Inspiration: Insead.blog.edu: How the Apple iPod Broke all Sony’s Walkman Rules

Posted on 09/03/2012

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Ron Adner skriver på Insead.blog.edu:

Innovation Success: How the Apple iPod Broke all Sony’s Walkman Rules

In 1978, engineers at Sony successfully married a compact playback device with lightweight headphones to create the prototype for a product that would become a worldwide hit. In 1979, the ‘Walkman’ was introduced in the Japanese market, selling out its entire stock of 30,000 units within the first three months.

Sony kept apace with its rivals. For a decade after its launch, Sony’s Walkman retained a 50% market share in the U.S. (46% in Japan) in a space teeming with competitors, even as it enjoyed a price premium of approximately $20 over rival offers.

Jump ahead to the late 1990s, when the sun had set on cassettes as the favored music delivery format in favor of compact discs and, for the technologically savvy, digital mp3 files. But electronic firms around the globe were betting that the CD would soon follow the cassette into extinction. Which mp3 player would get there first and become the next ‘Walkman’?

In 1998, South Korea’s Saehan Information Systems created the first portable digital audio player, MPMan. It sold 50,000 players globally in its first year. By the launch of the iPod in 2001, there were approximately 50 portable mp3 players available in the U.S.–and no firm had achieved anywhere near the dominance that the Walkman had enjoyed 20 years earlier.

Compared to the Walkman and cassettes, the story was very different for mp3s. You couldn’t purchase them in traditional retail settings. Downloading an album–legally or not–could be a multi-hour affair. It didn’t matter that MPMan was first–it wouldn’t have mattered if they were 6th, 23rd, or 42nd. Without the widespread availability of mp3s and broadband, the value proposition could not come together.

The MP3 player market did eventually consolidate around a dominant product, Apple’s iPod. But the iPod, launched in late 2001– three years after the MPMan–was anything but a first mover. How can we understand the iPod’s success despite its delayed entry?

IPOD WINS … THREE YEARS LATE

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