The Reach - Podcasting and other Portable Media Strategies

Wow, it’s been a while again.  For those of you that read this blog from time to time, I apologize.  It’s been a bit of a whirlwhind.

I’ve started a new project, which has put me on an around-the-world trip, starting in Hong Kong and Shenzhen.  We are touring factories of MP4 players, whether flash-based or HDD-based.  Flash capacity for most manufacturers in Shenzhen has increased dramatically, but not yet to the capacity of the iPod Nanos.  For example, the highest capacity I have found that someone will sell me is 4GB, with an SD card slot for an additional 4GB.

HDD based manufacturers are able to support easily 20GB, and some 40-60GB.  We have one supplier now that can support up to a 120GB HDD Media Player.  That will hold a lot of music, movies, training, education, etc.  That’s bigger than the HDD on my notebook I’m writing this post on!!

6 factories in 4 days.  Considering Shenzhen has about 10 million people in the city, that’s a lot of traffic to navigate, my friends.  And, we’ve collected “city” coffee mugs from some of the many Starbucks in Shenzhen and Hong Kong.

Next stop, Dubai.   Then on to London.  Then home (Dallas).  17 days; 25,000 miles (give or take a few); 4 major cultural groups, 4 languages; Starbucks, McDonalds, Chili’s, Pizza Hut, KFC - they’re everywhere and the same.

Leander Kahney, of Wired Magazine posts earlier this past week an article discussing Apple’s new agreement with Apple (Corps that is) saying that iPods could become the new physical media medium.  While that’s possible, why has no one else done it yet?

As you can see, the title of this post is somewhat sarcastic, as we do that for non-profit organizations all around the world - although not with music, but with a message that the non-profit “owns” and wants to get in the hands of others.

But, let’s explore the music side of this a bit.  Apple would have to be reasonably prescient to pick which artists and “records” to load in order to sell them profitably.  The beauty of today’s business model for Apple is that they don’t care what gets put on the iPods.  Selling a device with content on it raises the price somewhat and may take it over certain “psychological” pricing barriers.  Leander is careful to mention low-priced shuffles, etc, but in general, Apple is not in the low-price game.

Neat idea, but not sure it will happen.  In the mean time, we’ve been doing this almost a couple of years now and we’ll be just fine continuing regardless of Apple’s content distribution strategy.

I guess it’s about time to discuss the iPhone.  I’ve procrastinated on writing this post, due to the potential impact the iPhone has on the market and yet weighing the risks to Apple and other phone manufacturers.  It’s somewhat difficult to be unbiased on either side of the battle that has begun.

First, let me say that the pictures of the iPhone (check here with my friend Blake Burris of CocoaRadio for some great firsthand shots) look great.  The concepts of the OS and Software the phone is built around sound great.  Watch Steve present the Keynote at MacWorld for details.

Question - how will we like typing on a completely flat surface (the phone screen)?  It may take us a while to conform to a new manner of typing.  We’ve all gotten comfortable over the course of our lives with the raised keys with “finger curves” and the feeling of pressing down to create a keystroke.  I’m sure we can adjust, but wow - it will take some committed early adopters to stick with it!

Visual voicemail is new to cell technology, but old hat to VOIP users.  I’ve had it for 3 years now - a great invention.  Glad it’s finally coming to cell phones, although, since I have a Blackberry, technically I’ve been able to do this for a long time.

As usual, Steve blows people away, generally until they walk away and go…”hey - I’ve been doing this for a long time - how come he made it seem so special?”  Welcome to the mystique that is Steve Jobs.

Don’t get me wrong - I’m looking forward to seeing this on the market and how it will force all the other manufacturers to get moving on some creativity.  We, the consumers, will all benefit.  Let’s be glad!

Finally, some real numbers regarding these threats are shared in an article in the WSJ Online today (subscription required) by reporter Li Yuan.  Sony Ericsson has sold 16.5 million Walkman phones in 14 months (not bad!), Motorola has sold 15 million MP3 enabled phones to date.  Nokia is projecting that in 2006 they will have sold 80 million music phones, which means that in 1 year, they will have outperformed the cumulative sales of Apple iPods (approxmiately 70 million).  So, between the 3 largest cellphone handset manufacturers, that means that there are approximately 110 million MP3 enabled phones on the market today and growing rapidly.

Will Apple roll out the iPhone soon?  One would expect they cannot ignore these numbers  - it certainly is momentum that will not stop.

In the article, the Yuan mentions that Motorola states that about 50% of the MP3 enabled phones are used for music playing purposes - so true penetration and use of a multimedia phone is still some ways off.

As we’ve said here many times - the end game portable media device is the cell phone - not the iPod or other MP3 player.

Apple wins the battle of dealing with crises with this reponse to the Chinese manufacturing issues that were raised a few months ago and written about in this blog here but originally reported on MacWorld UK.

General response (and I agree) has been tremendous at the transparency and hard work of Apple to diligently investigate and report both the good and the bad of this situation.  Don’t just take my word for it - check it out Gizmodo, Boing Boing or The Unofficial Apple Weblog to name a few others that have supported their efforts, findings and general response to the issues raised.

Good job, Steve and the crew at Apple.  Thanks for showing us how to deal with a crisis.