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Apple's iTunes May Drive Home Media Networking
Jul 27, 2006
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Apple's iTunes service might have the potential to outstrip the company's significant iPod business, giving it an opening to home audio and video markets ahead of its competitors. These are findings reported in a new global study from ABI Research, Home and Portable Audio Device Markets, which focuses on home audio and portable devices and particularly on growing audio device categories like multi-room audio systems, high-end AV receivers and iPod accessories within the home.

iPod's growth continues to surprise analysts and Apple said last week that shipments were up 39 percent in the third quarter of its fiscal year. iPod accessory sales from Apple, Bose, JVC, and others are growing as well.

These accessories include high-quality home docking stations for home audio.

"The battle for portable devices has already been won by iPod (unless Microsoft's strategy for its Zune platform succeeds) but in the home and mobile markets, the prize is still up for grabs," commented Research Director Vamsi Sistla. "iTunes could be a Trojan Horse through which Apple can enter the home market sooner than the competition."

The Key: Consumers Want Media Connectivity at Home
ABI Research identifies the key to this opportunity as consumers' growing interest in digital media connectivity in the home.

"I think we will soon see more line-powered consumer audio devices - high-end audio devices with AV receivers, and multi-room audio systems - adding support for iTunes to their current support for iPod," Sistla said.

More than 1 billion files have been downloaded from iTunes, and a significant portion of the audio and video content on computers worldwide is organized by iTunes client software. ABI says leveraging that content - which users have already paid for and want to hear on a good home audio system or watch on a digital-ready TV - creates a substantial opportunity for consumer electronics vendors.

That opportunity could come via standard home computers or through dedicated media center PCs. Apple offers this in the combination of its Mac Mini and Front Row networking software. Now, Sistla said, "The field is wide open for PC manufacturers and other vendors of home CE systems to capitalize on what should be a large and dynamic market."

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