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Is Ipod Apple’s Quiet Monopoly

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Submitted By dipsen1981
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This paper is dedicated to Steve Jobs, one of the greatest inventors we had in modern times.
Is iPod Apple’s quiet monopoly

Prelude

Apple’s iPod a revolutionary portable media player was launched in 2001. Being a striking piece of innovation with no comparable substitutes at that time it had a roaring success in worldwide. Till today, the quarterly sales of iPod worldwide continue to vary between 9 and 10 million ( [ Figure 1 ]). Even after the introduction of Microsoft’s Zune digital media player in 2006 and the existing players produced by companies like Creative, Sony, Samsung etc, the Apple iPod continues to hold a market share of approximately 80%. In this sense, one can be tempted to conclude that iPod can be said to be in a monopoly position because of its well established market dominance. Consequently from our previous deduction we may also conclude that Apple's iTunes Store1 has a monopolistic lock on digital music. The purpose of this paper is to analyze about how much of the above conclusion is valid from an economic point of view.

Figure 1 iPod Sales Source: Wikipedia

[1] iTunes is a proprietary digital media player computer application, used for playing and organizing digital music and video files. It can connect to the iTunes Store to purchase and download music, music videos, television shows, games etc.
Is it truly a Monopoly?

Apple’s majority market share in the portable personal media player market and in legal downloads in the iTunes Store often becomes a matter of comparison with Microsoft’s monopoly position in the Personal Computer(PC) market in the 1990’s. However we should recall here that Microsoft was not judged as a Monopoly because of its majority market share. It was rather because of the inability which other players had to enter the PC market at that time. The underlying fact here was “Windows was not

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