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iTune Could Be Catalyst to Apple’s Entry in Home Audio-Video Market

By Sophia Mayengbam

Apple's iTunes service has the potential to outstrip its formidable iPod business and may allow it to enter the home audio and video markets ahead of its competitors, said research firm ABI Research.

Apple computer’s third-quarter earnings saw a phenomenal rise beating Wall Street expectations, helped by strong growth and high level of penetration of iPod.

During the quarter, Apple sold a phenonemal 8.1 million iPods, a 32 percent increase on the number sold in the previous corresponding quarter. Sales of iPod accessories, both from Apple and from third parties such as Bose and JVC, are booming as well, including high-quality home "docking station" systems.

Microsoft is planning to launch an iPod competitor named ‘Zune’ before the Christmas holiday this year. Although Microsoft confessed that Zune will take years to beat iPod, the 70 percent of the market share which Apple currently owns will definitely lose some ground. Among these posing threats Apple still holds a chance to explore the home and audio market with the help of iTunes.

Research director Vamsi Sistla says, "The battle for portable devices has already been won by iPod (unless Microsoft's strategy for its Zune platform succeeds) but in the home and mobile markets, the prize is still up for grabs. iTunes could be a ‘Trojan Horse' through which Apple can enter the home market sooner than the competition."

According to ABI Research's new study, "Home and Portable Audio Device Markets", the key to this opportunity is consumers' growing interest in digital media connectivity in the home. And that according to analysts forecast is going to be the next big thing.

"I think we will soon see more line-powered consumer audio devices—high-end audio devices with AV receivers, and multi-room audio systems—adding support for iTunes to their current support for iPod," Sistla suggests.

With over a billion files downloaded from iTunes so far, computers all over the world are brimming with music, speech and video, often organized by iTunes client software into playlists and catalogues. Leveraging all that content, which users have already paid for and want to hear on a good home audio system or watch on a digital-ready TV, creates a huge opening for consumer electronics vendors.

ABI said that could happen through a standard personal computer. Or, it could be implemented through a dedicated "media center" PC. And Apple offers this already with the combination of its Mac Mini (now Intel-based) and Front Row networking software.

Sistla affirms, "The field is wide open for PC manufacturers and other vendors of home CE systems to capitalize on what should be a large and dynamic market."


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