For Consumer Product Strategy Professionals

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	April 23, 2008 The Next Apple Music Device We Want To See by James L. McQuivey, Ph.D. with Michelle de Lussanet, Paul Jackson, Dan Wilkos

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Executive Summary

Rumors abound about which steps Apple will take next in its music business, but none of the rumors have so far hit on a significant opportunity that we see ahead of Apple: rebuilding the home audio market. Once a large, multifaceted industry, the home audio business has fragmented into a high-end component market and a cheap market for iPod docks. Apple has the opportunity to recreate a home audio market by introducing a new audio device that brings three of its unique skills to bear: 1) an elegant touch interface; 2) simple networking; and 3) music content management and playback. With this new device, Apple could reach 15 million US homes in three years, which would not only solidify its position in the audio world but would establish a new platform for innovative music promotion and playback. Competitors would benefit from the refreshing of the category as well, as long as they brought the same level of innovation to competing devices.

TABLE OF CONTENTS

• Trying To Anticipate A Market Leader Leads Some To Overspeculation
• Enough Speculation: It's Time To Recommend Next Steps To Apple

WHAT IT MEANS

• The AppleSound Kicks Off A Wave Of Audio Innovation

RECOMMENDATIONS

• Competitors Should Preempt Apple With Device And Service Innovation
• Related Research Documents

This is an excerpt