...entertainment industry. It owes this success to constant, incremental changes made to its products over the course of many years – closed innovation allowing them to fend off all comers while delivering something unique to the market. It started in 2001, when the first iPod music player – Mac compatible only – was released. Sales were slow, through analysis of the sales, market transition and the wants and needs of the consumer Apple determined that through development of Windows-compatible iTunes software they could increase their market share. This product (service) development enabled Apple to establish a presence within the market dominated by Microsoft at the time, while not directly threatening their market share. Apple exclusive formats were offered through iTunes, which was at the front of the commercial market in licensed online music distribution, such as .AAC, Quicktime Movie (.mov) and Apple Lossless (an FLAC clone) enticed users to make the switch from their MP3 players to the iPod. This was followed up by multiple hardware innovations, incremental changes in design and product functionality, from the iPod to the Mini to the Nano, iPod Shuffle and eventually the precursor to the iPhone – the iPod Touch. The combined technological R&D, market analysis and continuous product development were cemented firmly in the Cyclic innovation model (Fig 1.1), showing each area clearly linked and building upon advances in the other; when the market called for a more portable...
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...than faddish distractions useful only to exchange trivial information, these critics are being proven wrong time and again. Simon Mainwaring (2011). For several decades music could only be heard by either buying a single or an album from the local record shop, listening to the radio or going to watch a live gig. There was a time that it would be a special occasion to take your Vinyl or CD home and play it through a sound system. Those days seem so very long ago now. In more recent years, through the evolution and growth of iTunes, YouTube and technology in general, there are many new ways of listening to music. Thanks to modern technology, we now listen to music on a verity of different platforms such as our computers/laptops, phones, iPods and even home gaming devices. We can now listen to music 'on-the-go' and that means we aren't confined into listening to music in certain circumstances - i.e., sitting in front of a CD player. We listen to music how, where and whenever we want to. Over the past decade, this has become normality and is how the majority of the world listens to music, proving extremely popular to millions of people. In 1999, ‘ Sean Parker’ and ‘Shawn Fanning’, two 18-year-old college students, changed the music industry forever with their file-sharing program called Napster, which enabled users to swap and share music files on their computer. The introduction of the program meant people could go online and download any song on the program for absolutely nothing...
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...SPOTIFY An Analysis of Spotify’s Market Strategies Spotify Spotify AN ANALYSIS OF SPOTIFY’S STRATEGY Spotify is a Swedish online music streaming service that was launched in 2008. Since, its launch Spotify has had a meteoric rise and currently boasts a library of around 15 million music tracks and about 20 million users. Though Spotify still lags behind Pandora, the market leader, it is interesting to understand how Spotify managed to succeed in the competitive music streaming industry. The following report will start off by giving a brief overview of the music industry, Spotify’s features and the competition Spotify faces. We will then analyze how Spotify managed to succeed in the competitive music streaming industry. Finally, we will discuss the risks Spotify faces and future strategies it could undertake in continuing its success in the online music streaming industry. DIGITAL MUSIC INDUSTRY The digital music industry can be divided into two submarkets: the streaming market with numerous competitors and the digital download market dominated by iTunes and Amazon. Digital music industry revenues have grown by 8% in 2011 reaching a valuation of $5.2 billion. Currently the streaming market only generates 10% of digital music industry revenue but the growth rate of this market is greater than the growth rate of the download market. Competition within the streaming industry is very strong as many companies operate in this market with similar business models. Companies...
