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Categorizing technologies

In the graph below the grey circles represent the US penetration (percentage of households which own) MP3 players.

Screen Shot 2014-05-19 at 5-19-7.55.22 PM

Superimposed on this sparse sample graph is a line showing the sales of iPod touch. This second graph has a different scale, shown with a gridline at 10,000, representing millions of units shipped by Apple. To smooth out seasonality I show the trailing four quarter average with a thick line.

The correlation is fairly evident. As iPod sales grew, penetration grew and “peak MP3″ was recorded in September 2010 while peak sales occurred at the end of that year.

It’s not a stretch to say that iPod touch sales are causal to MP3 penetration, especially since the iPod has remained the market share leader in the segment for a long time (at least 70% share) and that the iPod touch is consistently half or more of the iPod.

The absence of data for penetration beyond 2012 is therefore not a problem. We can assume that MP3 devices have a finite lifespan and, if not replaced, the penetration will decline.

I modeled both the increase and decline with a diffusion curve as follows:

Screen Shot 2014-05-19 at 5-19-7.02.40 PM

 

As longevity goes, this is quite generous but it’s safe to say that fewer than 10% of US households will have a dedicated MP3 player by the end of the decade.

MP3 players turn out to be a “ballistic technology”. Their failure is two fold: first, they did not reach saturation, gaining popularity with only half of US households; second, they were substituted and thus went out of use. Note that I kept the graph’s upper bound at 90%, suggesting the limitation of the device popularity.

There are many technologies which are in this state: camcorders, pagers, VCRs, game consoles.

On the other hand there are some technologies which prove to be both ubiquitous and resilient. I call these “perpetual technologies”. Substitution may occur but it may take decades. Examples are stoves, autos, microwave ovens, refrigerators, radios, vacuum cleaners, TV, telephones (fixed wire and cellular).

Yet another category exists where the technology does not quite reach ubiquity but is common enough that it’s refused by only about 20% of the population. I call these “Inertial technologies”. They also have relatively long periods of slower growth and similar lengths of decline, sometimes substituted by services rather than equivalent objects. The Examples are washing machines, the Internet, personal computers.

Some technologies never reach mainstream use (below 10% penetration). I call these “dud technologies”. These failures are very common and can be discerned easily. Examples include the Segway, Google Glass, SPOT watches, PDAs.

So to summarize:

  • Dud technologies: Never reach 10% penetration, are money losers, do not create an industry.
  • Ballistic technologies: Reach between 30% and 70% penetration but are substituted quickly. They are profitable but only for the duration of their ascent. Generally do not create industries, ecosystems or network effects.
  • Inertial technologies: Have steady growth but never reach ubiquity. They are bound by frictions which impede their broad adoption but also impede their substitution. They do create industries and network effects but suffer from corrosion and monopoly.
  • Perpetual technologies: They reach ubiquity, usually quickly and remain there indefinitely. Substituted only by improvements which supersede performance (e.g. Color TV vs. B&W TV). Usually solve a universal problem everybody has. Create disruptive growth and have world-changing effects.

Knowing in advance which category a technology will reach can be very valuable. Not only can investment be directed, but career decisions, education choices and fundamental research can be better allocated.

The question is therefore how to tell early enough where an emergent technology fits in this categorization.

I’ll be discussing a methodology for doing this, the processes for creation and covering at least twenty case studies at the Postmodern Computing Summit in June in San Francisco.

 

  • DrewBear2

    Excellent article. Will any part of the summit be recorded (audio or video) and be made available to the general public?

    • http://www.asymco.com Horace Dediu

      No plans for this. The discussion will be off-the-record.

  • stefnagel

    Sweet.

  • WFA67

    Thanks for this set of distinctions, Horace.

    My broker says that it’s still to be determined if Tim Cook can come up with (what you would call) perpetual technologies — as opposed to Apple becoming merely an “upgrade company.” If Tim’s just a great administrator, not the visionary required for the kind of company that Apple is, then without whiz-bang new products arriving — and despite the company’s cash, buybacks, and splits — the Street will hammer the stock.

