The Golden Apple

Apple’s sales were up for the second quarter in a row. They attribute this rise in both profits and revenues to increased sales of Macintosh computers, up 43 percent, and the Apple iPod, up almost seven times.

With the boom in personal entertainment, Apple has a firm grasp on market share with the iPod. This is not the only portable digital audio player on the market but it has turned out to be one of the largest selling models. With the increased memory capacity and the ever reducing cost of this technology, Apple’s grip on the market is continually getting stronger.

Could another competitor to gain control over this market? It’s relatively large with a number of competitors in it. Is there anyway for another producer to knock Apple from the top of the pile?


sam said...

It is always possible to gain more market share than another company. The real question is can they do it profitably. I don't think that it will happen with the iPod. For another company to compete, they will have to differentiate their product considerably to compete with Apple. The problem with technology is it moves so fast it becomes difficult to recover the cost of R&D.

Dr. Tufte said...

I think Apple during each of Steve Jobs' tenures may be the premier example of perpetuating monopolistic competition through differentiation.

They've got everybody convinced that there products are better (the iMac was well-known to be on the weak side), the Mac OS (which they've convinced people is virus-proof), and the popularity of the iPod line (although there are now many cheaper competitors).

Now they are doing this with iTunes.

Don't get me wrong - a lot of this has to do with being first, being innovative, and having a lot of style and flair. What is different about Apple is that they have recognized that producing consumer electronics is not their core business; it is being first, being innovative, and having a lot of style and flair.