John Archambault: Digitalist
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July 27, 2007 Digg | del.icio.us | Facebook | newsvine | Reddit
SIRIUS Could Challenge iPod Dominance
The other day I was walking down the hall and saw my colleague Ron putting on his headphones. As he had been listening to CDs on a portable device for the longest time, I asked if he had finally got an iPod for himself. That's when he showed me his SIRIUS Stiletto.

The first thing I noticed was the familiar "click wheel" navigation device that Apple pioneered, making the Stiletto easy to navigate. I was unfamiliar with the SIRIUS business model, so I asked about it and was told that aside from being able to listen to an extensive array of radio stations, a user can save songs heard on the SIRIUS network to their Stiletto - a great idea for those times when you are out of wifi/satellite range, like on a subway train. You can also load music files from your own collection onto the device. So essentially, a SIRIUS subscriber gets a portable music player for $250 and an unlimited amount of music for $13 per month. Compare this to an 80 GB iPod that costs $350, plus the cost of buying and downloading music.

For the first time, I think I've seen a device that can challenge the iPod/iTunes model. The question is: what will Steve Jobs do about it?

As a user, I would definitely prefer to keep my iPod; as a piece of hardware, it's a better device. But as a music fan, I've lost the splendid spontaneity of discovering new music via the radio, and I want it back. I could be tempted to make the switch to SIRIUS for just this reason.

Right now, Apple has nothing to worry about; SIRIUS would need a huge influx of subscribers to chop into Apple's lead. But this could happen, unless Apple can proactively do something about it.

To this observer, the challenge is similar to what Apple faced in the 80's when it dominated the home computer market. Back then, Apple wouldn't modify its business model - they refused to let their products work with products from other companies, and eventually, it cost them everything. I'd love to see Steve Jobs create an iPod that does all the same things as the Stiletto, and the easiest way to do this would be through cooperation with SIRIUS. But what are the odds he would ever do this? If he tries to compete directly against SIRIUS, will he succeed?

I hope he's learned his lesson.