Study reveals Apple still gaining ground in music space
After recently completing its 12th bi-annual teen survey, research and investment firm PiperJaffray said Apple Computer continues to gain share in the digital music player and online music markets, despite the constant emergence of new competitors.
The survey, which polled nearly 1,000 high school students, found that iPod market share grew to 79 percent from 77 percent over the past six months. "Of the students surveyed in the fall 2006 PJC teen survey, we found that 72 percent own an MP3 player and 79 percent specifically own an iPod," analyst Gene Munster wrote in a summary of the survey results.
According to the study, 45 percent of students expect to buy a new digital music player in the next 12 months, up from 41 percent who said they expected to buy a player in the 12 months after the firm's spring 2006 survey. Of those expecting to buy an digital music player in the next 12 months, 76 percent indicated they would buy an iPod -- a figure which was slightly down from the 88 percent who said they planned to buy an iPod in the spring.
"While Apple may have lost some ground in this category, 76 percent is still significantly higher than the next highest at 8 percent (Sony)," Munster wrote.
Meanwhile, the study found that 79 percent of students are currently downloading their music online. However, most (72 percent in fall 2006, up from 65 percent in spring 2006) continue to use free (P2P) music sharing networks instead of paying for music legally.
"But of those students who use legal online music services, 91 percent said they use iTunes, which is up significantly from our spring 2006 survey, in which 71 percent of legal music downloaders said they use iTunes," Munster explained. "We believe this is a result of the increasing variety of content on iTunes."
At the same time, Munster said interest amongst teens in an music-enabled phone increased to 74 percent from 70 percent in the spring survey. "Importantly, teens are becoming more willing to pay more for this type of device with 43 percent of students said they would pay more than $200, up from 37 percent," he said.
The bottom line, Munster said, is that "Apple continues to dominate the [digital music] player and online music markets, despite new competitors constantly entering the market."
"We believe that winning over the teen demographic is critical to continued long-term growth and Apple is clearly in the lead in this market segment," the analyst added.
Munster maintains an "Outperform" rating on shares of Apple Computer with a price target of $99.
The survey, which polled nearly 1,000 high school students, found that iPod market share grew to 79 percent from 77 percent over the past six months. "Of the students surveyed in the fall 2006 PJC teen survey, we found that 72 percent own an MP3 player and 79 percent specifically own an iPod," analyst Gene Munster wrote in a summary of the survey results.
According to the study, 45 percent of students expect to buy a new digital music player in the next 12 months, up from 41 percent who said they expected to buy a player in the 12 months after the firm's spring 2006 survey. Of those expecting to buy an digital music player in the next 12 months, 76 percent indicated they would buy an iPod -- a figure which was slightly down from the 88 percent who said they planned to buy an iPod in the spring.
"While Apple may have lost some ground in this category, 76 percent is still significantly higher than the next highest at 8 percent (Sony)," Munster wrote.
Meanwhile, the study found that 79 percent of students are currently downloading their music online. However, most (72 percent in fall 2006, up from 65 percent in spring 2006) continue to use free (P2P) music sharing networks instead of paying for music legally.
"But of those students who use legal online music services, 91 percent said they use iTunes, which is up significantly from our spring 2006 survey, in which 71 percent of legal music downloaders said they use iTunes," Munster explained. "We believe this is a result of the increasing variety of content on iTunes."
At the same time, Munster said interest amongst teens in an music-enabled phone increased to 74 percent from 70 percent in the spring survey. "Importantly, teens are becoming more willing to pay more for this type of device with 43 percent of students said they would pay more than $200, up from 37 percent," he said.
The bottom line, Munster said, is that "Apple continues to dominate the [digital music] player and online music markets, despite new competitors constantly entering the market."
"We believe that winning over the teen demographic is critical to continued long-term growth and Apple is clearly in the lead in this market segment," the analyst added.
Munster maintains an "Outperform" rating on shares of Apple Computer with a price target of $99.
Comments
"Importantly, teens are becoming more willing to pay more for this type of device with 37 percent of students said they would pay more than $200, up from 43 percent," he said.
Come again?
Interesting article. By these estaminets Apple should sell a lot of iPods this Christmas.
"Importantly, teens are becoming more willing to pay more for this type of device with 37 percent of students said they would pay more than $200, up from 43 percent," he said.
Wait a minute...up is down, black is white?
