dinner party whipped out a Rio as well. For many people, even if they don’t play music on a cell phone, iPods are not even on the radar screen.

    No I’m as much an Apple fan as the next guy, and no big fan of Microsoft, but if Apple has hitched their wagon to iPod and music sales they are in for a bumpy ride. They may do well, and they may lead the pack for a while, but ultimately margins on this equipment will be close to zero. Companies who actually make these things make hundreds of other electronic gadgets and they don’t really care which brand name they sell under, but the companies who’s names appear on the products are all hanging by a thread too. Can Apple make up for that by selling online music? Again, they have a nice lead, but Yahoo, Microsoft, AOL and many others are all chomping at their heels and won’t go away any time soon.

    If Apple tries to replace their computer business with iTunes (and related hardware) they are crazy. How are Apple’s server sales going? And if they are not doing really well, why not? Apple doesn’t have nearly the lock-in that Microsoft has (and I’m against companies that rely on lock-ins anyway) but without them, you have to hit a home run every inning or so or get out of the major leagues. Apple had better have a new money maker in the pipeline because iPod and iTunes will naturally decline as the market commoditizes both related equipment and services.

    With the switch to Intel, Apple has undifferentiated themselves for their old mainstream business. I paid a premium to get a PowerPC based laptop, but my next laptop, if it is a Core Duo, will just as likely be a Compaq or Dell, and now that I know about that library deal, I may replace my Nano with a Rio. For the most part I play my own ripped MP3s, so one device is as good as another for that and I hate all DRM files equally, so if I have to used something that is DRMed it might as well be on a Rio as an iPod.

    Apple has carved a niche for itself (iTself?) by having products that are unique and well ahead of their time. What are they doing like that now? I don’t see it.

  • Cybereer

    Tomi, This is an utter misrepresentation of what Oppenheimer said at the conference call:

    “W. Ian Blanton – I hope you listened to Apple CFO Peter Oppenheimer two days ago, when he clearly stated musicphones are already a threat and that Apple will release its own musicphone. Perhaps you could trust Apple’s own top management on this?”

    As pointed out by Herb above, Oppenheimer (Apple CFO) said: “we don’t think that the phones that are available today make the best music players, we think the iPod is, but over time that is likely to change. We’re not sitting around doing nothing.”

    For someone penning books, do you not see the difference, or are you making up stuff just to support your point of view? People call you a moron for a reason, because you are one and probably an outright liar too.

    I have a Nokia camera phone that can also play some games and music, but the whole damn thing is so clumsy and ugly that it doesn’t even function properly as a phone, let alone as a camera or music player.

    What you don’t appear to understand is that most of the phones are Microsoft-like bloated junks with useless features and but poor usability. They are heavily subsidized by the network, and practically given away to entice new customers and discarded quickly like old socks, while iPods are emotionally attached to users and last much longer. Apple has sold 50+ million iPods so far, and I bet most of them are being actively used. How many billions of cellphones are in the trash?

    You are making a fool of yourself by spreading the silly 14% market share FUD, when everyone except you and a know Microsoft troll like Scoble know that iPod is far from dying.

  • Cybereer

    Tomi, This is an utter misrepresentation of what Oppenheimer said at the conference call:

    “W. Ian Blanton – I hope you listened to Apple CFO Peter Oppenheimer two days ago, when he clearly stated musicphones are already a threat and that Apple will release its own musicphone. Perhaps you could trust Apple’s own top management on this?”

    As pointed out by Herb above, Oppenheimer (Apple CFO) said: “we don’t think that the phones that are available today make the best music players, we think the iPod is, but over time that is likely to change. We’re not sitting around doing nothing.”

    For someone penning books, do you not see the difference, or are you making up stuff just to support your point of view? People call you a moron for a reason, because you are one and probably an outright liar too.

    I have a Nokia camera phone that can also play some games and music, but the whole damn thing is so clumsy and ugly that it doesn’t even function properly as a phone, let alone as a camera or music player.

    What you don’t appear to understand is that most of the phones are Microsoft-like bloated junks with useless features and but poor usability. They are heavily subsidized by the network, and practically given away to entice new customers and discarded quickly like old socks, while iPods are emotionally attached to users and last much longer. Apple has sold 50+ million iPods so far, and I bet most of them are being actively used. How many billions of cellphones are in the trash?

    You are making a fool of yourself by spreading the silly 14% market share FUD, when everyone except you and a know Microsoft troll like Scoble know that iPod is far from dying.

  • Koreen Madden

    Even if the iPod was dying, how does that constitute to Apple dying? Their computer sales have been the best ever in the company history.

