Apples rise o ccurred while so ny a f irm o nce syno

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: d has vaulted past retail giants Wal-Mart, Best Buy, and Target to beco me the number o ne music retailer in the wo rld. To day’s iTunes is a digital media po werho use, selling mo vies, TV sho ws, games, and o ther applicatio ns. And with po dcasting, Apple’s iTunes University even lets students at participating scho o ls put their pro f esso rs’ lectures o n their gym playlist f o r f ree. Surf ing the f if th wave has increased the value o f Apple sto ck sixteenf o ld six years af ter the iP o d’s launch. Ride these waves to riches, but miss the po wer and pro mise o f Mo o re’s Law and yo u risk getting swept away in its riptide. Apple’s rise o ccurred while So ny, a f irm o nce syno nymo us with po rtable music, sat o n the sidelines unwilling to get o n the surf bo ard. So ny’s sto ck stagnated, barely mo ving in six years. The f irm has laid o f f tho usands o f wo rkers while ceding leadership in digital music (and video ) to Apple. Table 5.1 To p U.S. Music Retailers 1992 2005 2006 2008 1. Musicland 1. Wal‐Mart 1. Wal‐Mart 1. iTu n es 2. The Handleman 2. Best Buy 2. Best Buy 2. Wal‐Mart 3. Tower Records 3. Target 3. Target 3. Best Buy 4. Trans World Music … 4. iTu n es, Amaz on tie 4. Amaz on, Target tie 7 . i Tunes Mo o re’s Law restru ctu res in d u stries. Th e firms th at d o min ated mu sic sales wh en yo u were b o rn are n o w b an kru p t, wh ile o n e th at h ad n ever so ld a p h ysical mu sic CD n o w sells mo re th an an yo n eelse. So urce: Michelle Quinn and Dawn C. Chmielewski, “To p Music Seller’s Sto re Has No Do o r,” Lo s Angeles Times, April 4, 2008. Table 5.2 Tech’s P rice/ P erf o rmance Trends in Actio n: Amazo n Kindle and Apple Music Sto rage Amaz o n Kin d le Ap p le First Generation Fourth Generation iPod iCloud 250 MB 5 GB 2 GB 5 GB November 2007 September 2011 October 2001 October 2011 $399 $399 $79 Free Amazo n’s f irst Kindle so ld f o r nearly $ 400. Less than f o ur years later, Amazo n was selling an updated versio n o f the Kindle f o r o ne-f if th that price. Similarly, Apple o f f ered 5 GB o f music sto rage in the o riginal iP o d (also priced at ro ughly $ 400). By the iP o d’s tenth birthday, Apple was giving away 5 GB o f sto rage (f o r music o r o ther media) f o r f ree via its iClo ud service. Other f acto rs inf luence price dro ps, such as being able to pro duce pro ducts and their co mpo nents at scale, but Mo o re’s Law and related price/ perf o rmance trends are clearly behind the price decreases we see acro ss a wide variety o f tech pro ducts and services. While the change in hard drive prices isn’t directly part o f Mo o re’s Law (hard drives are magnetic sto rage, no t silico n chips), as no ted earlier, the f aster and cheaper pheno meno n applies to sto rage, to o . Lo o k to Amazo n as ano ther example o f jumping o nto a o nce-impo ssible o ppo rtunity co urtesy o f the price/ perf o rmance curve. When Amazo m was f o unded in 1995, the largest co rpo rate database was o ne terabyte, o r TB (see No te 5.14 "Bits and Bytes") in size. In 2003, the f irm o f f ered its “Search I...
View Full Document

This document was uploaded on 01/31/2014.

Ask a homework question - tutors are online