Apple was once an also-ran in the personal computer industry, which was dominated by Microsoft’s operating system. Apple has effectively turned the tables in the portable device business because of the success of the iPhone, iPad, and the OS that powers them. Apple dominates two critical sectors, tablet computers, with the aforementioned iPad, and music downloads with the iTunes store. Apple’s introduction of the iPad in 2010 was viewed by some as an arrogant attempt to sell the unsellable, something that was neither a smartphone nor a laptop. Instead, sales exceeded even the most optimistic expectations, and the iPad has since been a major new source of revenue for the company. Thus far, competitors like BlackBerry and Samsung can’t seem to make a product capable of getting a foothold in the market. According to Forbes, as of fourth quarter 2010, Apple controlled 73% of the tablet market, with Samsung commanding 17%.
Introduced in 2001, Apple’s iTunes music store is the reason most people no longer buy music in stores. The ease and selection of purchasing digital music exploded soon after the store was created, and nothing has been able to compete with iTunes’ sales. According to Reuters, the store’s closest competitor, Amazon, accounts for less than 10% of digital music sales, with iTunes commanding roughly 70%. Reuters has reported that the Justice Department is conducting an antitrust investigation of iTunes.
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>Market Share: 67%
>Competition: Barnes & Noble, Sony
According to a report by Goldman Sachs Group Inc. published in February, Kindle’s market share of e-readers is 67%. The second most popular e-reader is the Nook, which has 22% of the market. The success of e-readers has revolutionized the publishing business. Ebooks outsold paperback books for the first time in January of this year. This trend has caused Barnes and Noble to refocus its business, and pushed Borders Group into bankruptcy. According to The American Association of Publishers, e-book sales rose to $441 million in 2010, up from $169 million the year before. The market shows no signs of slowing down, and the popularity of Amazon’s Kindle shows no signs of waning.
Sirius XM Radio is the holding company of Sirius Satellite Radio and XM Satellite Radio, the country’s two largest satellite radio providers. At one time the companies were fierce competitors, and both were losing money. In July of 2008, the only two satellite radio companies in the country merged. The merger was deemed legal after more than a year of deliberation by the Justice Department. Today, the company is the only satellite radio provider in the United States.
PayPal is the undisputed leader in online payments. The company, which is owned by eBay, currently manages more than 232 million accounts worldwide. In 2007, two antitrust lawsuits were filed against eBay with regards to its relationship with PayPal, however both were thrown out. Recently, Apple and Google have announced new payment services, though it is unlikely that they will take significant market share from PayPal.
-Douglas A. McIntyre, Michael B. Sauter, Charles B. Stockdale