  • Koreen Madden

    Even if the iPod was dying, how does that constitute to Apple dying? Their computer sales have been the best ever in the company history.

  • http://scobleizer.wordpress.com/ Robert Scoble

    Koreen: it’s the same thing as saying “Office is dead.”

    Oh, and Goebbels, I have one thing to say: your comments are excellent! :-)

  • http://scobleizer.wordpress.com/ Robert Scoble

    Koreen: it’s the same thing as saying “Office is dead.”

    Oh, and Goebbels, I have one thing to say: your comments are excellent! :-)

  • http://www.merchantsmirror.com Ben Hwang

    I said Office was dead back in 95. Who knew that people would still like this Truetype font mumbo jumbo.

    TEXT FILES. PICO. PINE. Booyah. And to this day, I still use those three.

    Scary. Dvorak just flashed before my eyes. :p

  • http://life.firelace.com darkmoon

    I said Office was dead back in 95. Who knew that people would still like this Truetype font mumbo jumbo.

    TEXT FILES. PICO. PINE. Booyah. And to this day, I still use those three.

    Scary. Dvorak just flashed before my eyes. :p

  • Pingback: The Insider by Sidebar Geek : Microsoft Confirms Zune iPod Rival

  • http://www.netcropolis.org/ W. Ian Blanton

    Wow, looks like everyone did the homework of responding FOR me. Thanks guys!

    Tomi, I’m sure you’re busy getting bashed by over-zealous Mac-Macs, and several people have done me the courtesy of pulling out Mr. Openheimer’s actual quote, so I’ll try and keep this short.

    As an adjunct, I NEVER trust any companies management. This is the same company that said (paraphrased) “Oh yeah, we’ll never do video on the iPod, no one would wanna do..WHOAH! We just released a video ipod and a TV download service!”

    If you’re hitching your wagon wo what any at Apple SAYS instead of what they DO, well, you are in deeeep doo-doo. :)

    Now that we’ve gotten that out of the way, I have a basic problem with some of the talk that Robert mentions;

    I feel that you are manipulating data to fit your theory. I mean, when you asked your question that Robert references, why did you not ask “Who is carrying a cellphone that play’s music?”

    Is it because a LOT fewer hands would have went up?

    I could argue my case for neural implants surpassing cellphones using this kind of query. “Who here has neural tissue?” A-HA! Almost everyone does, so clearly cellphones are on their way down!

    (caveat: readers of the future, I don’t doubt this will happen, but not ca. 2006 :) )

    Again, I do not think that Apple is going to stay “king of the MP3 player” heap forever, but using ludicrous methods like changing the evaluations so as to improve the numbers. The iPod will not be competed against by changing the classification to anything with the characters “M”, “P” and “3″ in it, so as to lower their marketshare.

    The iPod will be beaten by pricing and features. The same way the Sony Walkman went (an analogy I note you did not use in your list). If Apple is smart (and so far, they seem to be), they’re busy preparing for that day.

    And to wrap it up, I just don’t see the phone beating out the dedicated music player until a lot of things happen, which many other people have pointed out: pretty much improvements across the board.

    However, I will note ONE l’il tidbit: If power/recharging is an issue, who seems to be taking the lion’s share of in-car charging stations/audio interfaces? Would it be a fruit related company? Yes, clearly Banana Computers is poised to conquer the phone/music player market. :)

  • http://www.netcropolis.org W. Ian Blanton

    Wow, looks like everyone did the homework of responding FOR me. Thanks guys!

    Tomi, I’m sure you’re busy getting bashed by over-zealous Mac-Macs, and several people have done me the courtesy of pulling out Mr. Openheimer’s actual quote, so I’ll try and keep this short.

    As an adjunct, I NEVER trust any companies management. This is the same company that said (paraphrased) “Oh yeah, we’ll never do video on the iPod, no one would wanna do..WHOAH! We just released a video ipod and a TV download service!”

    If you’re hitching your wagon wo what any at Apple SAYS instead of what they DO, well, you are in deeeep doo-doo. :)

    Now that we’ve gotten that out of the way, I have a basic problem with some of the talk that Robert mentions;

    I feel that you are manipulating data to fit your theory. I mean, when you asked your question that Robert references, why did you not ask “Who is carrying a cellphone that play’s music?”

    Is it because a LOT fewer hands would have went up?

    I could argue my case for neural implants surpassing cellphones using this kind of query. “Who here has neural tissue?” A-HA! Almost everyone does, so clearly cellphones are on their way down!

