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News & Updates - Monday, December 20, 2004

iPod: Entrepreneurial Catalyst?

The AP reports that iPods are flying off the shelves this holiday season. No surpise here:

"The iPod, introduced in October 2001 and the No. 1 selling portable digital music player, has grown to represent about a quarter of Apple's revenues. Sales, which have reached a lifetime total of more than 5.7 million units in the last quarter results, have consistently exceeded expectations."

iPod, uPod, we allPod

We've been wondering if the iPod economy is creating opportunities for start-ups? Extraordinarily successful products like the iPod often act like cogs of the entrepreneurial wheel, attracting scores of start-ups which make up the spokes. We believe there are niche opportunities, but as for any genuine challenge to Apple's dominance, that will have to come from a big dog like Sony or Dell (at least in hardware). iTunes could face challenges from Real or MSFT or a homegrown solution (witness the recent success of the FireFox browser), but we wouldn't bet against Apple at this point.

Venturewire circles around the same question - and reaches a similar conclusion in today's VentureWire Alert: "While venture capitalists have dabbled in the online music sector -- especially early on - they have mostly left it to major record studios or large corporations like Apple. But with music subscription sales expected to grow from $113 million this year to $890 million in 2009, and digital downloads projected to reach $803 million in 2009, compared with $158 million this year, VC firms are taking a hard look at the sector.

Some say they see ways to profit from the digital music revolution, mostly in niches: wireless, of course, where venture-backed startups proliferate, business-to-business companies, music as part of a total entertainment package, and even peer-to-peer networking."

Read: Apple's IPod in Short Supply for Holidays [AP via Yahoo]
Read: VentureWire Alert