Monday, June 06, 2005

A Stream Come Through...

Here's a little nugget from Merrill Lynch's Steve Milunovich on Apple (APPL). With paid online music at only 5% market share, you can see there's still a huge amount of creative destruction ahead in the music business. Note that Apple's management believes that many youths will never buy a CD. I wholeheartedly agree with this view. Lastly, it is interesting to note that Apple isn't optimistic that satellite radio will take off. Perhaps somebody should tell them that it already has. I bought an XM radio earlier this year and while it's not as good as listening to my iPod, its superior to what conventional radio has to offer today. And by the way, the song was wrong -- Video didn't kill the radio. The incompetent management team at Clear Channel did.

Apple doesn't want to get distracted from music. Only 5% of paid music is online today; the company says many youths will never buy a CD. The company continues to downplay video, pointing out that movies take too long to down for now, are not watched over and over, and that unlike music there are many ways to acquire movies. Still, we think video capability (especially for music videos) could be added to the iPod. Audio books and podcasting should contribute to iPod's popularity; management was not optimistic that satellite radio would take off.


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