iPod: Leader, but Not Ruler

Apple's digital-music player is a bona fide hit. But analysts' belief that it commands 25% of the global market may be overblown.

With iPod mania running full tilt, many people assume that Apple utterly dominates the markets for digital-music players. And that includes Apple itself. "In the biggest markets we're...40% to 50% of the market share of all MP3 players. That includes flash and hard-drive players," said Apple sales chief Phil Schiller during a May 14 Merrill Lynch conference call. He also claimed that iPod sales outstripped the combined sales of the competitors in second, third, fourth, and fifth place. "Our market share is tremendous," Schiller gushed.

Apple officials are careful to state that they're referring only to markets in the U.S., Japan, and Western Europe, where they believe they have good tracking data. Although no one monitors overall international numbers, most analysts have assumed Apple has well over 25% of worldwide digital-music player sales. They base that view on Apple's strength in those three key markets. Too bad their assumption is off base: The iPod's global market share may actually fall well below the 25% mark.

News source: BusinessWeek

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