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...of the iPod on music industry Table of Contents Section 1: Introduction Page 4 Section 2: Technology Adoption Page 4 Section 3: Value Chain Page 5 Section 4: Relationships Page 6 Section 5: Conclusion Page 7 Section 6: References Page 7 Introduction The purpose of this report is to discuss the functions and features of Apple’s innovative MP3 player. I will be relating to the Schumpeterian model, as to how the iPod led to rapid mainstream adoption, whilst similar products failed. I will also consider the opportunities which promoted this device and the challenges that the Apple iPod currently face, highlighting the effects on the traditional music industry value chain, compared to the current value chain. In addition, I will discuss how the iPod developed working relationships which has assisted in Apple’s e-business success. I will then finish by concluding my findings. Technology Adoption The Schumpeterian model looks at the relationship between technological innovation and business activity. According to Perez (2002) there are five typical stages of each wave, which I will briefly describe. Irruption The Apple iPod was launched in 2001, a sleek and stylish MP3 player with an easy user interface, compressing digital audio files the iPod holds up to 1,000 songs and fits neatly in your pocket. The iPod also came...
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...product being introduced to the market have no direct competition; which, is a much easier way for a new company to enter the market. When entering a red ocean strategy, a new company will have a good amount of trouble competing with already established companies and products. It is very easy for blue oceans to turn red once other companies see the profitability of a certain product and try and join that particular market. The goal in a blue market is for a company to create a product and customer following that will make any competition trying to join the market irrelevant. It is also important for the company in the blue market to begin figuring out different ways to reduce costs while offering the same product or service. The Apple iPod was one of the most innovative and market changing products to enter the market to date. While not being the first MP3 player in the market, it was the first to be marketed...
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...Recent IT developmentsHardware | | Type | Summary-Description (what is it) | Examples of Recent Developments (eg new models, recent changes or new versions) | Images | Computer Platforms | PC | A PC, also known as personal computer, a typical PC includes a system unit, monitor, keyboard and mouse. PC's allow us to write papers, create spreadsheets and play games, all with the help of software as well as the hardware. | HPENVY 23-d180ea Touch Smart 23" Touchscreen All-in-One PC | | | Apple MAC | The Macintosh or Mac, are a series of personal computers designed by Apple inc. It is targeted at the home, education and creative professionals market. | iMac | | | Tablet PC (eg iPad, Galaxy) | A tablet is a mobile computer with display, circuitry and battery all in one place. Tablets are normally touch screen, meaning we can interact with the screen with our fingers, or some can be used with a stylus (pen) | IPad Mini | | Communication Technologies | smart phones | A smart phone is a type of phone that basically exceeds the limit of a regular cellular phone. Some of the components of a smart phone include, the ability to send and receive emails, the ability download applications such as personal and business finance managers, or just games. Another important factor is that basically all smartphones have the capability to connect to the internet. | iPhone 5c | | | Bluetooth | Bluetooth is a wireless technology for passing data over short distances. Bluetooth...
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...Marketing Jennifer Willoughby, Co-VP of Service Marketing Date: December 5, 2014 Subject: Spotify Services Report 2014 Mr. Daniel Ek, The music streaming industry is extremely competitive; however, Spotify has managed to carry on as one of the top providers for music streaming, as well as increase their number of users exponentially over the past few years. Spotify stands out against their competition based on: * Well-known brand * Size of music library available * All of the music is stored in the cloud, allowing instant access * Website is easily navigated when searching for artists, albums, and tracks * Ability to customize and share playlists * Spotify’s high ethical standards and everything we do is legal * Free option with advertisements or pay $9.99 per month to avoid the interruptions. * Premium subscription allows users to use Spotify offline * Variety of applications that users can download to their home page leading to more possibilities and uses. * Can be used on a variety of different devices * User traffic has increased by 118% over the past 12 months (Sasson) Spotify is in a great position in the music streaming industry; however, there is always room for improvement. At Spotify, we want to be the best in the industry, while staying legal and ethical. After doing extensive research and evaluating Spotify, we have found the following weaknesses: * Limited offline use when using the free subscription...