    (caveat: readers of the future, I don’t doubt this will happen, but not ca. 2006 :) )

    Again, I do not think that Apple is going to stay “king of the MP3 player” heap forever, but using ludicrous methods like changing the evaluations so as to improve the numbers. The iPod will not be competed against by changing the classification to anything with the characters “M”, “P” and “3″ in it, so as to lower their marketshare.

    The iPod will be beaten by pricing and features. The same way the Sony Walkman went (an analogy I note you did not use in your list). If Apple is smart (and so far, they seem to be), they’re busy preparing for that day.

    And to wrap it up, I just don’t see the phone beating out the dedicated music player until a lot of things happen, which many other people have pointed out: pretty much improvements across the board.

    However, I will note ONE l’il tidbit: If power/recharging is an issue, who seems to be taking the lion’s share of in-car charging stations/audio interfaces? Would it be a fruit related company? Yes, clearly Banana Computers is poised to conquer the phone/music player market. :)

  • Cybereer

    >> As an adjunct, I NEVER trust any companies management. This is the same company that said (paraphrased) “Oh yeah, we’ll never do video on the iPod, no one would wanna do..WHOAH! We just released a video ipod and a TV download service!”

    Please backup your claim or stop making up shit like that!

    You should know that Apple doesn’t pre-announce future products, unlike certain other company. Before the video iPod, Steve Jobs did belittle other video players on occasions, but I don’t recall he ever promised that Apple would NEVER do video.

  • Cybereer

    >> As an adjunct, I NEVER trust any companies management. This is the same company that said (paraphrased) “Oh yeah, we’ll never do video on the iPod, no one would wanna do..WHOAH! We just released a video ipod and a TV download service!”

    Please backup your claim or stop making up shit like that!

    You should know that Apple doesn’t pre-announce future products, unlike certain other company. Before the video iPod, Steve Jobs did belittle other video players on occasions, but I don’t recall he ever promised that Apple would NEVER do video.

  • http://www.netcropolis.org/ W. Ian Blanton

    Cybereer; Lemme ‘splain the concept of a “joke” to you. Hell, go look up on Google: http://www.google.com. M’kay?

    I paraphrased Apple as a whole. Do you know how to tell the difference between the word “company” and the words “Steven P. Jobs”? Do you honestly think I was trying attribute a quote to Steve Jobs where he said “Whoah! We just released a video and a TV download service!”? Yeeeesh.

    And finally, in the interests of accuracy; Steve did NOT “belittle other video players”, he belittled the entire _idea_ of video on a handheld device from mid-late 2004 to late 2005, basically until just before Apple announced the iPod with video. And just as a parting gift I’ll leave you a quote:

    “First, he said, on a video player, “there’s just no equivalent of headphones.” That is, when you put on headphones and press Play on a music player, the results are spectacular-you get a very close equivalent to the concert-hall experience. But watching video on a tiny three-inch hand-held screen is almost nothing like the experience of watching a movie in a theater or even on TV. It can’t approach the same realism or emotional impact.” Steve Jobs, January 2004.

    Along with that, you get a case of RICE-A-RONI, the San Francisco treat, thanks for playing, you’ve been a great sport!

  • http://www.netcropolis.org W. Ian Blanton

    Cybereer; Lemme ‘splain the concept of a “joke” to you. Hell, go look up on Google: http://www.google.com. M’kay?

    I paraphrased Apple as a whole. Do you know how to tell the difference between the word “company” and the words “Steven P. Jobs”? Do you honestly think I was trying attribute a quote to Steve Jobs where he said “Whoah! We just released a video and a TV download service!”? Yeeeesh.

    And finally, in the interests of accuracy; Steve did NOT “belittle other video players”, he belittled the entire _idea_ of video on a handheld device from mid-late 2004 to late 2005, basically until just before Apple announced the iPod with video. And just as a parting gift I’ll leave you a quote:

    “First, he said, on a video player, “there’s just no equivalent of headphones.” That is, when you put on headphones and press Play on a music player, the results are spectacular-you get a very close equivalent to the concert-hall experience. But watching video on a tiny three-inch hand-held screen is almost nothing like the experience of watching a movie in a theater or even on TV. It can’t approach the same realism or emotional impact.” Steve Jobs, January 2004.

    Along with that, you get a case of RICE-A-RONI, the San Francisco treat, thanks for playing, you’ve been a great sport!

  • http://www.tomiahonen.com/ Tomi T Ahonen

    Hi all. I’ll come back (tomorrow) with full replies to you all. There are many very valid questions, concerns, doubts here that I really do want to reply to.

