Apple Gap Analysis

In 2000 the digital music was the next big thing in how consumers listen to music. The technological shift in music changed how the relationship is between the artists, recording companies, promoters and music stores on how they operate today. In the late 90’s and early 2000’s Peer-to-peer (P2P) networks allowed free exchange of music files with companies like Napster and Kazaa was a big step that allowed consumers to store large libraries of music. With the cost of hard drive space going down; it allowed for pocket-sized computers to store more information in a smaller space that open the door for apple to step in with the unveiling of the iPod and iTunes. These systems made it possible for storage and playback that gave consumers the option of downloading physical recordings such as CD’s to their computers hard drive and then to their iPod’s and could take their music anywhere. Makers of other MPG players were having a hard time keeping up with the iPod. In 2003 iTunes offered legal downloads that competitors started to follow even.

In the first decade of the 21st century consumers began to use computers and computer networks as the primary means to record, distribute, store and play music. This technological shift caused widespread economic changes and fundamentally changed the relationships between artists, record companies, promoters, retail music stores, the technology industry and the consumer. The rise of digital music consumption options contributed to a few fundamental changes in consumption. First the decline of album sales. With the A la carte sales models increasing in popularity, consumers no longer download entire albums but rather choose single songs.
The initial stage (from approximately 1998 to 2001) of the digital music revolution was the emergence of peer-to-peer (P2P) networks that allowed the free exchange of music files (such as Kazaa and Napster). By 2001, the cost of hard drive space had dropped to a level that allowed pocket-sized