The iPod Wars: Sony & Microsoft Didn’t Stand A Chance

The initial purpose of the iPod was merely to help sell more Macs.
Apple developed a new strategy, the Mac would become a digital media hub.
So, Steve Jobs had engineers work on software to edit and manage digital media.
During this process, Apple realized that existing MP3 players were terrible.
And they realized that they could create a superior MP3 player and developed the iPod.
By 2002, only 78,000 iPods were sold.
If the iPod was going to rise to its potential, Apple was going to have to release it to PC users.
Apple's top brass pushed to release iPod to PC, and Jobs pushed back at first, saying Microsoft users will have iPods over his dead body.
In the end, Apple smartly released the iPod for Windows in July 2002, opening up to the other 95% of the market.
Apple had one distribution decision that was puzzling at first sight.

Apple chose to not sell iPods at Walmart or Best Buy, America's biggest retailer and electronics chain.

Apple did not want the iPod to be associated with the cheap electronics found at Walmart.
And they also did not want the iPod stripped down to a specification chart at Best Buy.

Those charts wouldn't showcase the user experience that Apple worked so hard to achieve.

The iPod was designed with one thing in mind, user experience and anything that got in the way was thrown out.

Jobs rode the design team hard and insisted that getting to a song or a function should take no more than three clicks.

These little details aren't shown on the specification cards at retailers, so Apple opens its own stores.

To help with this endeavor, Jobs recruited former CEO of the GAP Milliard Drexler and also recruited Business Executive Ron Johnson, who was credited for making Target a fresh brand.

Apple's formula was unbeatable, the iPod dominated the MP3 market, selling 100 million units by 2007.


Of all of the companies competing in personal audio, Steve Jobs respected and feared Sony the most.

Sony was still the king of consumer electronics back then, and it had a two-year head start on Apple, releasing two MP3 players in 1999.
Sony had two significant distractions that allowed Apple to take over the market.
Sony's legendary co-founder Akio Morita who was Steve Jobs's role model, by the way, stepped down as Sony's Chairman in 1995 and passed away in 1999.
Sony was led by Nobuyuki Idei, who lacked the charisma and respect that the founding generation possessed.
Idei delegated significant decision-making l down to individual divisions of the company, which made it challenging to execute long-term strategies.
And the second distraction was Sony's Music Entertainment division.
Sony's interest in protecting its music business conflicted with creating user-friendly MP3 players.
The two players released in 1999 were far inferior to the iPod.
The Memory Stick Walkman was developed by one Division and The Music Clip was developed by another division, and the result was two products with its own strengths but both inferior to the iPod.
Sony regrouped in 2004 and release the Network Walkman, but its music business hurt the product big time.
Sony did not want its products enabling file sharing, so it made the Network Walkman incompatible with the MP3 format, which is what users wanted.
And the Network Walkman's music selection was limited.

Now there's Microsoft.
Microsoft had an answer, The Portable Media Center, PMC.
PMC was a software platform that would allow Apple's competitors to offer not just music, but video as well.
By 2004, Creative, iRiver, and Samsung released PMCs.
The PMCs were dead on arrival because of a lack of video content.
Microsoft did not realize that majority of people did not want to deal with transferring movies from DvDs to watch on the go.


Microsoft needed to provide easily accessible video content.
Microsoft managed to strike a deal with Major League Baseball and CinemaNow.

That wasn't enough content to justify the price of PMC devices.
With the failure of PMC, Microsoft had a decision to make, should it compete directly with Apple with a device of its own?
They chose to compete.
This time, Microsoft's failure was branding.
Microsoft was five years late to the scene.
By then, the iPod was iconic.
If Microsoft was going to seriously compete with Apple, it needed to release something innovative and exciting.
That was the Zune. It was a quality device with a good interface, but it wasn't exciting.
At its highest point, the Zune reached 10% market share of hard-drive-based MP3 players and declined after that.
Microsoft, like Sony and many other companies, failed to release a product that could be considered a legitimate rival to the iPod.
There was no beating Apple in design and branding.
Music Credit: Marxist Arrow by Twin Musicom is licensed under a Creative Commons Attribution license (https://creativecommons.org/licenses/...)
Artist: http://www.twinmusicom.org/