    • normm

      Why does Tim need to be the visionary? Doesn’t he just have to recognize people with vision, and support them?

      • WFA67

        I would hope (and I imagine) that he knows himself well enough to do as you say.

      • JohnDoey

        Ask your broker if there is a product visionary in any company anywhere that Apple should trade Jony Ives for. And I say that as someone who viscerally hates iOS 7’s total lack of art and delight. I can still recognize that he lead the team that created multi-touch and Unibody and lots more.

        The A7 is 12–24 months ahead of all of its competition. Whoever is leading that is a visionary. They continually put in about 10x the GPU of everyone else and the software developers use it all up right away.

        A 100% green energy data center is visionary.

        iBeacon is visionary, and may well be looked at as a peer to iPad, iPhone, and iPod within a couple more years. iPhone was laughed at for its first few years — the introduction was seen as visionary only in retrospect by most observers.

        If the Beats Music purchase is real, Jimmy Iovine and Andre Young are as visionary as you can get for music. They have been working towards the HD music era for some time now.

        Tim Cook himself is an operations visionary, and that should not be under-appreciated when you have to scale to billions of consumer products. By all the typical CEO metrics, he has excelled as CEO as well.

        Angela Arrendts is said to be a retail visionary who will likely unite the separate online/retail stores.

        Where is the lack of visionaries at Apple? Where are the other companies with so many visionaries?

    • obarthelemy

      Historically, Apple have been great at tweaking existing technologies to make them easier to use and more socially desirable, be they computers, MP3 players, tablets, smartphones…
      I’ve been racking my brain trying to come up with stuff that is still nerdy but ready to go mainstream; the best I can find is
      1- home servers. Many people need/want local copies of their files, because their Internet is unreliable, slow, metered… and need backups, and cloud sync for some content. There’s need for an intermediate step between a computer and the cloud, but that needs to be transparent and easy.
      2- A/V equipment (including TVs, cable boxes…). Operating even a basic cable box+VCR+home theater combo is a pain, adding a smart TV to that is even worse. Apple might have concluded that cable companies will never let them take ownership of customers the way carriers let them, though, so the user experience can never be Apple-ized.
      I’d be very surprised if smart glasses or watches are it.

      • JohnDoey

        Mac mini is already a home server , but most users prefer iCloud.

      • Space Gorilla

        Both of these fall into what I call the Apple Network of Things, which I’m fairly sure is coming at some point in the next couple years.

    • http://www.asymco.com Horace Dediu

      I would not use a broker as a source of insight on this.

      • Walt French

        more specifically, a broker who makes such self-important oracular pronouncements of impending doom, about the World’s Most Successful Company® as run by a team led by experts such as Mr. Cook.

      • Space Gorilla

        The broker our family bought Apple shares through advised us to sell when it hit $300. He said “Apple has had a nice run but you better sell now before they crash.” I told him to stuff it. We bought a crapload at $100-ish a few years back, 2008 or something like that, whenever they were just under $100 and by the time we bought they were right around $100.

    • Sacto_Joe

      I don’t think your broker “gets it”. The “perpetual technology” in Apple’s case is the computer-centric device, and like the car or the wheelbarrow, it’s already here. From that point of view, the personal computer, the Macintosh, the iPod, the iPhone, the iTunes and App stores – they’re all “upgrades”.

    • http://search.websonar.com:8080/ Duane Bemister

      Does your broker know about the “missing memo”?…

      T re: S&G
      Forget litigation, doesn’t work. Go TM with a one two punch. Get rid of Fremium apps, no advertising or data collection allowed and sell our iPads and iPhones at cost. We don’t need any more profit. Bozos will bail and True Believers will win.
      S

  • Walt French

    Pulling back a few thousand feet higher, many of these “industries” are merely the matchup of technology with a deeper need. Music, for example, has been of significant interest to maybe ¾ of the population — enough to play it on FM, on an iPod or whatever — but we keep finding new ways to enjoy it as either a personal pleasure or as a badge of our membership in an affinity group.

