Dell to Re-Enter iPod Arena – Blue Ocean Intentions, Red Ocean Waters

Dell’s MP3 Player
Recently, Dell has been testing a digital music player that ties to software for a range of portable PCs and lets users download and organize music and movies from various online sources.  According to the Wall Street Journal’s July 30th Market Section, the software would connect the device to an online subscription service that Dell expects to launch later this year.  The key advantage of Dell’s MP3 Player will be that it allows consumers to download songs and movies, and then move them between devices like PCs and cell-phones.  Apple’s digital music strategy doesn’t always allow this functionality.  Michael Dell is trying to move out of the Crimson Red Ocean of PCs into a broader range of consumer markets.  The problem is that he has picked an Ocean within this space which is also red, and not blue.

Apple Owns the MP3 Player Marketspace
Companies that dominate other arenas, such as Sony and Microsoft, have tried to move into the MP3 Player marketspace, and they have failed miserably here.  Quite simply, Apple owns this marketspace!  According to the industry analyst NPD Group, Apple owned 71% of the MP3 player market in the 1st quarter of 2008.  Its closest rival, SanDisk, had 11%, while software heavyweight Microsoft had a 4% market share with the Zune.  This is textbook domination and the type of market share I discuss in my forth-coming book, Owning Marketspace. 

Because Apple is so dominant in this market, even a peripheral attack is inherently a Red Ocean.  If Dell wants to think Blue Ocean via consumer markets, it should look elsewhere.  While the MP3 player market is a large and lucrative space, it’s maturing quickly and is blue only to Apple.  Moving into it and competing with Steve Jobs will require a massive amount of resources, especially in marketing – an area where Apple excels.

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Mike Bolden marketing expert and blue ocean strategist – writing to inform, enlighten, and inspire.  Author of forth coming book, “Owning Marketspace”.  Available for consulting and speaking engagements.
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