Students march up and down Bascom Hill daily listening to music through their white ear buds. A muffled mix of rap, classical and pop music pierces the silence at libraries across campus. And everywhere, in backpacks, in purses and on arms, UW-Madison students carry their white, pink, yellow and green iPods, and are among the 30 million others who own iPods.
According to a report by the National Purchase Diary Group, the iPod accounted for 92.1 percent of the market for hard-drive-based music players. With a near-monopoly of the MP3 player industry, many may question what exactly has made Apple's iPod campaign so successful.
'I think what they've tried to do is really understand how consumers consume music,' said Monika Wingate, director of the A.C. Nielsen Center for Marketing Research.
The iPod's appeal comes from Apple's ability to connect with people by tapping into lifestyle and image views. The company's commercials, however, are not the only factor driving iPod sales, she added. Music lovers love the fact that somebody 'got' them.
'The consumers feel like, 'OK, this company understands and relates to how I want to consume music,'' Wingate said. The iPod becomes a safe choice because consumers know how it works and can rely on it, he added.
That reliability is what influences students to purchase Apple's brand of MP3 player over competitors. At the DoIT center, product manager Ross Yahnke noticed a dramatic increase in iPod sales at the start of the school year and when the Nano came out. He thought students buy iPods over its rivals because of its functionality.
'There's certainly the ease-of-use factor with the iPod being a very easy-to-use type of product. It just works,' Yahnke said.
The iPod's robustness and good battery power appeal to many consumers. There are less-expensive MP3 players available, but they are not as well designed, he said, adding, 'You get what you pay for.'
Yahnke called iPods 'an overall solution' for music enthusiasts. When they buy an iPod, they are buying the music program iTunes, an online music store and all the hardware included.
The iPod's popularity has increased immensely, due in part to the success of Apple's iTunes. 'Originally the iPod was just for the Macs,' Yahnke said. 'When Apple released iTunes for Windows and made them cross-platform compatible, then the sales just really went through the roof at that point.'
The ability to adapt is what helps Apple sell their MP3 players. The extras now available for iPods did not always exist. The first iPod, with only five gigabytes of storage, sold in 2001 for $399. The only function it possessed was the ability to play music. Now, for that same price, buyers receive an iPod that holds 60 gigabytes and plays music, videos and supports podcasts.
Apple stopped making the iPod Mini, a decision which led to Minis selling for about $260 on eBay. 'The iPod Minis were just tremendously popular, and, once they got discontinued, there was sort of a scramble to get what we had left,' Yahnke said.
Controlling virtually the entire MP3 industry begs the question: is it too late for other MP3-player manufacturers to get a foot in the door?
'They need to discover some kind of benefit that they can offer that Apple couldn't quickly respond to,' Wingate said. If they offer some unique benefit, people will be more likely to consider their product. If a competitor offers a cheaper item, word of mouth will take care of the rest, she said.
The fact remains that Apple computer sales never rival those of the iPod. 'I think that the challenge for Apple has been that their competitive advantage and point of differentiation is extremely relevant to a small segment of the market,' Wingate said. 'You have to really want a Mac to buy a Mac.'
Yahnke said he felt the opposite. 'I think that the iPods really have, in some sense, helped enable the sales of the Macs. I think [computer purchasers] started to rethink Apple a little bit.'
Of course, to maintain its hegemonic power, Apple must stay ahead of its primary competitor: itself. The minute they do not, Wingate said, somebody else has the opportunity to step into the market.
For now, those white ear buds will remain a staple on Bascom Hill, as Apple's iPod innovations continue to lure music fans.
