Putting it together

Apple made two announcements Wednesday that still have people talking a day later—the release of a cell phone capable of playing music from the iTunes Music Store and a brand new iPod model called the nano. As significant as those announcements are—and they are very, very significant—they may have drawn attention away from some other noteworthy news Apple delivered Wednesday: new car companies have signed on to support the iPod.

Apple has done a good job of marketing the iPod to consumers over the past few years, leading it to become one of the most sought after consumer devices on the market. More importantly, Apple has targeted very specific market segments to work with some of the largest companies in the world, allowing users to take their music with them to more places.

The automobile industry is a good example of this. So the significance that more than 30 percent of the cars sold in the US in 2006 will offer iPod integration should not be underrated. Currently Apple has deals with BMW, Ferrari, Mercedes Benz, Volvo, Volkswagen and other companies to integrate the iPod integration in their cars. This doesn’t even include after-market products from companies like Harman Kardon that allow integration into many different models.

Most people spend a great deal of time in their car. Having a third-party transmitter, a cassette adapter, or a similar accessory that links the iPod to the car stereo will suffice for some drivers; for others, however, there is just no substitute for true integration. Being able to control the iPod from the steering wheel controls or through the stereo gives users a much better feeling about the iPod experience.

So Apple seems to have a lock on the automobile industry. With the ability to use cables to connect the iPod to your home theater or use a speaker system like the one offered by Bose, the company has the home covered as well. The next market for Apple to tackle is mobile.

I know that many people wanted Apple to build its own phone and use a scaled down version of Mac OS X as the operating system, but I don’t know if that would be the best move for the company at this point. The Motorola ROKR is a nice-looking phone and it provides what most people were asking for—iTunes integration. I’m not sure that I would want to use the external speakers of the phone for too long, but with a headset it’s a fine device. More important, Apple was able to partner with two of the biggest companies in the mobile space to bring the iTunes experience to a whole new market. That is a huge deal.

Even though it might appear from the sea of white headphones on people walking down the street that everyone already has an iPod, that’s not really the case. There is a huge untapped market out there that Apple needs to be proactive in being the first point of contact for downloading and sharing music. This is exactly what the company accomplished with the ROKR. When people think of legally downloaded music, they think of Apple, when they think of the most popular music device, they think of Apple, and now, when they think of music on a mobile phone, they will think of Apple. That is quite an accomplishment.

Another thought on this week’s news: Apple CEO Steve Jobs is probably one of the only people in the industry that is able to walk on stage and kill one of the company’s most popular products and still get cheers from the audience.

I thought a lot about the iPod mini since attending the event Wednesday, and the more I think about it, the more brilliant I think the strategy is. Jobs said that the mini was the company’s most popular model and the one the competition has focused much of their time trying to beat. So, if you’re Apple, what do you do? Add capacity to it? Change the color? All of the competitors can do that, so that’s not going to keep you ahead of everyone else.

So instead, how about you wipe the most popular iPod off the product grid completely and replace it with an amazing looking iPod that is half as thick as the competitors?

Just as the competition gets a lock on the iPod mini, Apple completely changed the game—that’s what it takes to continue to lead this type of fast flowing market. With moves like this, Apple will dominate the music market for some time.

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