Sony Takes On iPod with MP3 Walkman

In an attempt to take back the market share it lost to Apple's (Nasdaq: AAPL) iPod, Sony (NYSE: SNE) has launched a new MP3 compatible player under the trusted Walkman brand name in Europe.

"At Sony, we understand the needs of music lovers and the different ways people consume and interact with music because of our great heritage in the personal audio arena," said Gregory Kukolj, general manager for Personal Audio Europe at Sony.

The Walkman NW-E99 and NW-E95 mark Sony's first flash memory foray into the Apple-dominated digital music player market. Music lovers can store up to 23 CDs on the NW-E95 and up to 46 CDs on the NW-E99 using ATRAC3plus compression format, and the pocket-sized players boast 70 hours of battery life with a weight of 40 grams.

Kukolj predicted the new models would further develop the credibility of the Walkman brand in the personal network audio market.

Apple Dominance

Perhaps, analysts said. However, Apple still boasts 54 percent of the hard-disk unit shipments in 2003, dominating a market that is expected to soar to from 2.7 million units shipped last year to 25.5 million units in 2008, according to IDC.

Whether Apple will continue to rule the portable music player roost remains to be seen, as it faces some noisy competition from a combination of large and small players, including Samsung, Virgin, Rio Audio, Dell, Creative Labs' Zen Micro, Archos and iRiver.

The NPD Group's August figures show Rio and Creative neck and neck for second and third place, with 2.4 percent and 2.3 percent of the market share, respectively.

Stephen Baker, the director of industry analysis at the NPD Group, told the E-Commerce Times that Sony's new MP3-compatible Walkman shows that the company is willing to compromise their proprietary format to enter into the industry mainstream. However, he still doubts Sony can touch Apple's growing iPod empire.

"This won't have any kind of impact on Apple in the short-term," he said. "Competitors so far haven't affected Apple's sales or go-to-market strategy. I don't think Sony's MP3 compatible player is going to change that, even though it's flash-based. It's going to be a while before we see serious competition for the Mini iPod in the flash market."

Online Music

Apple and Sony have also been battling in the online digital music arena that allows users to download songs to play on the hardware. Apple's iTunes Music Store is winning the war against Sony Connect, for now, which analysts said bodes well for the iPod.

However, Apple is not resting on its laurels just because it has a head start on the competition. Analysts are expecting iPod enhancements.

There is lots of speculation, but one thing is certain, Baker said. Apple has the first mover advantage in the MP3 segment and the marketing savvy to keep it atop the digital music player charts.

"Apple doesn't go to market based on speeds and feeds or specs," Baker said. "Apple offers the whole package that includes non-quantifiable things like making the consumer feel hip. Apple is very good at capitalizing on those kinds of marketing messages in a way that most tech companies are not able."