Nontrivial Exercises

The Game that Apple Didn’t Change … Yet

I’ve had time to think a bit more about the Apple Media Event from Tuesday and now have some analysis. I’ve upgraded to iTunes 7 and really like it. I don’t own an iPod, so I can’t speak from personal experience but the updates to the 5G iPod seem decent. The Nano looks very cool, reminiscent as it may be of the iPod Mini. The Shuffle is small enough to get lost between walking out the door and putting on your shoes … but it’s also very cool and possibly the most unique iPod product announced.

Movie downloads are nice. The new Front Row is also nice. iPod games - some people will think those are nice. And iTV - it looks interesting.

And that’s really the concerning part to me about what Apple announced Tuesday. Everything is nice, neat, interesting and an upgrade. But they didn’t change the digital media game.

The Intel Macs changed the game in January of this year. Not only because of the significant performance boost vs. the PowerPC chips, but mostly because now Mac users had easy - dare I even say efficient - access to Windows from within their Mac, without giving up anything on the Mac (see Parallels and BootCamp). It removed obstacles from Windows users to buy a Mac, it gave people the best of both worlds, but with Apple getting the check (for the platform). No, there hasn’t been a dramatic market-share shift to Macs, but 50% of all new Macs sold in the first half of 2006 have been to first-time Mac buyers? That’s a game-change.

iTunes and the iPod changed the game in January and October of 2001, respectively. The technology itself wasn’t as much of a breakthrough as much as putting it all together and making it easy, cool and useful all at the same time. 45-plus million iPods, 1+ billion Legal song downloads and 80% market share later, Apple as redefined and now owns the portable music player game. Creative who? iRiver what?

Being in the lead only invites stalkers, however, so naturally other ‘players’ are trying to make an advance on the iPod. No one really has even a chance, but now someone has a weapon.

Enter Zune. Microsoft knows what it’s up against, and they want a big piece of the action. They have a big marketing budget and are willing to invest (i.e. lose) a lot of money to fight a turf war for this piece of the digital media market.

Zune is interesting, like other MP3 players, but with the Gloiath of Microsoft behind it, there’s a lot of money and web development potential (i.e. market-share eating) that comes with it (see XBox). The 2 things that allow Zune to even play the game with the iPod are music sharing via WiFi and the Zune Marketplace.

Limited as it may be, the Zune’s WiFi will enable you to send any of your music to someone else for them to play for 3 days or 3 times, whichever comes first. Not all that useful if you ask me, but the idea of course is to sell more music. Your friend listens to your song, likes it, wants it, buys it. This is new, and the first true innovation in user experience that any MP3 player has had in my opinion since the iPod.

And the Zune Marketplace is apparently the iTunes Music Store, WindowsMedia-DRM and all. With the clout (i.e. money) of Microsoft, the Zune Marketplace can conceivably scale and compete with the iTunes Music Store to offer an extensive collection of music - and probably tv and video and maybe movies.

So Zune offers a true end-to-end digital media experience, with a download service and a newish feature of sharing music directly with other Zuners. This doesn’t change the game, but it does allow Microsoft to play.

Which is why Apple needs to change the game again. In my opinion, the key to changing the digital media game next is High Definition. Thomas Hawk summarizes why it doesn’t really make any sense to purchase and download 640×480 (H.264 as they may be) movies for $12.99. It all comes down to 2 letters - HD.

Everyone who has an HD tv loves HD. Those who don’t have an HD tv either haven’t seen one yet or can’t afford one. And that’s just 1080i or even 720p for DVD’s. 1080p is coming, not to mention the successors to BlueRay and HD-DVD. So 640×480 is like watching a movie, well, on an 5G iPod. It’s nice, convenient, kind of cool. But certainly not something that will form the future of personal digital media.

Apple needs a way to get a reasonable sized HD portable player, and a way to offer HD - that’s 720p for movies and 1080i for tv shows - along with Dolby 5.1 surround sound audio content for sale on iTunes. That will change the game and solidify Apple as the leader of the next wave of digital media.

I was certainly hoping for and anticipating a game-change from Apple Tuesday. Perhaps their limitations are more technical than strategic - perhaps this is their plan but they’re still working through battery life, file size and licensing issues before they can offer true HD. But if they don’t, someone else will zune…