My $100 Gamble
At a Giants game last summer, we made a bet. I bet Ken $100 1 that in one year, Apple would still own at least 70 percent of the mp3 player and music download market. At the time, I had recently finished testing the latest iTunes Store killer, MSFT and MTV's URGE. I liked it, but overall: meh. The only thing URGE is going to kill is time. I had also just tested out the new Sansa--at the time the hot shit iPod killer du jour--and while I thought it was hot and sexy, I didn't think the Cupertino homicide division was going to be called to the scene of a crime anytime soon.
I felt my bet was pretty safe. But now I'm worried that I'm going to owe Ken a Ben Franklin, and I'll tell you why: Xbox 360. Specifically, I realized my bet was in trouble when I sat next to a guy watching movies on his PSP. Allow me to explain.
The PSP is nearly as iconic as the iPod. While my DS has sat in a drawer unused for many months, if it had a display like the PSP and an easy way to load movies or TV shows on it, you can bet that it would have a dedicated pocket in my Jack Spade man bag along with my iPod and SD600. But I'm not really a gamer, and I won't be buying a PSP just to play bootleg movies. Meanwhile, the PS3 is inspiring not a gaming and entertainment revolution, but rather questions as to Sony's solvency.
Microsoft isn't Sony. It doesn't do revolution. Rather than rolling out products that will revolutionize the marketplace (or die trying!) it tends to do things well-enough and gradually refine things, making them incrementally better. And worse. Right now, the Zune is something of a mess. Getting video on it should be easier. Squirting is neat conceptually, but lacks something in practice. But stay tuned.
Just after it rolled out the Zune, MSFT unleashed the Xbox Live Video Marketplace. While the Mac may be Apple's digital media hub, it's clear that for MSFT, it's the Xbox. As a friend said in reaction to the Xbox Marketplace, "iTV better be pretty damn good."
If the Mac and the Xbox can be viewed as digital hubs, the iPod and Zune are the digital companions. If you don't already, you'll eventually use them as portable media centers to transport your music, movies, photos, files, games, and any other sort of digital content, from place to place and hub to hub.
As MSFT refines the Zune (and it will) and ties it into the Xbox via WiFi (and it will) the Zune is going to suddenly look a lot better. And more to the point, The Xbox Live Marketplace and Zune Marketplace are going to gain a lot more adopters.
I still think the iPod is the best portable media device out there, and the iTunes Store the best media store. But both largely depend on the other. Without the iPod, the Store would be just another place to buy media. And without the Store, the iPod would be just another player. The total package is the thing, and you cannot untangle the two.
But tie the Xbox to a more video-oriented Zune via WiFi (they already link via USB) and suddenly you have a new package that may be better than anything Apple has to offer. And while it isn't completely obvious yet at this point, MSFT is slightly ahead in the game. (Oh, and then there's Windows. Heard of it?)
The real iPod killer won't be a product, it will be a complete system.
Of course, we're just ahead of an Apple release cycle. An iPhone, or gaming system, or even a profoundly usable iTV will change the landscape entirely. But if Apple slips on January 9, or lets MSFT jump way out ahead, I'm gonna be down $100.
1. Ken wanted to bet a new iPod, since I already have five of those (plus iRivers, Creatives, and even some Thumps) the last thing I needed was another mp3 player. (In fact, Ken, if you read this, perhaps if you lose you might agree to take one off my hands.)