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Innovation Management in the Mp3 Audio Player Industry

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Innovation Management in the Mp3 Audio Player Industry
INNOVATION MANAGEMENT IN THE MP3 AUDIO PLAYER INDUSTRY

8 August 2006
Erik Westerman Question 1

I have chosen the personal stereo industry (home entertainment sector) as a sector of interest. Portable audio products, starting with the cassette tape Walkman, and finishing with the MP3 player involve major innovations as the main reason why there has been such radical change over the last ten years.

The main leaders of today hardly resemble the top competitors 10 years ago. The leader of today 's market holds a powerful dominance over the competitors. In fact, only one name prevails in the personal stereo industry from the last two decades: Sony.

Sony 's success has been waning over the past five years as a result of the combined service that Apple 's iPod provides with iTunes software as well as iTunes online music shop. The ubiquity of the "i-brand" has been a curse for the other players in the personal stereo industry.

Following the success of Sony 's Walkman cassette tape player, competition rose between electronics giants as portable CD players become economically feasible to the mass market in the early 1990s. Media content systems, from magnetic tape to plastic have created new markets as Digital Audio Players (DAPs) have dominated near the end of this decade.

In the late 1990s, I.T. enthusiasts began to use audio compression formats to store music on their personal computers. Customisation of play lists and storage were not issue thanks to the compression methodologies used by the MPEG group, and in particular, the MP3 stood the test as a favourite among these early innovators.

Diamond Inc released the first portable mass market MP3 player, the Rio in Q4 1999 . Its success was limited as was its storage, but fortunately it tipped the scales of justice in the favour of DAPs following the RIAA (Recording Industry Association of America) case that legalised digital audio players based on the case of Sony Corp. of America v. Universal


Bibliography: Apple Takes A Big Bite , By: Leonard, Devin, Fortune, 00158259, 5/26/2003, Vol. 147, Issue 10 "28% of Americans have a digital music player" http://blogs.zdnet.com/ITFacts/?p=11305 Posted by ZDNet Research" 7/14/2006 "Inhibitors of disruptive innovation capability: a conceptual model" by Marnix Assink 2004,European Journal of Innovation Management Vol. 9 No. 2, 2006, pp. 215-233 Sony Fact Book, 2005, Sony Corporation Morita, Akio. Made in Japan (New York: Dutton, 1986) Japanese product development strategies by Laurence Jacobs & Paul Herbig USA JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 13 NO. 2 1998, pp. 132-154 © MCB UNIVERSITY PRESS, 0885-8624 Sony History Online - Sony Corporation http://www.sony.net/Fun/SH/1-21/h1.html 2006
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