    As a guess, the decline in MP3s has come because they brought more choice than was possible on radio and other alternatives, but they also take more energy and expense to maintain one’s personal collection; better to have a Pandora or other recommend new music to expand experience — at least at the margins.

    • Farshad Nayeri

      Part of how disruptive technologies succeed is to turn non-consumers into consumers, much of the time by resetting (read: lowering) performance expectations in unexpected way. I can’t imagine owning LPs, didn’t have much of a CD collection but I definitely used my iPod quite a lot.

      Decline of MP3 players were due to the rise of the smartphones, that subsumed their function, quite directly, no? Remember Jobs’s iPhone keynote? Music streaming Apps came later…

      • Walt French

        A larger fraction of the US has a smartphone than EVER had an iPod…heck, a larger fraction has iPhones, so music sales ought to be way up if your point were the most significant one at play.

        Perhaps people are playing games instead of listening to music. Watching videos or streaming music. Playing music videos on YouTube.

        But music sales are sliding. My guess is that the thrill of having 16,000 tracks (as I do) just doesn’t seem so important any more; whereas using music to tie in with friends or feeling like you’re part of a group, is.

        But no way I’m going to NOT rip the CD that a friend loaned me last night, nor the new album from a band I’ve heard of for years, but never managed to get to one of their shows.

      • Glaurung-Quena

        “But music sales are sliding. My guess is that the thrill of having
        16,000 tracks (as I do) just doesn’t seem so important any more; whereas
        using music to tie in with friends or feeling like you’re part of a
        group, is.”

        MP3s are a digital version of just one way of listening to music. If we go back to before the digital era, some people got by with music on the radio and rarely if ever bought albums. Others bought lots of music but they listened to it at home, and never bought a walkman.

        When digital music came along, it replaced one and a half ways of
        enjoying music: the walkman (pretty much killed by the mp3 player) and
        (partially) the stereo (only kind of replaced by itunes). It’s taken ten
        plus years (mostly due to music industry foot dragging) for there to be
        anything like a replacement for the radio.

        The craving for music is pretty powerful, but also very individual. If the technology or the legal system doesn’t allow people to enjoy music how and where they want, they’ll settle for something not quite to their taste, but only until something better comes along. (CF the wikipedia entry for Highway Hi-Fi)

        So basically I see the sudden rise of streaming radio and the accompanying decline of music sales not as the death of the MP3, but rather as the result of pent-up demand – people who once would have been radio listeners (but no longer due to radio becoming a homogeneous corporate wasteland) now happily switching from mp3 purchases to Spotify, etc.

      • Walt French

        Music is very individual but it is also very social. I’ll guess more likely that you “choose” your music more based on your friends’ choices, than you choose your friends based on your music preferences.

        That’s the limitation of the current Apple-centric music business: it leaves out discovery and sharing. I depend on radio (KCSM being one of the nation’s top jazz stations) and friends’ recommendations. (I’m right now listening to a mashup of Gabon rhythms and JS Bach [!] that I was loaned yesterday).

        Meanwhile, a couple of “emerging trends” are anything but. Per Wikipedia, Sirius/XM has picked up perhaps twice as many subscribers for its “streaming” services as Pandora has active users, since starting over a decade ago; it’s now rather profitable. Many listeners use it not for their commute radios but over the internet where we listen exclusively to a couple of music channels.

        There’s a place for ad-supported music but people who care enough about their music, and have enough income to afford pricey phones and data plans, are not the likeliest ones to plow thru enough ads for Pandora et al to ever be profitable. Paid music, whether downloaded or subscription-based, is going to be an important part of the mix until bandwidth, DJ’ing/curation and promotion costs all shrink sharply.

    • JohnDoey

      I think it is just that “smart radio” (Pandora, iTunes Radio, Beats Music) is just newer than MP3/MP4 and the audio quality is about the same. When iTunes downloads become “HD” (24/96 instead of the 16/44 of CD/MP3) that will give listeners a reason to collect/download music again because the files are much bigger and much, much better sounding. Over time, we will likely see most listeners revert to the traditional discovery of new music in low-quality (radio) and collecting of music in high-quality (LP/CD/HD.)

