How did it come to this? Microsoft's Windows Media technology is technically excellent, free to end users, cheaply licensed, and broadly available through a variety of products and services from a huge number of partners. This strategy, which Microsoft thinks of as ecosystem creation, has served the company well in the past. But Apple, with its monoculture digital media strategy—in which all products and services come directly from Apple itself or, in some rare exceptions, from a small number of heavily restricted partners—has proven to be more effective. Today, Apple's iPods dominate the MP3 player market. And the company's iTunes Music Store so thoroughly dominates the online music market that it might as well be the only player.

Part of the appeal is style and design. Apple's products are elegant, beautiful, and worthy of lust, whereas Microsoft is known for its more pedestrian and less passionate products. Apple's approach to product development might be holding it back in the PC industry, where its Macs often cost in excess of $2000 or $3000. But consumer electronics is a completely different ball game. In that space, consumers are comfortable paying a bit more for style, because the devices typically cost much less than $1000. A $500 portable device with cachet is worth more to people than a comparably equipped but pedestrian $300 device.

By the Numbers
Don't believe me? Let's look at the stats. Apple has sold more than 500 million songs—that's half a billion songs, folks—in the two and a half years since it opened the iTunes Music Store. And it's now selling songs at a rate of 1.8 million per day. The service commands 82 percent market share in the United States and is doing just fine elsewhere, as well. (For example, iTunes already owns 80 percent of the UK market despite its fairly recent availability.) And iTunes is available in the 20 countries that represent 85 percent of the global market for music. Services based on Microsoft's technology make up most of the rest, presumably, but the company isn't releasing figures. No surprise there.

In the portable digital audio player market, Apple posts similar stats. The iPod controls over 74 percent of the market for MP3 players of any kind in the United States, and Apple has sold more than 22 million iPods to date, and more than 6.2 million in the most recent quarter alone. More than 1000 accessories are available for the iPod, and in 2006, over 30 percent of all automobiles sold in the United States will offer some form of iPod connectivity as a factory option. Car brands such as Acura, Audi, BMW, Honda, Mercedes, Mini, Nissan Scion, and Volkswagen are all on board.

Keeping Up the Momentum
So, what do you do to further this success? If you're Apple, you keep pumping out products, some of them risky and innovative, some of them simply evolutions of previous designs. And sure enough, last week, Apple revealed how it would bolster iPod and iTunes sales through the holiday 2005 season.

To truly understand what I call the iPod culture, you have to first wade through hip-deep superlatives. Apple CEO Steve Jobs treats each product launch as if it were a traveling religious revival, and it's so easy to get caught up in the hype that you sometimes forget that he's talking about products and not life-changing events. Such is the aura that Jobs projects, I guess. But let's look at this sensibly.

I Browse, I Buy, iTunes
First, Apple continues to extend the worth of its iTunes brand. The iTunes Music Store is the largest online music store in the world, now offering more than 2 million songs for sale. But the biggest reason to keep coming back to iTunes is the exclusive content (and, ahem, its exclusive connectivity with the iPod). To date, many artists have made individual songs available for sale only on iTunes. Last week, Jobs announced two such exclusive blockbusters. The company has signed up best-selling author J. K. Rowling, who is making all six of her Harry Potter books available on iTunes in audio-book form. And Apple finally managed to corral pop siren Madonna—who had previously resisted individual-song sales online—into providing her entire catalog for sale for the first time, including per-song purchases.

Additionally, the company released a new version of its desktop software, iTunes 5.0, for Windows and the Mac. Apple iTunes was already my favorite media player, and iTunes 5.0 adds a number of great new features, including a refined new look, the ability to place playlists into folders, a new search bar that provides simple filtering capabilities, Microsoft Outlook contacts and calendar synchronization with iPods, Smart Shuffle (to fix the broken shuffle feature that dogs all MP3 players), and parental controls. It's a winner, and iTunes has never been in better shape.

More Mellow than ROKR
Jobs' second big announcement concerned the Motorola ROKR cell phone, or the so-called "iTunes phone." Note that it's not called the iPod phone (or iPhone). In development since last year, and one of the worst kept secrets in consumer electronics history, the ROKR is a quad-band GSM cell phone with a built-in camera, built-in stereo speakers, a stereo headphones/headset, and an iTunes client built-in, with a dedicated iTunes button on the handset. However, the ROKR isn't the gigantic success story it could have been, thanks to a conscious decision by Apple to hobble the device. My guess is that the company made this move to protect its iPod market, which now generates one-third of the company's revenues.

