Portable Multimedia Products Are Repositioned in the Market
The video iPod from the previous generation marked a change in the trend from providing just music towards to also including video content. The new iPod nano is equipped with a 2-inch screen with a resolution similar to the iPod classic - 320x240 - and plays video clips. This means that the combination of MP3 with a video playback application will become increasingly popular and that differences between MP3 digital music players and traditional PMP products will become less apparent. In the future it may be helpful to use a wide-ranging definition of PMPs to include these two product types. In view of this, companies should reposition different market segments by considering the demand of various target audiences. For example, music players for plain music, video players for advanced devices integrating video playback, or media center products which include wireless networks, mobile communications connections, satellite reception, digital TV, and products for portable storage.
Portable multimedia products used to be classified as value-line, mid-range, or high-end products according to their hardware specifications like storage space and screen size. However, with products like the iPod touch hitting the market, products are being repositioned with higher specifications such as a touch screen displays and wireless downloading. This suggests that besides product specifications, user interface design, software applications, the provision of content, and user experience will become the criteria of product positioning and the competition focus for vendors.
Cross-Industry Links Stimulate Growth of Portable Multimedia Product and Service Market
Apple first combined iPod devices and iTunes, and won licenses from music companies to sell music online. Apple then cooperated with video content companies to launch the video iPod which enabled MP3 products to play video. Now, Apple cooperates with a coffee shop chain to provide wireless internet services. Apple has gone through stages of hardware development, incorporated software development and applications, and is cooperating with the content providers on related services. Now, it collaborates with telecom operators or wireless internet service providers to offer internet services.
As audio-video entertainment content is becoming more and more digitized, all wired and wireless communications technologies and services are following the trend of digital convergence. The multi-function nature of mobile phones and with mobile services becoming more easy-to-use, consumer demand for mobile entertainment has been stimulated and led to the addition of wireless functions into portable multimedia products. In the future, hardware and software development, the combination of content and services, the improvement of multi-mode receiving functions, and the creation of an industry chain through cross-industry partnerships will be crucial factors in portable multimedia product market competition.
iPhone and iPod Touch Create Sophisticated Market Segments
Apple iPod touch and iPhone are strikingly similar in their respective functions. The main difference between them only lies in the mobile phone function. Before iPod touch was launched, iPhone was the only choice for consumers who were looking for an Apple portable multimedia device equipped with a touch screen. But the problem was that iPhone was practicing bundled sales with mobile services which forced customers to pay large monthly subscription fees. For some consumers, the purpose of using the iPhone was limited to its multi-touch screen and mobile internet functions, and therefore efforts were made to unlock the bundling with mobile phone services. Some consumers went so far as to purchase iPhones without numbers and disabled the mobile phone function of their iPhones.
iPod touch has provided consumers looking for multimedia and touch screen functions with an additional option. The positioning of this product is also regarded as a move to further divide the market into more sophisticated segments. Nevertheless, it is possible that iPod touch might have a replacement effect on the iPhone or affect the willingness of mobile operators to cooperate with Apple. Whether other feature phones or smart phones will come into being as an extension of the iPod product line is also worth keeping an eye on.
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