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ARTICLE
By Jeff Orr, Senior Analyst - Consumer Electronics
It’s easy to debate Apple’s decision to have their iPhone Internet services run over AT&T’s older, slower EDGE data network. In contrast, this week’s announcement of the iPod touch is directly from the playbook of good strategy as Apple opens up the portable media player (PMP) market to non-PC users. The iPod touch – essentially a thinner iPhone sans phone – along with a new release of iTunes makes content downloads feasible using Wi-Fi wireless networking. This is unique as MP3 players and Apple’s iPod portfolio have been hindered from reaching a significant consumer segment that doesn’t have access to a broadband-enabled personal computer. Adding and changing content on portable media players is currently tied to PC ownership. Downloaded content and personal CD collections are typically moved via a cable (a process called ‘side-loading’) from the PC to the audio player. Consumers have modified their behaviors to accept this procedure as default for portable media players as well as digital cameras. Side-loading is not an option for those without PCs. The iPod touch is the first PMP device to overcome the PC requirement. Content purchase and direct download to the device is enabled using the latest iTunes application. The Wi-Fi connection built into the iPod touch obsoletes the PC cabling and connects the user via thousands of wireless hot spots and city-wide wireless networks. Portable media players including MP3 audio players are expected to surpass 200 million global units shipped this year. In February 2007, Bloomberg reported that Apple iPods accounted for more than 72% of U.S. retail sales for MP3 players. Maravedis predicts that the introduction of Internet-enabled MP3 players along with reduced memory component prices and the introduction of more cost-effective portable media players will propel significant growth for the consumer electronics category over the next three years. Part of the Apple announcement included a “hear it, buy it” relationship with Starbucks. Consumers will be able to access details about music that is currently playing while visiting the pervasive coffee chain. If the music is of interest, the user can download the song from iTunes to the iPod touch. Performance for this activity should be quite respectable. Time to download a 4MB file from iTunes using the EDGE protocol found in Apple’s iPhone could take around 4 minutes to reach the device. The same download using the T-Mobile HotSpot network powered by Wi-Fi could be achieved in less than 10 seconds; much faster than Starbucks can make your Venti-half caff-nonfat-sugar free-vanilla latte-with whipped cream.
* Estimated time to download a 4MB file at highest Downlink Speed This advancement in content access with the iPod touch demonstrates what consumers can expect as mobile broadband services, such as WiMAX and 4G, start rolling out in the next few years. Instead of chaining devices to a PC for side-loading or stopping at the nearest Wi-Fi hotspot, consumers will be able to access and interact with content – anytime, anywhere. For more information you can contact the author: jeff@maravedis-bwa.com
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