Comment by JSR_FDED
2 days ago
To my mind the key insight from the presentation is this sentence:
“The 1% volume share target could translate into 4% value share, taking ~ 30% share of the >300 € price Band”
That’s Apple’s superpower in a nutshell - get the majority of the profit in the market, while everyone else battles each over over market share (and earn low margins in the process).
> get the majority of the profit in the market
But they werent able to just do this from the begining. It took a lot of building on the success and positive consumer appeal of the iPod.
The iPod applied the same strategy. When it launched it only worked on Macs with a FireWire port, meaning <10% of the personal computer market.
Also less space than a Nomad.
The killer feature of the iPod was the iTunes music store. Everybody was sick of the hoops the companies made you jump through to buy songs. Singles were basically out of fashion thanks to the domination of the CD, but most bands only released one or two good songs on a CD meaning each song cost like $5 and you had to rip it yourself and transfer it to whatever device you had, which was a lot of work. Apple realized people would buy a ton of music if you cut out the bullshit and price it reasonably, a strategy that had been previously untried in the market and no doubt caused a lot of CEO heartburn.
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Value share /= profit share
(and 4% /= majority, although I assume you were being poetic)