Analysts Still Smitten With Apple

The shine is still on the Apple (Nasdaq: AAPL) in the portable music player market, analysts say, and that's unlikely to change anytime soon.

The Silicon Valley darling's unveiling of a video capable iPod only enhances the company's dominance in a worldwide portable music market that IDC predicts will grow more than fivefold to 124 million units sold by 2009.

"The MP3 market player side is really Apple and the other guys," Michael Gartenberg, vice president and research director for Jupiter Media, told MacNewsWorld. "Apple has continually refreshed its product line, form factor and features and continues to put pressure on competitors."

Ahead of the Curve

Innovation and brand cache will keep Apple ahead of the pack in this market, he said.

"Clearly these guys are thinking ahead. As companies were trying to put out a competitor to the iPod mini, Apple was ready to kill the mini and introduce the nano," Gartenberg said. "People have been talking about a dramatic shift in the market since Apple introduced the iPod. There are other products out there technically as capable, but they haven't captured the hearts and minds of consumers."

IDC divides the "compressed audio market" into four segments: portable, home, automotive and other, which encompasses devices that can play and store music as a secondary function. It is the "other" category that IDC believes will dominate the segment, reaching sales of more than 700 million devices by 2009.

Watch This

The unveiling Wednesday of its video iPod puts Apple out in front again. The new iPods will have a 2.5 inch color screen and have battery power to play about three hours worth of video. Apple will release a 30 GB version for US$299 and a 60 GB version for $399. Both black and white versions of the devices will be available.

"Apple has done something really smart," Gartenberg said. "They didn't mess with the form factor, but added legal premium content at a reasonable cost."

The video downloads will cost $1.99 apiece.

IDC said video will be a key to growing demand for portable flash players and hard drive-based portable jukeboxes. That only serves to boost Apple and its iTunes download service even more.

"This feature is expected to be complemented by music video downloads from paid online media services," the analyst firm forecast.