Seriously I hope this is AppleInsider misquoting, because I'm going to have to question the legitimacy of the whole report if this analyst can't grasp the concept of an ordinal counting system.
EDIT: Curse you jdcfsu! You're just too fast for me.
Seriously I hope this is AppleInsider misquoting, because I'm going to have to question the legitimacy of the whole report if this analyst can't grasp the concept of an ordinal counting system.
Typo? 37%, up from 34%, not 43%?
Typo? 37%, up from 34%, not 43%?
The chart says 32%, not 37%, so we could be dealing with two typos.
Aside: I'd be interested to see these stats in a year, after Zune makes its splash. Not seeing Zune on the list (except perhaps in "other") means either high schoolers don't know about it, or they're not interested (at least until their friends buy one).
The chart says 32%, not 37%, so we could be dealing with two typos.
No, the chart doesn't contain the question this stat is referring to (i.e. Would you be willing to pay more than $200 for an phone that is also an MP3 player)
- the iTunes movie store sold 125,000 movies in 7 days, but is a faliure
- the new Nano is outselling all its competitors (maybe even combined) and it is not the holiday or back to school season, yet it is failing in the Market place
- Microsoft is expected to succeed (modestly) with an overpriced player that previously failed twice in the market and offers few advantages over the iPod/iTunes combo, but is inferior in all other respects
- the iPod is gaining mind share and market share among teens and probably adults as well, yet Apple is failing to caplitalize on the its success by introducing new players that are only modestly better than they ealier smash hits.
In light of all this bad good news i don't see how apple can survive another quarter without making several billion dollars.
No, the chart doesn't contain the question this stat is referring to (i.e. Would you be willing to pay more than $200 for an phone that is also an MP3 player)
Guys, that's a direct quote. I will ask the analyst what he meant....
No, the chart doesn't contain the question this stat is referring to (i.e. Would you be willing to pay more than $200 for an phone that is also an MP3 player)
ahh, I missed that part. What I get for just skimming the article...
Did they miss the memo that Dell was leaving this market?
Apparently not.
My friend's son kept telling me how he didn't like my iPod and how he was going to get a DELL DJ.
I really rubbed it in when I told him he couldn't because DELL stopped making them.
Many of these teens probably have not done any research into what is available other than looking at what their friends are using.
You need to take surveys of teens with a grain of salt because they didn't ask...
Who will be paying for your MP3 player?
Most these kids are probably planning on asking their parents to get them an MP3 player for Christmas.
So let me see if I understand the recent news:
- the iTunes movie store sold 125,000 movies in 7 days, but is a faliure
- the new Nano is outselling all its competitors (maybe even combined) and it is not the holiday or back to school season, yet it is failing in the Market place
- Microsoft is expected to succeed (modestly) with an overpriced player that previously failed twice in the market and offers few advantages over the iPod/iTunes combo, but is inferior in all other respects
- the iPod is gaining mind share and market share among teens and probably adults as well, yet Apple is failing to caplitalize on the its success by introducing new players that are only modestly better than they ealier smash hits.
In light of all this bad good news i don't see how apple can survive another quarter without making several billion dollars.
Hilarious.
"If we continue to do any better, we're sunk!"
Come again?
Interesting article. By these estaminets Apple should sell a lot of iPods this Christmas.
I interpret that comment as that they are interested in the music-enabled phones which won't really have any impact on iPods. It does speak well for sales of a potential iPhone.
At the same time, Munster said interest amongst teens in an music-enabled phone increased to 74 percent from 70 percent in the spring survey. "Importantly, teens are becoming more willing to pay more for this type of device with 43 percent of students said they would pay more than $200, up from 37 percent," he said.
Hilarious.
"If we continue to do any better, we're sunk!"
That will be the Microsoft motto for Zune re: losing $50 per unit sold.
Did they miss the memo that Dell was leaving this market?
That's exactly what I noticed, that means their survey is inaccurate because those votes were wasted.
I assume from those figures that Microsoft's Zune fits into the 7% other category.
Actually, the Zune hasn't come out yet..
That's exactly what I noticed, that means their survey is inaccurate because those votes were wasted.
Depends on exactly when the survey was done. It takes a while to compile the figures and write it up.
Dell sold such a small percentage that it doesn't really affect the final results. you can take their percentage, and spread it evenly amongst all of the WMA players, and it's still insignificant.