    But let me leave you for now with some actual user data. In my blog I reported mostly only global numbers. I think in this discussion here, many are suggesting “it is not practical today” whether because of phones, or carriers, or whatever. That today, in 2006, it is not a valid customer selection choice, to select a musicphone over an iPod.

    So lets examine a few markets individually. Japan. The world’s second largest music market by dollar value behind USA. In Japan last year the mobile music market was worth 211 Million dollars (source IFPI). Those familiar with Apple know iTunes in 2005 sold 400 million dollars worldwide. So in Japan alone music sold directly to mobile phones generated half the revenues of iTunes worldwide. Is it feasible today to have devices, music catalogs, service offerings, carrier marketing, etc to greatly succeed with actual, paid, downloads to mobile phones. Yes.

    UK is the third largest music market. Today 27% of the 3G subscribers in Britain download music to phones (source Telephia). 3G subscribers are only 8% of Britains population (tied for fifth-best in the world) so that works out to only 2% of the total population. (I have only miscellaneous national stats. Of course the current 2G/2.5G phone owners also buy music in Britain, but I don’t have that statistic)

    Once you get a 3G phone, it becomes a very good proposition to consume music. And before you pooh-pooh the 2% number, note these details. 3G was launched in Britain in 2003. So they have had it for 3 years. If we look at iPod penetration in the USA 3 years after the iPod launch (though third quarter 2004) that was – (drumroll) – 2%!

    In other words, in the first 3 years in America, Apple managed with its iPod to find 2% of the population to buy and own an iPod (did all buy iTunes I don’t think so). In the first 3 years of 3G in the UK, the local carriers have convinced 2% of the population TO BUY SONGS as direct downloads to their phones. I’d say in Britain music on a phone is as viable as the iPod is in America?

    Germany is the fourth largest music market. Here I have a hot-off-the-press Chip Xonio consumer survey of 3000 Germans from 20 July 2006. Guess what. 32% of Germans purhase MP3 songs to mobile phones !!! (those are almost all 2G/2.5G as Germany’s 3G penetration is only about 2% and most of those are 3G modems) Is music on cellphones viable? ABSOLUTELY. Please do adjust your mindset. You have seen the lousy archaic American phones, on horrible American carriers and networks, with miserable customer service and no industry support. I don’t mean to dump on America, but all in my industry – telecoms – both inside America and outside it, admit that Americans have the worst of the mobile telecoms. Years behind. But in Germanh today? music sold to phones? Absolutely.

    So then two small markets to show how it REALLY can be done. Sweden (population 8 million, but broadband penetration ahead of USA, Europe’s second highest cellphone penetration at 120%, tied with UK 8% 3G penetration; by my index the world’s third most digital society – Japan is second)

    So Sweden. In Sweden, one 3G carrier, Tre (3/Hutchison) offers Europe’s most advanced music service. Among their offers is an all-you-can-download service costing 99 SEK (18 dollars) per month. Tre’s music downloads generate 35% of all online music sales in Sweden, ahead of iTunes Sweden (source Tre). Is music viable on a phone today in 2006? YES

    And finally South Korea, population 50 million. The world’s most digital country. Highest broadband penetration. Highest 3G phone penetration. First digital TV to mobile broadcast etc. First in my index of digitalization. The country where direct MP3 sales to mobiles was invented in June of 2003. Today (according to Korean telecoms industry English-language press Korea Telecom) a total of 45% of ALL music in Korea is sold directly to mobile phones. NOT 45% of online. 45% of ALL music. Universal music has been showcasing their Korean concepts all around Europe on this is how it needs to be done. Can music on cellphones be viable in 2006, can music to cellphones replace iPods. YES YES YES.

    These statistics are in the numbers I report when I quote the IFPI global numbers in my original blog posting. I hear you guys here doubting that any cellphone you’ve seen could replace the iPod. But please. Don’t substitute your own personal gut feeling against reported facts. Like the economist John Maynard Keynes said, “When my information changes, I change my opinion. What do you do, sir?”

    I’ll return with itemized comments tomorrow.

    Tomi Ahonen :-)

  • http://www.tomiahonen.com Tomi T Ahonen

    Hi all. I’ll come back (tomorrow) with full replies to you all. There are many very valid questions, concerns, doubts here that I really do want to reply to.

    But let me leave you for now with some actual user data. In my blog I reported mostly only global numbers. I think in this discussion here, many are suggesting “it is not practical today” whether because of phones, or carriers, or whatever. That today, in 2006, it is not a valid customer selection choice, to select a musicphone over an iPod.

