Analysis: Steve Jobs Raises the Bar in the Digital Music Market

Authored by Jay Baage on September 5, 2007 - 9:06am.

Apple CEO Steve Jobs just announced a new "iPod Touch” with a 3.5 inch widescreen, WiFi and touch-screen functionality at a product event in San Francisco. From now on, you can purchase and download content from iTunes straight from the device. And Jobs just dropped the price of the iPhone to $399 (instead of $599). With those moves, he makes fairly sure that Apple keeps its grip of the digital music market for the near future.

With increasing competition from mobile phone companies and consumer electronics manufacturers, as well as online music services, Steve Jobs steps up to the plate and delivers, again.

We were expecting a 3.5 inch widescreen touch-screen iPod, but that the new models will have WiFi and the ability to synk wirelessly with iTunes – wow. I don’t know about you, but Jobs just sold me on a new iPod right there.

And there is more. The new iPod is just just 8mm thick and has many of the same cool features as the iPhone (you can surf the web, watch YouTube videos, all with same flip, zoom and scroll functionality). And the least expensive 8GB model is “only” $299.

In fact, the company has refreshed its entire line of music players and also announced an interesting new partnership with Starbucks that you can read more about in the press release at the end of the article.

When it comes to the iPhone, Steve Jobs have come around and slashed the price. No longer do you have to spend half a G to get your hands on one. And Apple is back on trach to ship 1 million units by the end of September.

"We want to make the iPhone even more affordable" Jobs said at the event, announcing that the price of the model with 8 gigabytes of storage was cut to $399 from $599.

Microsoft Zune was quick to answer with a $50 price cut to $199 in an attempt to rev up sales of the device competing against Apple’s iPod. But really, if the first generation Zune players already were considered a flop, how unattractive do they look now?

If I look for negative points in today’s announcements from Apple - you can’t buy video content wirelessly via iTunes and there is still no subscription service or variable pricing available. Also, AT&T is still the only network you can use the iPhone on and many people have pointed out that AT&T’s network sucks.

However, overall Steve Jobs just raised the bar in the digital music market and it will be very interesting what companies such as Nokia, Microsoft and SonyEricsson can do to try to top this.

Joakim Baage

Press releases from Apple: