We already know that Amazon.com has run a music store for years. Heck, along with dozens of books, toys, gizmos, and other material goods, I've purchased CDs, streamed music samples, and downloaded freebies galore. But word on the street is that the number one online retailer will follow Napster, Real Networks, Microsoft, and many others with its own music store and/or service as early as this summer; we first heard of the possibility last August. In addition to introducing a subscription service, Amazon may partner with an A-list MP3 manufacturer to deliver an Amazon-branded MP3 player that works with the service à la iTunes and the iPod. Imagine it: the aPod.In general, Amazon has a gigantic user base (55 million and counting) and major brand recognition.More specifically, the massive customer base that traditionally purchases CDs from Amazon will transition to digital downloads as MP3 players become ubiquitous; it'll be in Amazon's best interest to aid that transition.Music-service subscriptions are growing, and many others have blazed a rough trail; Amazon's purported summer launch might be excellent timing.Many new users may be attracted to a cell phone-like service through which an MP3 player is actually bundled free with a one- or two-year commitment. According to the Wall Street Journal article, this could happen.Although Apple has a near monopoly in this space, it's still way early in the game. Only about 20 percent of U.S. households have an MP3 player, according to the CEA.Again, according to the WSJ article, Amazon is responsible for selling 10 percent of all MP3 players purchased in the United States. Of course, a huge percentage of these sales are iPods.Amazon is developing its overall digital content holdings, including video.
It's way early, but there are a number of reasons to think that Amazon might be able to derail the iPod train:
All right, here's why Amazon Music Store won't disrupt Apple's dynasty:The forces at Microsoft, Creative, Samsung, SanDisk, and others have been trying to derail Apple for years. Casualties include Rio, Dell hard drive players, HP, and most recently, the Sony Walkman Bean, plus the egos of all mentioned (except maybe SanDisk's).
Say Amazon partners with Samsung to create the aPod. So far, these unions haven't worked out. Dell partnered with Creative, and what resulted was a solid but boring product that has been discontinued. Samsung launched a bunch of Napster players that didn't work out due to mediocre hardware and an even worse (at the time) Napster store. The concept of a seamless hardware/music store relationship is central to success, but Apple can control both sides of its equation. For Amazon's sake, let's hope that it can hire some innovative gadget designers.
Assuming the store will utilize Microsoft WMA, Amazon has lots of competition in its own league. Forget iTunes--it has to contend with Napster, MSN, Wal-Mart, Rhapsody, Virgin, Yahoo, Urge...the list goes on. Plus, you have some decent competitors emerging, such as the Toshiba Gigabeat S and the Creative Zen Vision:M. On the flip side, if Amazon goes AAC, ATRAC3 (uh, right), or a proprietary format, it misses out on the existing base and a still significant number of WMA players.
OK, what do you think?