      Right now, listeners are still using analog headphones/speakers and 16/44 audio like it is 1985. As great as streaming is for discovery, HD audio will be for collecting. And listeners do tend to fall in love with a subset of their radio listening and hearing that subset in HD is truly a different experience.

      For the past 20 years, music has been recorded in HD, and iTunes has been collecting HD from producers for the last 5 years or so. It is astonishingly better to hear the music in HD. You’ll hear things you never heard before in music you have loved for years. The bass can be felt in the internal organs. The harmonics make you think the band is in the room with you.

      So these things go in cycles. LP sales dipped after AM/FM got better sound, but later CD eclipsed LP by a wide margin because it offered such a better experience. iTunes desperately needs to go HD right now. Buying Beats may be a key part of that, because Jimmy Iovine and Andre Young are two of the leading proponents of HD audio and have the music industry contacts to further it along if working with Apple’s customer list, ability to scale the cloud, and client hardware design.

      • discernible

        Except this HD music has been proven time and time again to be no discernible improvement over CD quality audio. The differences come solely from different mastering for releases.

      • Sacto_Joe

        I may have missed something, but he’s not comparing digital to CD; he’s comparing digital to digital.

      • discernible

        CD quality audio is a shorthand for 16-bit/44kHz sampling, vs the 24-bit/96kHz “high definition” sampling mentioned in the post. And CDs are digital.

      • Sacto_Joe

        CD is shorthand for “compact disc”.

      • discernible

        I have no idea why you replied with that. Of course it is, but it isn’t a relevant fact in this discussion.

      • Sacto_Joe

        I’m saying you confused the discussion with the original statement. I’m glad you clarified, but it would have been better to have made your clarifying statement from the get-go.

      • discernible

        I clarified it when you asked about it. I apologise for not being prescient and somehow predicting you would be confused ahead of time.

        Perhaps do an internet search for “CD quality audio” if you’re not familiar with a standard term. I did not invent it and the post I was replying to contained the sentence “24/96 instead of the 16/44 of CD/MP3” which should have made it clear. I don’t think it’s fair to say that I “confused the discussion”; in my opinion you are responsible for your confusion here, and I was happy to explain things to you in my first reply.

      • Sacto_Joe

        Have you DONE a search under “cd quality audio”? Guess what? Your definition doesn’t pop to the top of the stack. Not even close.

      • discernible

        Quote from the Google search results descriptions from the first page of results: “CD-R and CD-RW discs can hold up to 80 minutes of CD quality audio (44.1 Khz, 16 bit)”.

        I mean, not to mention that the first result is the Wikipedia page for “Compact Disc” and “Compact Disc Digital Audio”, either of which will tell you that the audio is “2-channel signed 16-bit Linear PCM sampled at 44,100 Hz”.

        Honestly I’m just kind of confused by this discussion. Is it not obvious that “CD quality audio” is audio at the same quality as on an audio CD?

      • Sacto_Joe

        Sure, I’m being picky. But words are important. And the first Wikipedia page is not “cd quality audio” but “compact disc”, as you yourself point out.

        Here are the first two articles other than Wikipedia that turned up:

        http://www.lincomatic.com/mp3/mp3quality.html

        http://keithstead.com/and_more/cd_vs_mp3.html

        Neither of them talks specifically about “HD” versus “MP3″, which was the subject you originally replied to.

      • discernible

        Does “CD quality audio” mean something else to you than “audio at the same quality as on an audio CD”? If not, then the result for compact disc will happily tell you the technical details of the CD audio format, as I pointed out.

        I still don’t understand what you are doing here. Even if you believe I wasn’t clear, I happily explained it to you in my first reply.

        And no, the subject of the post I replied to was not “HD” vs “MP3”. It was clearly about sample rate and bits per sample. See, again, “When iTunes downloads become “HD” (24/96 instead of the 16/44 of CD/MP3)”.

