Angus Kidman23 April 2007, 10:42 AM
Sure, Apple may have sold 100 million iPods globally, but new research suggests that it's struggling to maintain enthusiasm for its music players, let alone convert that into PC sales success.
For people unlucky enough to be employed as brand management strategists, Apple Computer is frequently cited as a textbook case. In particular, its success with the iPod is often seen as a classic example of how brand loyalty, combined with continued design innovation, can help retain market leadership.
A fiercely debated concept amongst Apple loyalists is the notion of the "halo effect" -- that people who use iPods will be so enamoured of the experience that they'll ultimately abandon Windows PCs in favour of Macs. While Apple's sales have increased in recent years, its overall global market share has remained largely static at 5% or so, suggesting that the halo effect may be more myth than reality.
Apple itself undertook research amongst iTunes store users last year to see what PCs they planned to purchase next. Those results haven't been made public yet, and a recent survey of Australian consumers suggests why Apple might not want to reveal the findings.
A late 2006 study of 3,000 Australian households by Connection Research found that while Apple makes a strong showing when consumers are asked to identify (without prompting) their preferred supplier of PCs and music players, those numbers aren't as strong as you'd suspect for a company that's repeatedly said to have 80% or more of the global digital music player market. More significantly, its numbers in both categories have declined compared to the same survey a year earlier.
In the PC market space, the most popular response for preferred desktop PC supplier was Dell, cited by 16.2%, followed by Hewlett-Packard with 9.6%, Harvey Norman (which doesn't actually sell its own-branded PCs) with 7.8%, and Acer with 5.1%. Apple was cited by just 3.8%, which is below its generally accepted market share. "Apple's actually declined a bit here," said Connection Research research director Graeme Philipson.
The results weren't much more reassuring in the music category. "In music, Apple is way ahead, but again Apple's lead has dissipated," Philipson said. Apple was picked as preferred music player supplier by 20% of respondents. While that was well ahead of second-placed Sony (5%), it suggests a degree of dissatisfaction with the Apple product.
Connection found that 60% of the households responding owned at least one digital music player. If we assume Apple has 80% market share, that means just under half the respondents already own an iPod, but despite that, only 20% identified Apple as their brand of choice.
The forthcoming iPhone may prove an important juncture for Apple, since the average household in the survey already has 2.51 mobile phones. The typical Australian spends 5.5 hours a week listening to music, but whether they'll all still be doing so on an iPod in a year's time remains up for debate.