Apple Controls The Portable Music Player Market.

This whole iPod situation must be a sweet and pleasant surprise for Steve Jobs and company. Apple controls the portable music player market and the online music market. Why? How? The iPod.

Rather, specifically, the success of the iPod and the options it gives Apple. For example, AppleInsider reports there’s the new distribution deal with Radio Shack.

Not only does Apple sell the iPod models in all of its own stores, iPods are available everywhere else. Best Buy. CompUSA. HP. Radio Shack. You get the idea.

You name it. If the box store retailers sell cool stuff, they either sell or would like to sell iPods. Why? Because that’s what people are buying, and Apple’s iPod lineup provides an attactive model for every pocketbook. iPods are competitively priced and have all the right features (note that I said “right features” not every damned feature you can cram into a box that size).

Apple has a lock on cool, right now. And now a lock on distribution.

Chances are good Apple has a lock on component supply, too. Even if Creative could get people to buy their latest Zen-whatever XD-FG-102Q-L-ABC-123-wireless-does-everything model, they’d have a hard time coming up with enough hard drives at low enough prices to compete with Apple’s buying power.

Hence, Apple remains competitive on price, too. With products that cost so little anyway, a competitor needs a number of crucial items to fall into play to become a threat to Apple’s iPod kingdom.

1 - lower manufacturing cost
2 - more features
3 - better ‘cool factor’
4 - better distribution (or, as good as)
5 - lower retail price
6 - mucho marketing dollars to spend
7 - seamless end-to-end experience (iPod, iTunes, iTMS, Mac or Windows)

That’s what’s required now to unseat Apple. Who’s got the ability to do that? Creative? Nope. Napster? Nope. Wal-Mart? Really, no. They’re selling iPods, too. Who?

Microsoft?

Possibly, but not probable. For now.

Apple, under Steve Jobs, wisely stayed out of the whole PDA market. Palm has taken a few baths. Many of the Japanese PocketPC makers complain that there’s no money in that market.

Jobs always said that the basic functionality of the PDA would show up in cell phones.

While that’s arguable, it’s also arguable that the iPod’s functionality could show up in cell phones-- the ability to play music. Add wireless headphones and that argument is more than plausible.

It’s the changing marketplace that could challenge iPods current reign. Maybe Microsoft could win this battle simply by not worrying much about it and let the market change; change toward cell phones that do everything. Then Microsoft could re-group in the home media center (they need to do something).

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