      • Sacto_Joe

        “And no, the subject of the post I replied to was not “HD” vs “MP3”. It was clearly about sample rate and bits per sample. See, again, “When iTunes downloads become “HD” (24/96 instead of the 16/44 of CD/MP3)”.”

        No. The original discussion was, as I said, MP3 vs HD.

        Walt French said “As a guess, the decline in MP3s has come because they brought more choice than was possible on radio and other alternatives…”.
        That was then countered by JohnDoey who posited that …’HD audio will be for collecting”.

        Now, I don’t know if you or JohnDoey are right about HD being – or not being – significantly different from MP3s, but let’s at least agree that that’s what the discussion was originally about.

      • discernible

        I was replying to John Doey, not Walt French, yes. Sorry if Disqus threading is broken on your end and you can’t tell that.

      • Walt French

        You’re making some generous guesses. As a former broadcast engineer who also designed & built his own gear, a lot of it makes no sense. Let’s wait to see what he really meant?

      • Walt French

        “Right now, listeners are still using analog headphones/speakers and 16/44 audio like it is 1985.…It is astonishingly better to hear the music in HD. You’ll hear things you never heard before in music you have loved for years. The bass can be felt in the internal organs.”

        Damn, I didn’t get the memo that the Big Deal about Beats is that they went all-digital with their headphones (apparently at about the same time that the speaker manufacturers did).

        Could you go thru your old inbox & forward it to me?

        Also, I’m totally perplexed about the source of the claim that HD digital audio delivers much stronger bass sounds. The 44kHz rate takes approximately 15,000 independent waveform samples at the lowest frequencies that most audiophile sub-woofers aim for, and even more at the tactile (not really audible) frequencies that some movies and games aim for. Net-net, there’s much less distortion or inaccuracy in that (1980!) Red Book Standard CD, than any louspeaker can hope to deliver at any volume. (If you wonder why bass so often sounds thumpy as opposed to musical, consider that odd harmonics may be 1% or more of subwoofers’ output at high volumes.)

        Further, while I’m sure you’re aware of a robust argument regarding whether high-bit-rate audio’s improvements can be heard, yours is the first mention I’ve seen touching on bass frequencies. Perhaps you also have some information about how Beats customers, who I could be convinced are fans of bass-heavy sound, have actually been expressing an interest in high-precision reproduction that reports show is barely detectable by trained ears in laboratory situations.

        Much obliged, pardner.

      • charly

        Why is streaming HD music a problem (especially if you can use cache) HD music is smaller per second than even crappy video

  • http://www.collideconsult.com/ Ed Dietrich

    I’d like to see a historical penetration analysis of technologies on a “jobs to do” basis. To see the development and time horizon of successive waves of technologies (phonograph, cassette tape, CD, MP3, etc.) would be valuable.

    • http://www.asymco.com Horace Dediu

      This is part of the presentation at the event.

  • NostrilDamus

    You are already calling Glass a dud technology, despite the fact that it’s in the explorer phase ? In the words of Scott Adams, that either makes you a genius or an idiot who thinks he is a genius. Good luck sorting that out !

    • Farshad Nayeri

      To get an idea of the scale of what it takes to graduate to ubiquity, after 7 or so generations of video games within 40 years, it’s still around 50% penetration in the US.

      • JohnDoey

        Is it that high? I thought video game consoles were lower numbers than that.

      • Farshad Nayeri
      • http://www.asymco.com Horace Dediu

        My data is from Pew. ESA may be higher but I would suspect it more.

      • Walt French

        “ The report, which is based on survey data collected from more than “2,000 nationally representative households” during the spring of 2012, states that 49% of American households own a dedicated videogame console, with an average of two consoles per gaming household.”

        OK, half of households times two per, meaning an average of one per US household. Approximately 115 million in 2012, per the Census Bureau. Whereas GeekWire estimates worldwide sales of the current top 3 at maybe 30mm in the latest year, down from previous years.