How has Apple hobbled the ROKR? First, you can store only 100 songs (and audio books and podcasts) on the device, regardless of the capacity of the memory card you use. That's right, it's artificially limited. And you can acquire music only by plugging the phone into an iTunes-equipped Mac or PC using a lowly, 1998-era USB 1.1 cable, with pathetically slow transfer speeds. That's right, there's no USB 2.0 or over-the-air synching, as you might expect from a 2005 wireless product. As a music player, the ROKR works just like the iPod shuffle: You can use the Auto Fill function in iTunes to fill the phone with content, and shuffle the songs on the device. On the other hand, the ROKR does feature a nice color screen, so you can select artists, albums, songs, and playlists, unlike an iPod shuffle.

It's ... Beautiful
Apple's final announcement is the most exciting, although it's also the one most drenched in Jobs' calculated religious imagery. Apple has taken the bold step of replacing its best-selling iPod—the iPod mini—with a new device, the iPod nano. And the iPod nano, which is just 62 percent of the size of the iPod mini it replaces, is something to behold. A full-featured iPod that utilizes flash memory rather than a hard disk for storage, the iPod nano is tiny—really tiny—and weighs just 1.5 ounces (42 grams), or less than the weight of eight US quarters. It's thinner than a number-two pencil, if you can believe that. And it's less than a third of the size of any of the devices that allegedly compete with it.

Now, you might wonder about Apple's bizarre fetish with small things. The company's devices and PCs are routinely marketed for their small sizes (as with the Mac mini, and the iMac's "Where did they hide the computer?" tagline). I'm not sure that mainstream America is as fixated on smallness as Apple is. But the iPod nano is unquestionably cool, and unquestionably beautiful. Available in classic iPod white or a new black color, the iPod nano boasts 2GB (500 songs) or 4GB (1000 songs) capacities for $199 and $249, respectively. And color-obsessed fans of the iPod mini can get a carton of five colored nano tubes if they'd like to make more of a fashion statement.

Why is the iPod nano so important? If you look beyond the silly name (why didn't Apple just keep the iPod mini branding?), it's clear that the iPod nano won't just protect Apple's market share but will likely improve it. That's an incredible proposition for a company that already dominates this particular market. But like Google, Apple is at its best when it takes bold steps. And even though the Microsoft-based MP3 player and music service competition is barely treading water, I have to admit I like to see Apple just taking it to them and not holding back. The iPod nano sends a message, and that message is that Apple isn't complacent. From a consumer's perspective, there's a lot to like there.