    So lets examine a few markets individually. Japan. The world’s second largest music market by dollar value behind USA. In Japan last year the mobile music market was worth 211 Million dollars (source IFPI). Those familiar with Apple know iTunes in 2005 sold 400 million dollars worldwide. So in Japan alone music sold directly to mobile phones generated half the revenues of iTunes worldwide. Is it feasible today to have devices, music catalogs, service offerings, carrier marketing, etc to greatly succeed with actual, paid, downloads to mobile phones. Yes.

    UK is the third largest music market. Today 27% of the 3G subscribers in Britain download music to phones (source Telephia). 3G subscribers are only 8% of Britains population (tied for fifth-best in the world) so that works out to only 2% of the total population. (I have only miscellaneous national stats. Of course the current 2G/2.5G phone owners also buy music in Britain, but I don’t have that statistic)

    Once you get a 3G phone, it becomes a very good proposition to consume music. And before you pooh-pooh the 2% number, note these details. 3G was launched in Britain in 2003. So they have had it for 3 years. If we look at iPod penetration in the USA 3 years after the iPod launch (though third quarter 2004) that was – (drumroll) – 2%!

    In other words, in the first 3 years in America, Apple managed with its iPod to find 2% of the population to buy and own an iPod (did all buy iTunes I don’t think so). In the first 3 years of 3G in the UK, the local carriers have convinced 2% of the population TO BUY SONGS as direct downloads to their phones. I’d say in Britain music on a phone is as viable as the iPod is in America?

    Germany is the fourth largest music market. Here I have a hot-off-the-press Chip Xonio consumer survey of 3000 Germans from 20 July 2006. Guess what. 32% of Germans purhase MP3 songs to mobile phones !!! (those are almost all 2G/2.5G as Germany’s 3G penetration is only about 2% and most of those are 3G modems) Is music on cellphones viable? ABSOLUTELY. Please do adjust your mindset. You have seen the lousy archaic American phones, on horrible American carriers and networks, with miserable customer service and no industry support. I don’t mean to dump on America, but all in my industry – telecoms – both inside America and outside it, admit that Americans have the worst of the mobile telecoms. Years behind. But in Germanh today? music sold to phones? Absolutely.

    So then two small markets to show how it REALLY can be done. Sweden (population 8 million, but broadband penetration ahead of USA, Europe’s second highest cellphone penetration at 120%, tied with UK 8% 3G penetration; by my index the world’s third most digital society – Japan is second)

    So Sweden. In Sweden, one 3G carrier, Tre (3/Hutchison) offers Europe’s most advanced music service. Among their offers is an all-you-can-download service costing 99 SEK (18 dollars) per month. Tre’s music downloads generate 35% of all online music sales in Sweden, ahead of iTunes Sweden (source Tre). Is music viable on a phone today in 2006? YES

    And finally South Korea, population 50 million. The world’s most digital country. Highest broadband penetration. Highest 3G phone penetration. First digital TV to mobile broadcast etc. First in my index of digitalization. The country where direct MP3 sales to mobiles was invented in June of 2003. Today (according to Korean telecoms industry English-language press Korea Telecom) a total of 45% of ALL music in Korea is sold directly to mobile phones. NOT 45% of online. 45% of ALL music. Universal music has been showcasing their Korean concepts all around Europe on this is how it needs to be done. Can music on cellphones be viable in 2006, can music to cellphones replace iPods. YES YES YES.

    These statistics are in the numbers I report when I quote the IFPI global numbers in my original blog posting. I hear you guys here doubting that any cellphone you’ve seen could replace the iPod. But please. Don’t substitute your own personal gut feeling against reported facts. Like the economist John Maynard Keynes said, “When my information changes, I change my opinion. What do you do, sir?”

    I’ll return with itemized comments tomorrow.

    Tomi Ahonen :-)

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  • http://www.ohbrian.net/ Brian

    What’s really broken here? Apple and the iPod or the Reboot conference? Is this the first sign that Scoble has gone Silicon Valley (and losing touch with what’s happening more than 15 minutes away from the 101)?

  • http://www.ohbrian.net Brian

    What’s really broken here? Apple and the iPod or the Reboot conference? Is this the first sign that Scoble has gone Silicon Valley (and losing touch with what’s happening more than 15 minutes away from the 101)?

  • http://scobleizer.wordpress.com/ Robert Scoble

    Brian: the Reboot Conference is in Copenhagen, Denmark. About as far from Silicon Valley as you can get. Maybe it’s YOU who has lost touch with what’s happening outside the valley?

  • http://scobleizer.wordpress.com/ Robert Scoble

    Brian: the Reboot Conference is in Copenhagen, Denmark. About as far from Silicon Valley as you can get. Maybe it’s YOU who has lost touch with what’s happening outside the valley?

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