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...SPOTIFY An Analysis of Spotify’s Market Strategies Spotify Spotify AN ANALYSIS OF SPOTIFY’S STRATEGY Spotify is a Swedish online music streaming service that was launched in 2008. Since, its launch Spotify has had a meteoric rise and currently boasts a library of around 15 million music tracks and about 20 million users. Though Spotify still lags behind Pandora, the market leader, it is interesting to understand how Spotify managed to succeed in the competitive music streaming industry. The following report will start off by giving a brief overview of the music industry, Spotify’s features and the competition Spotify faces. We will then analyze how Spotify managed to succeed in the competitive music streaming industry. Finally, we will discuss the risks Spotify faces and future strategies it could undertake in continuing its success in the online music streaming industry. DIGITAL MUSIC INDUSTRY The digital music industry can be divided into two submarkets: the streaming market with numerous competitors and the digital download market dominated by iTunes and Amazon. Digital music industry revenues have grown by 8% in 2011 reaching a valuation of $5.2 billion. Currently the streaming market only generates 10% of digital music industry revenue but the growth rate of this market is greater than the growth rate of the download market. Competition within the streaming industry is very strong as many companies operate in this market with similar business models. Companies...
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...world, including those from here in Los Angeles, took their music to the superior sound quality of the CD format. Dire Straits, a British rock band whose career spanned the late 20th century, released their album, Brothers in Arms, on the CD format. The release becoming the most successful album release for the next 200 years. Music labels were quick to take advantage of the format’s rising demand. Labels would cut backroom deals with retailers to set inflated prices; it was pure profit for the supplier. Clearly the consumer did not mind, as CD sales rose to the billions, flooding cash into the music industry. But the success of the CD did not last forever. The introduction of the MP3, digital music services such as iTunes and Spotify, and the iPod were the underlying factors...
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...Micro-environment: • Customer demand and behaviour According to surveys done both online and offline, the demand of Apple products has increased especially for the iPad 2, the iPhone 5 and the Apple Nano. The research showed that there is a 50:50 ratio split of males and females who are Apple buyers. It also showed that amongst potential buyers, only about half don’t own an iPod. Research has also shown that the increasing demand for Apple products has allowed Apple to sell close to 1 million iPad 2. They have recorded to have sold 47.8 million iPhones and 22 million iPads, compared to the previous year where only 37 million and 15.4 million were sold. • Competitor activity Apple faces competition from both the mobile as well as PC industries due to its diverse product line. It therefore has different competitors for different products. Products like Macintosh and iMac has competitors like IBM, Dell, Lenovo, Acer and HP. The iPhone series has competitors like RIM’s Blackberry, Nokia, Google and Motorola. iPod series has competitors like Samsung, SanDisk, Napster Amazon.com, Microsoft’s Zune, Napster, internet radio and Spotify. The iPad has competitors like Amazon’s kindle, Dell, HP and Samsung. Operating systems has competitors like Google’s Android OS. • Marketplace structure The marketplace structure for Apple is Oligopoly. An Oligopoly is a market structure in which only a few sellers offer similar or identical products and dominate the market. They have strong control over prices...
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...maintained its status as a multibillion dollar company. Apple’s Mission and Vision include: Apple's Mission Statement “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced iPad 2 which is defining the future of mobile media and computing devices. (Farfan, 2015)”. Apple's Vision Statement “Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings (Farfan, 2015)”. Apple’s current strategy and objectives were created by CEO Steve Jobs and have been reverberated by his successor CEO Tim Cook: 1. Offer a small number of products 2. Focus on the high end. 3. Give priority to profits over market share. 4. Create a halo effect that makes people starve for new Apple products. Apple has been at the forefront in technology innovation with the production of the MacBook, iTunes, iPod, iPhone, iCloud, App Stores, and future release of Apple Watch. The MacBook was the start of the newest advancement by Steve Jobs, who boasted its OS X does not get...