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Reader Comments
Apple is following a no prisioners taken strategy based on higher and higher levels of design excellence that permit its keeping a pseudo-propietary monopoly of its music service and exemplary devices. Watch out Microsoft for this strategy can be used in several other areas. Douglas Novo -September 14, 2005 Apple is a company of innovation with a vision for itself and its product users. Microsoft is an imitator (and thief) targeted at satiating appetites using the lowest common denominator, seeking the widest possible consumer and marketplace domination, with very limited regard to product quality. Apple is to Mercedes as Microsoft is to McDonalds. The virtual monopoly Apple now enjoys in its marketspace has been brought about by the sheer consumer **** and envy for its latest products (as well as their historically renowned reliability and functionality). That is in stark contrast to the very real self-determined market monopoly of Microsoft, which has used and continues to use every predatory and manipulative trick in the book (legal or otherwise) to ram their product portfolio onto the consumer (and then trap them with slippery licensing requirements, resulting with very high forced upgrade costs in the future). Tyrants make fortunes fast, die horribly, and are remembered only for their villany. Apple (with Jobs) shows the way to a lasting, successful visionary business model based on product innovation, style, functionality, and corporate integrity. This is not applicable to the Gates/Balmer creepshow. I provide technical support to business and corporations using Microsoft Windows and Unix/Linux. After years of owning countless Windows PC laptops and workstations myself, I now use only a Powerbook G4 with an iPod (there's considerable irony in using an Apple computer to diagnose a broken Windows network). It just works, flawlessly and effortlessly, always. Which I can never say about my clients' PC servers and desktops running Microsoft Windows; but that's where I make my living. Mike T -September 14, 2005 Its so simple - business buys functional & cheap, consumers go for design and fashion. I still think that Jobs is a bit paranoid else why wouldn't he enable wma files to play on his kit, and hobble the ROKR phone with only 100 songs? Peter -September 15, 2005 Who buys products based on hype - sheep. Apple fans are as fanatical as mad dog Jobs. They think they invented the hard drive based MP3 player. Soon the lawsuits will come and sort out the madness. Sony made alot of money on proprietary crap but they aren't any more. That isn't a sound business model. Wait until the telco's and evil media companies come for their piece of the pie, Jobs will be selling Madonna exclusively. Gyp Joe -September 19, 2005 Sheep buy Microsoft dumbed-down feature-laden (useless) commodity crap. Style and quality-conscious people buy Apple. iPods aren't hype, they are simply the best designed and most user friendly music players GLOBALLY. I've owned Rio, Samsung and Dell MP3 players - sold them all after the novelty wore off and then bought an iPod - have had it for two years (no need to sell it). This is not sheep-think - it's staying with something that is beautifully designed and works without fail. *sigh* Gyp Joe - get a clue, man. BMon -September 21, 2005 Why do people like this go on saying that Apple's computers are expensive? The cheapest Mac is $500 and it outperforms any PC at the same price. Probably 80% of Apple's models are under $2000 and probably 90% of their sales are under $2000. Yet journalists still write that "Apple's approach to product development might be holding it back in the PC industry, where its Macs often cost in excess of $2000 or $3000." David -September 21, 2005 http://news.bbc.co.uk/1/hi/magazine/4265374.stm SJ -September 21, 2005 a a -September 21, 2005 Beautiful looking device, but the tie-in to iTunes is a killer for me. I find Napster's 'Napster to Go' service perfect for the way I listen to music and until iTunes provides a similar type of of rental service or they provide compatibility with music services that do, I'm just not interested. Danny -September 21, 2005 That’s awesome (http://news.bbc.co.uk/1/hi/magazine/4265374.stm) .. For all you apple lovers go suck a peach!!! As for the gentleman that supports MS, and linux/unix systems why don’t you do your job and maybe the systems will be stable. I’ve been in complete MS shops for years and as long as you have the correct policies in place all is well. Until of course one of your sales reps needs a laptop replaced because they spilled coke on it but O'well if they had a Mac maybe it wouldn’t have needed to be replaced (I guess that what your $35000 G4 owners will tell me) Yours Truly Mac Hatta PS.. I was am a graduate in the studies of Graphic Design and never used a Mac other than in school. I was sick of those stupid out of memory errors (circa 1997). Mac Hatta -September 21, 2005 I don't get it. There was a major revolt when buyers of the first iPod discovered that its battery could not be replaced. The new iPod Nano now has the same problem and nobody seems to be talking about it. I see no problem, other than consumer-disregard greed, with providing the Nano with a battery that easily slides out for replacement much like with hearing aids. I for one am not ready to pay several hundreds of dollars for a device that must be trashed as soon as one lithium battery wears out. Steve -September 21, 2005 Uh oh. I had stopped in an Apple store this past Sunday and was told that the Nano's battery could not be replaced by the user. But, now having been addressed as "u dumb" and not able to claim that I've never done anything dumb in my life; I thought I'd better verify. I called Apple (800-MY-APPLE) and asked if the battery was replaceable. Apple's answer: not by the user, just send the unit in to Apple for replacement. Cost: $100 for parts, $20 for labor. Nope, this dumb will still pass. Steve -September 22, 2005 still dumb though. Steve Jobs Right Ball -September 22, 2005 RE Mac Hatta ... As for the gentleman that supports MS, and linux/unix systems why don’t you do your job and maybe the systems will be stable. I’ve been in complete MS shops for years and as long as you have the correct policies in place all is well. >> If that were the case I'd be a happy man, IT IS NOT. I work Corporate and Enterprise, no amount of fiddling with Policies is going to fix OS bugs, buggered services, and applications failures. A single bad entry in AD will take an MS Win2k3 Doman or Cluster off-line, ntfs only journals metadata not files, opening any file over 2Gb in Windows is inviting a reboot, Antivirus & Antispyware are a must because the security model is so bad, try opening two Access databases without choking your P4, video editing the same. When your OS is so hackenied that you have to violate core system (ring) privaleges to get multimedia hardware to work, you've broken your OS. When you have a GUI bound to the Executive Layer (ie: your OS can't do run or do anything usefull without a GUI), you have just multipied by a factor of 10 the potential points-of-failure system wide. Windows2k3 and XP spend half the time snapshoting, backing up, replicating, and generaly trying to keep itself from breaking or getting broke. These are not issues on Sun solaris, Linux and Apple OSX systems. When you have Engineers running week long simulations on a compute farm, it's not running Windows. When we ftp out a 30GB-90GB tgz "tape out" for fabrication it's not going out over a Windows server. When we have to backup over 200gigs of data from a single NetApp, it's not done on a PC. When US battleships using Windows as the core component of the navigation and control systems choke on the high seas you pray they're not heading to a battle zone (ask the Yorktown). Corporate and Enterprise infrastructure is about reliability, managability, and performance, and that means commercial Unix or it's cousin Linux. The MS Windows OS continues to exist because 1.Intel manages to crank out fast enough cpus that can run it. 2.MS Office. 3.Games 4.cheap chinese hardware. At my office we love MSCE's 'cause most of them wind up breaking their own systems, which we are then called in to fix. You had better stick to Graphics Design, and read Operating Systems: Design and Implementation by Tanenbaum before you stick you foot in your mouth again. Mike T -October 16, 2005 READER COMMENTS: We want to hear what you have to say about this article!     Acceptable Use Policy Your Comments (required): Your email is only used if our editors need to contact you. It is not used or stored for any other purpose, nor posted with your comments. Enter the text from the image below Please refresh the page if you have trouble reading this text.