An MP3 player is a piece of portable hardware which can store and play MP3 files and other audio file formats. MP3 players are rapidly replacing portable CD players as the choice of consumers, as they are very compact in size, and have large capacities which enable people to store a large quantity of music files to use whenever they wish. There are two main types of MP3 player; those that use flash memory technology, and those which use hard disk drives (also known as ‘Digital Jukeboxes’). The flash memory MP3 players currently hold far less data than most hard-drive players.
iPod is a brand of portable media players designed and marketed by Apple and launched in October 2001. Devices in the iPod range are primarily digital audio players, designed around a central click wheel — with the exception of the iPod shuffle, which uses buttons because of its size. As of October 2005, the line-up consists of the video-capable fifth generation iPod, the smaller iPod nano, and the display-less iPod shuffle. The iPod line used to contain the iPod mini, until being discontinued for the introduction of the iPod nano. The full-sized model stores media on an internal hard drive, while the iPod nano and iPod shuffle use flash memory due to their smaller size. Like many digital music players, iPods can also serve as external data storage devices. Apple's iTunes software is used to transfer music to the devices. As a free jukebox application, iTunes stores an entire music library on the user's computer and can play, burn, and rip music from a CD. It can also transfer photos, videos, games, and calendars to the models that support them. Apple focused its development on the iPod's unique user interface and its ease of use, rather than on technical capability. As of April 2007, the iPod had sold over 100 million units worldwide, making it the best-selling digital audio player series in history.
MACRO - ENVIRONMENTAL FORCES AFFECTING MP3 PLAYERS’ MARKET AND iPODs IN PARTICULAR:
Males ages 15-34 are the most likely purchasers of new MP3 players with 40% of the 15-34 year olds planning to purchase an mp3 player in the next six months. Consumers wish to have an mp3 player which is a ‘jack of all trades’. No longer can one feature set apart an mp3 player from the rest. There needs to be an overall feel of quality and durability added to attractive aesthetics and full functionality. Apple has moved in this direction with the recent release of iPhone.
Two – thirds of all American HH’s earn a “middle class” income: $18,000 - $75,000. Over 8% of HH’s earn over $75,000, up from 2.6% in 1980. A trend towards dual-income families is the leading contributor. The rise in incomes is resulting in higher demand for products offering more convenience and style, even if they command a higher price.
Government Policies and Legal Environment:
Legal Environment: It comprises of laws and certain government and non government organizations. Laws include child labour laws, Minimum wages law, restriction on hazardous substances etc. In 2006, there were disturbing reports in the media claiming that Apple’s iPod factory in China made workers work more than the contractual 60 hours a week. Apple had to consequently conduct an audit and correct any inconformity.
Every new technology is a force for creative destruction. Tape recorders destroyed radios, radios were destroyed by MP 3 players. But in this competitive world, there is unlimited opportunity for innovation. Apple capitalized on this opportunity with the iPod; but will need to sustain it to retain market share.
Apple Ipod is aimed at young adults particularly those between the age of 12-25 • It will appeal to both males and females
• Targeted at the niche market creating product desirability • Middle/high class
• People who have a passion or interest in music and/or...
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