        Sure suggests to me that the “two per household” means an old NES in the basement, (and so, totally irrelevant to anything) and a very low penetration outside of the US. Either two-year-old devices are perfectly satisfactory as a new one, or the older devices are not being replaced.

        It all is quite consistent with a technology that has reached its maximum popularity, as developer attention and household budgets are re-targeted towards smartphones, tablets or other activities.

      • obarthelemy

        Or living-room + mobile.

      • Walt French

        There’s some possibility I confused the categories, but I seem to recall mobile consoles as being lumped in with tablets and phones.

        Mobile game devices seem the most at-risk from multi-function devices: I’d think you have to be a very games-centric user to appreciate the modest cost savings of a game device over a smartphone that likely has more processing power and superior display.

      • twilightmoon

        Plus dramatically cheaper per title costs.

      • charly

        That includes the wii in the attic and cheap Chinese junk. (and ancient systems). The percentage of households with a Xbox 360 , One, Playstation 3 or 4 is the real question.

      • http://www.asymco.com Horace Dediu

        Latest data point is 43% in January 2013 in the US. Globally the figure is probably much lower, below 10% would be my guess.

    • JohnDoey

      It doesn’t take a genius or psychic to look at Google’s own goals for Glass during its Explorer stage and see that none were met. There was no developer rush, no killer app, users stop wearing them pretty quickly in almost all cases (even Sergey,) and they caused a social backlash that has varied from ugly to really ugly, and which may have damaged the Google brand.

      • obarthelemy

        I found what happened with Glass very interesting:

        1- strong backlash vs camera, that I don’t even see as a key feature. I’d be happy to just have a floating manual, map, magazine,… that I can navigate w/ voice and a couple buttons while doing something else

        2- mostly high-end, pro, uses. Well, at that price… It apparently costs $125 to make, so a mass-market version should easily go for $200-$250. Dangerously close to impulse-buy prices.

        3- no real backlash about screen quality, eye strain… which I really expected.

        I think Glass falls into the “too early” category, If I had to choose between glasses or a watch, I’d take the glasses.

      • arrow2010

        Yet Google has risen to the most valuable brand in the world, despite the so-called failure of Glass.

      • relation

        Why do you think these two things are at all related? Why have you put them together into one sentence?

      • twilightmoon

        Google is the #1 search engine and I suspect that is related to their “brand value” I am not sure I entirely trust the brand value ascribed to Google as accurate, but maybe I’m a bit cynical.

        There’s some evidence Google’s algorithms may have been monkeying around with Apple’s company image by pushing forward negative articles on Apple and burying positive articles. I won’t say that there was a conscious effort to do so, but I do not trust Google so I won’t rule it out.

    • http://www.asymco.com Horace Dediu

      That’s the point of the methodology. Calling technology success and failure early is the purpose of categorization.

  • obarthelemy

    I’m a bit unsure about several things:

    1- the “technology” terminology . What if a technology goes from being embodied by a standalone product to being subsumed into “wider” products, the way MP3 players and PDAs are now into our phones ? Standalone products are fading, but those *technologies* are more mainstream than ever.

    2- the assertion that declining markets are not profitable. There can be a cash-cow phase, with little investment required and still relevant sales, especially when other players exit the market (as happened for MP3 players even during the ascent phase). I’m sure Apple are still making a mint on iPods.

    3- More generally, plenty of non-mainstream markets are highly profitable. I’m sure we can find examples even in the Tech world. Ruggedized gear ? True-color screens ? Firewire then Lightining paraphernalia ?

    In any case, the challenge certainly is to create or disrupt “perpetual markets”. Phones, cars, medicine/health and clothing seem good candidates.

    • Farshad Nayeri

      Perhaps a better way to say it is profitable “at large” or “at scale”. My son’s lemonade stand is profitable and likely is the market for selling old VAX/VMS systems, but not the right kinds of markets for large pools of money.

    • El Aura

      Did phones by becoming smart substitute MP3 players or did MP3 players by gaining communication capabilities substitute cell phones?

