Last week Apple and Microsoft released their fourth quarter MP3 player sales figures, which Apple chooses to call its first quarter for some odd reason, and the numbers were a startling contrast. On one hand you had Microsoft with a 54 percent drop off in sales from the fourth quarter last year. On the other, you had Apple, selling a record number of iPods (again).
Somewhere Steve Ballmer must be banging his head against a wall wondering if his company will ever catch a break, while Steve Jobs convalesces contentedly knowing his company continues to grow in spite of economic conditions that would suggest that people would stop buying expensive little gadgets.
Microsoft Zunes Out
I have to admit I've never been a fan of the Zune design--just looks clunky to me--but I've read reviews and I know it has some interesting features, particularly its integration with the popular XBox 360. But Microsoft had to be flinching when it learned that Zune sales had dropped off the charts in the fourth quarter of 2008 losing more than half of its previous year fourth quarter sales. According to this article on New Media Update that translates into $100M in less revenue. That doesn't bode well for the device itself and could suggest that Microsoft will be getting out of the MP3 device business very soon.
Apple Takes Off
Apple, meanwhile continues to do what Apple does and that's make money hand over fist, economy be damned. Macworld reports that Apple sold 22.7 million ipods for the quarter, which translates into growth of 3 percent over last year, which itself was a record sales quarter. It wasn't all glowing as Macworld points out, since last year's sales increased 5 percent, but given economic conditions, and compared to Microsoft's sales, I'm sure Apple will take it and say 'thank you very much.'
What's more iPod has a lock on MP3 player market share. According to Macworld it breaks down as follows:
"Oppenheimer said that Apple enjoyed a market share topping 70 percent for MP3 players in December, according to figures from NPD Group. He also noted gains in international markets where the iPod market share exceeds 70 percent in the United Kingdom and Australia, 60 percent in Japan, and 50 percent in Canada. The iPod saw year-over-year gains in France, Germany, Italy, and Spain, as well."
And it wasn't just MP3 players that did well, overall Apple made more than $10B for the quarter, topping 10B for the first time ever for a quarterly sales number, and this in the midst of the worst economic crisis in 50 years. Remarkable.
Analyst Are Wrong
Many analysts predicted that iPod sales would slide, partly because of iPhone sales (which includes iPod functionality) and partly because of economic conditions, but it hasn't happened as sales continue an upward trend in a variety of markets across the globe. Meanwhile Ed Oswald writes in the Technologizer blog that Microsoft insists the Zune is just fine, but numbers clearly don't lie, and what we have here is a clear contrast between two rival companies heading in opposite directions.