iPod faces stiff competition in crowded video market

When Apple released the original iPod in 2001, it entered an emerging field without much competition, and was able to quickly define the marketplace. The company doesn’t enjoy the same luxury when it comes to video players. In a market already rich with established products, the new iPod faces some stiff competition.

While Apple was early out of the gate with MP3 players, it’s playing catch up when it comes to video. Many of the other major vendors in the market—including Archos, Creative, and iRiver—already ship portable media players with video capabilities, and have for some time. Some of these players sport larger hard drives, support more video formats, or offer bigger displays.

Both the AV line and Gmini line of players from Archos, for example, have a built-in USB 2.0 host that opens up interesting recording options unmatched by the iPod.

“All the others are portable media players,” Archos COO Larry Smith told Playlist. “We’re portable media players and recorders.”

Indeed, Archos’ line of AV players act as portable digital video recorders (DVR) similar to a TiVo. The AV 500 and 700 can be linked to a TV, cable box, DVD player or other video device via a “pod” to digitally record television shows and movies which can be viewed on the player itself or a TV.

“Apple made a pretty big deal that they have some downloadable content,” said Smith. “Well the neat thing about our product you can get all that for free by recording it on your device and taking it with you.”

In addition to working as a DVR, an optional digital mini cam attachment converts the Archos AV 500 into a fully-functional camcorder, capable of recording up to 12 hours of MPEG-4 video to a 100GB hard drive. What’s more, both players boast ultra-large LCD screens—4-inches for the AV 500 and 7-inches on the AV 700.

Creative’s Zen Vision sports a 3.7-inch display (the display on the iPod is 2.5-inches) and supports a much wider array of video formats than the iPod—including MPEG-2, MPEG-4, XviD, WMV, and MJPEG—as well as TiVoToGo for viewing programs recorded from the television. iRiver’s PMC-120 features a wide 3.5-inch display and supports Windows Media video—a widely available format.

With the iPod just rolling out, Apple could face a much tougher sell convincing consumers to plunk down money for a player with fewer features than can be found on its competitors’ products. Some analysts, however, believe that many consumers will find those features a “moot point” as they are still largely shopping for a music player, and view video as an added bonus.

“I think the most important thing to keep in mind is that what Apple did was take one of its most popular models, the 20 GB iPod—in many ways the flagship product—and forget video for a moment, basically they kept it at the same price added 50 percent more storage, a better screen and made it thinner,” says Ross Rubin, director of industry analysis at NPD Techworld. “Certainly millions of customers are going to buy this product regardless of whether they have any intent to use the video features, and so because of that [Apple is] going to become the leader in the video player market.”

Yet Rubin also notes that when it comes to consumers shopping specifically for a video player, Apple faces a tougher sell.

“Let’s say they do care and are buying a product with video features, then it becomes a far more competitive field,” explains Rubin.

“Someone who’s looking particularly for video might be willing to accept a somewhat larger form factor than what the iPod with video offers, and in terms of a feature basis they’re probably a little behind. But they were on the music front too,” says Rubin, citing MP3 players with extras such as FM tuners and built-in microphones which the iPod has dominated despite possessing fewer features.

With the holiday shopping season coming up, Apple faces the first real test of its new iPod with consumers. How they decide to spend their money—or refrain from doing so—in the coming months will ultimately settle the question.

Media representatives from iRiver and Creative failed to return numerous phone calls and emails for this story.

Mathew Honan is a San Francisco-based writer and photographer. His work has also appeared in Macworld, Wired, Time, and Salon.

For more on the iPod, please visit the iPod Product Guide.

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