Summary
The recent Apple announcements (iPod Nano video capability, iPod Touch Gaming and iTunes Enhancements) are evidence that any form of information moving across the Internet, be it videos, music or games, are just more types of media content for Apple to innovate with. Why do you need a special game console like the Sony PSP or Nintendo DS? Or a device designed for just taking video like the Cisco Flip? Apple is blending the multimedia experience into one device.
Analysis
Apple now offers over 21,000 different games and 75000 applications. All can be loaded on the same device, the iPod Touch. Listen to your music. Web access. Social networking. All for $199. Hmm...seems that my kids Sony PSP and Nintendo DS are running a little short of functionality.
So, what do these Apple announcements mean?
1) iPod Nano video capability - Just like the iPhone has virtually obliterated the old cell phone market, wrapping video capability into the new Nano will kill the stand alone video camera market for devices like the Cisco Flip camera. Why not carry a single device that does videos and music. Oh yeah, and stores a whole lot more for a lower price.
The Flip will not survive unless the price drops to $49 or less. And Cisco will never be able to duplicate the music availability and flexibility of iTunes. Enough said.
2) iPod Touch Gaming - Same again. Looming death for traditional devices dedicated to gaming like the PSP and DS. With the fabulous user interface and clarity of the iPod Touch, mobile Internet gaming will never be the same. And you get your portable web access as well.
Dedicated game consoles like the Microsoft xBox and the Nintendo Wii are probably next on the Apple target list. Why buy an xBox when a nice Netbook with the right software and external devices can deliver the same experience and give you a portable computer to boot. The Wii might last longer just because it is unique and probably has some patented technologies.
In short, Apple is converging all types of media: audio, video, games. And it is converging all types of services: browsing, communications, social networking. And it is doing it with Apple devices that have small footprints and proven technology. All with a staggering consumer acceptance rate.
How will Cisco, Sony, Nintendo, Microsoft and others respond? That answer is too long for this review...but, I will tell you that they better move fast.
David Croslin consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