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...which has completely evolved today’s society into a cyber-society. People live through phones, but it is not the most important technological creation. In the last couple of years, technology has done things that people could have never imagined in the 1990’s, even at the turn of the century, more people used to do things by hand and face to face. Now, computers are everywhere, even in your local McDonald’s, with internet that works at incredible speeds. Phones answer questions, and also do many other tasks that people never thought possible. Now there is access to online banking, email and social networking sites right from a phones. Another really huge advance that has been made technologically is the sharing and listening of music. Spotify is a huge advancement in the music world; music is very important to a lot of people and having a portable way to listen to any song anywhere in the power of your hand is an incredible feat. Having gone from...
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... 13 Appendix 4………………………………………………………………………………………….…………………………. 15 Appendix 5………………………………………………………………………………………….…………………………. 16 Appendix 6………………………………………………………………………………………….…………………………. 17 Appendix 7………………………………………………………………………………………….…………………………. 17 Appendix 8………………………………………………………………………………………….…………………………. 18 Appendix 9………………………………………………………………………………………….…………………………. 20 Appendix 10……………………………………………………………………………………….…………………………..21 Appendix 11……………………………………………………………………………………….…………………………..21 2 Recommendations 1. I recommend Sony continues to fight for market share in the digital media segment by investing in improvements to address the low, 3 star rating of its streaming service to allow it to compete with the large competitors, Spotify and Pandora. In 2014, The three main methods of digital music distribution included digital download, Internet radio, and interactive streaming. (Appendix 1) Sony’s operating income increased for the first time in 4 years due mainly to lowering costs and growth in digital revenue. As revenue from digital increases, Sony should invest in improvements of its streaming service to allow it to compete with the industry segment leaders. (Appendix 10) Internet and radio streaming are predicted to continue to grow. With many new cell phone users, Sony has the ability to capture new users for “Music Unlimited.” (Appendix 7) Subscription services represent an opportunity for Sony because they are much...
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...Apple Inc. Management project Apple Inc. has stakes in several areas of technology including PCs, tablets, cell phones, portable media devices, and digital music distribution. There are threats from each area that Apple has to constantly monitor and overcome. Apple uses its own OS and on its own hardware which has both advantages and disadvantages. Since Apple has more control using this method their products are high-quality or sometimes referred to as premium. However there is less room for customization and the consequences can be seen on several of their product lines. One example is in the wireless market, where new cell phones are being released frequently. Apple has the iPhone and the iOS which are only updated once a year. Meanwhile there is another highly popular OS called Android and is developed by Google and given away for free. Several cell phone manufactures then create phones and use the Android OS which can be customized by the manufacture or simply left the way it is. With different manufactures, Android based phones are released more frequently and have different features which give consumers a variety of options. Features that are a direct threat to the iPhone include increased screen size, removable storage, and more options for customization. The latest iPhones always start at $199 USD with a 2-year contract and a similar Android phone is about the same. One major issue is the fact that the $199 version has 16GB of storage and for more storage (32GB)...
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...Over the past decade, advancements in technology have no doubt changed the way companies do business and consumers have purchased products. Companies used to introduce a product, get feedback from customers and then work on new technology. Today, that new product being released right now will be obsolete within the year. “The cycle time of technology innovations and the rapidity with which they ripple through society have become far faster than the institutions and mechanisms that we’ve traditionally relied on to inform and enforce our choices and values” (Allenby, 2015). Apple’s Use of Technology Apple is one of only a handful of companies that has been able to keep up with those technology changes. From a business on the verge of bankruptcy, Apple’s leadership set in motion a culture change at the 1997 Worldwide Developers Conference. In response to a question from the audience, Steve Jobs said, “you gotta start with the customer experience and work backwards to the technology. You can’t start with the technology and try to figure out where you’re gonna try to sell it” (Cane, 2011). Instead of keeping pace with technology, Apple began to cater to the customer. This is something Apple has done well through marketing, advertising and even with the products. The rise in popularity though made them a target along the way with legal issues and challenges from competitors. To continue with their domination and improve on their market share, Apple must continue to take...
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