The Apple Company has had great success with the iPod but now needs to figure out a way they can create a sustainable comparative advantage in the Mp3 player market or they will lose demand and market share, and decrease profits and revenue . Analysis
I am now going to analyze the PC and Music Player industry using Porter's five forces. ~Competitors
The competitors in the PC industry are fierce and intense. There is a very high rivalry in the industry causing the price to decline. For Apple there are two types of competitors, Hardware, for example Dell, and Software like IBM and Microsoft. In either case, the competition is still high. Also now Apple has to compete in the Music Player industry with the invention of the iPod. They control 70 percent of the market in music players just themselves. The competition is increases as Microsoft and Creative get into the market but iPod has still been able to control most of the market. ~Buyers
The cost of switching from one brand to another brand is very low. Companies with more product differentiation. It is hard to get buyers at first in the market. When computers first came out buyers were easy to please. Now they are a lot harder to please since they know what to expect and they only want the best. The industry has matured over the time and buyers have become a lot more powerful. Also in the music player industry, since iPod is very compatible to Apple computer's they are starting to have a lot more brand loyalty. ~Suppliers
There are very few suppliers in processors and With Apple's operating systems OS. On the other hand with the plastic, keyboards, memory drives and chips, and disk drives, rewritable CD's, there are many suppliers. Suppliers are going to want to make there parts cheaper and better so there is a lot of competition with suppliers causing them to have a lower power position. ~New Entrants
Since the market is mature now and there are already big power house names...