      • charly

        It is not smart phones that substituted mp3 players but feature phones that did that. Maybe you can even claim dumb phones did that. Besides the ringtone era was before the mp3 era in my recollection and even the cheapest Samsung 5 years ago (think $15) had a mp3 player (and 1 meg of storage which made me smile)

  • http://www.breaktap.com BlairMacGregor

    I think the obvious candidate for the next ballistic technology (that ultimately gets revealed as such) is the health wearables category. Fitbit, Jawbone etc. will likely survive as companies but like the Garmins of the world during the fall of the navigation-specific hardware market, they will increasingly have to turn towards building software, as the features of health wearables get increasingly baked into today’s smartphones.

    • charly

      Health wearables is a 10% market. Think of the percentage of Americans that regular exercise and than subtract those that know they do way to liitle

  • http://ValuingDisruption.com/ Bill Esbenshade

    Great post Horace, and I think very valuable in determining when it makes sense for a company to enter a new product category or adopt a new business model. It made me think of Beats Music streaming. I think music streaming is going to become the ubiquitous, perpetual technology for music distribution (replacing technologies and business models like iTunes). Viewed from this perspective, it’s easier to understand why Apple is interested in acquiring Beats.

    • charly

      Streaming only works if your streaming method works on devices made by other makers. I don’t see Apple being successful in this

      • Kizedek

        Well, as Horace has repeatedly pointed out, what is merely a hobby or value-add for Apple’s devices should rightly be considered “successful” in its own right when compared to anything else from other companies, even if it is not “successful” when compared to the likes of the iPhone.

        Secondly, Apple is likely not interested in making whatever services and products they come up with “successful” horizontally — never has been. As long Apple’s efforts are successful vertically, as usual.

        Right now, PC users can use iTunes and buy songs from iTunes, for use on their PCs, iPods or iPhones — if they so desire. I presume they can also stream iTunes Radio — again, if they so desire. But, that isn’t Apple’s focus.

        Perhaps Apple will start some kind of streaming service alongside iTunes Match. I could see many of the almost 1B iOS users paying for such a service. It might even sell more Apple devices to those who haven’t yet taken the plunge …but that wouldn’t be a measure of “success” in your book, nor make an Apple streaming service “successful”, would it?

      • Walt French

        @charly wrote, “Streaming only works if your streaming method works on devices made by other makers.”

        Source, please. Google, Amazon and others need something more concrete to argue against.

      • charly

        I believe that Apple will drag its feet in supporting Android and Windows PC and wont support the less systems. It doesn’t matter if it is true but Amazon and Google (& many others) will use this FUD and it will stick because most people will believe it if they assume it not already.

      • twilightmoon

        Apple has no reason to support Android, and they already support the PC with iTunes, so I have no clue why you would claim that they would “drag their feet” to support something that they already support.

        Unless you have some reason to believe that the streaming service will be somehow massively more profitable than their existing iTunes business which is already a multiple billions of dollars per year business in terms of profit, then there’s zero incentive for Apple to go to the trouble of creating a streaming service which helps promote Android which is the largest competitor for dollars that Apple wants for themselves.

        EDIT: Even more to the point, the streaming service would have to be profitable on the scale of the iPhone/iPad to merit developing it on Android. I cannot imagine how you could make the argument that is even possible.

      • Mark Jones

        If the streaming is monetized through ads, then maybe yes, since ad-serving needs a large base to be effective and profitable.
        If the streaming learns primarily through analyzing user choices, then yes. But if the streaming is primarily by expert curation, then no.

      • charly

        I don’t see curation as a selling feature. Depth of library and price are features people will use in buying streaming services. Curation is a feature that interacts with use but its usefulness for the streaming industry is mainly due to the steering of people to the cheapest music (or the one with the most payola for the boss)

      • Mark Jones

        Staying on the subject of your original comment, depth of library and price don’t require that a streaming method works on devices made by other makers. So Apple certainly could be successful at this.

