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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 n.co 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...
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This document was uploaded on 01/31/2014.
- Winter '14