        Expert curation, or curation by experts, is not a feature that interacts with use, for if it did interact with use, then why would anyone need the experts. Curation by experts, if done right, is very much a selling feature.

    • obarthelemy

      I’m old enough to have known LPs, but mostly cassette tapes in my early teens. I don’t know if it’s an age thing or a generational thing, but I’m unconvinced by streaming:
      1- it ends up being a more expensive.
      2- the minute you unsubscribe, you’re music-less
      3- already when I ripped my CDs , I found myself listening to less music. Something about physically handling an object, visual cues from packaging…
      4- it’s unavailable when you’re out of range, which is when you most need entertainment: train, plane, trek…
      5- I’ve got my own mood/genre playlists, and I don’t even use them that much, I look for the next rack I want.
      6- Discovery based on my likes would indeed be nice. I’ve been underwhelmed by Amazon’s book recommendations (much work to tag books you like, even more work to tag books you already have), hopefully they’ll get Music this time ?

      I think the success of streaming is due in good part by the economic model being broken: artists getting ripped off (pun !), and teens having no sense of over-time costs, but a great need for today’s flash hit.

      • http://ValuingDisruption.com/ Bill Esbenshade

        Am pretty into music and just recently signed up for Beats Music. Discovery is excellent and you can create a library and playlists. You can also make any songs you want available offline. I’ve used iTunes since inception, and have several hundred CDs, but I won’t be using them any more, at least for stuff I gather going forward. No more need to import CDs and wait for iTunes Match to propagate the import. Beats Music is a lot easier, faster, more convenient.

      • charly

        Discovery is with Amazon reasonable aligned. I want to read a book and they want to sell a book but i only buy a book if i really think i will like it and that is not even a money question but a time question.

        With streaming people want to listen to music but the streaming companies want to sale subscriptions. For that they need to be good enough but it is more profitable to have customers that don’t listen to much and the cheaper stuff. So expect out of copyright classical music to be recommended often. Or 5 minute songs instead of punk song that last 88 seconds

  • charly

    Ipod touch mp3 players are death but “Nike” exercise mp3 players aren’t

  • neutrino23

    I wonder if traditional radio is not fading away? I’ve noticed that no one in the family listens to radio any more except in the car. We either stream live programs or listen to podcasts or recorded music. This has happened in the last year or so. I think we only have one radio left in the house and that one is part of a console used to play music from the iOS devices.

  • Walt French

    To the question of game consoles’ penetration (and similar to the extreme skew I noted in TV watching), yesterday I dug up this little tidbit:

    There are 34 million core gamers in the U.S. spending an average of 22 hours per week playing video games, according to Core Gaming 2014, the latest report from global information company, The NPD Group.

    Another survey estimates half of US households have a game console; that suggests only half again as many gamers who spend fewer than 5 hours/week—most players are hard-core and there are some also-played types. It stands to reason that a person wouldn’t be very proficient, and not enjoy playing much, if he only spent an hour or two per week. (This is correlation thinking; the causality could work both ways.)

    Possibly those intense gamers are doing it in addition to an ordinary full-time job, which means essentially all one’s waking hours consumed in work, gaming and ordinary eating, showering and commuting. But more likely, all that gaming is in place of, if not exactly a substitute for, work.

    That means console-type gaming simply cannot achieve a significantly higher penetration. It also means that consoles are likely to stay high-priced, because cutting the price is unlikely to reach a larger market. I think the technology is challenging enough that consoles won’t fade the way we see standalone MP3 players drying up—music play requires very few specialized design resources in a smartphone—but that game producers will aim to convert people who game less than an hour a day to smartphones, a platform on which they can sell many more titles.

    • charly

      How many hours do people waste with TV or browsing?

      The smartphone/tablet will do a reverse WiiU. Instead of a smart TV/console combo with a dumb tablet it will be a dumb “smartTV” with a smart tablet. Think PS vita TV but with your phone instead of a PS4

      Besides the Ouya was already powered by a tablet chip.

  • RichardinMelbourne

    The iPhone/smartphone is an MP3 player.