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How Apple Crossed The Chasm with the iPod

Recall form last week’s article I discussed the phenomenon of the discontinuity in the technology adoption lifecycle curve between the early adopters and the early majority called the “chasm.”

I presented a strategy of how to cross the chasm by creating a whole product that gets a customer’s complete job done – hassle free and better than any other competing alternative.

A great example of crossing chasm in recent memory is Apple’s success with its iPod. Apple neither invented the MP3 technology, pioneered digital music downloading, nor introduced the first “successful” MP3 players into the market. Yet they are the ones that redefined the music industry.

The state of MP3 players in the late ninety’s

You may recall that there were several MP3 players and download services available by late 1999.  For example Diamond’s Rio was a nifty product that achieved initial market success. No doubt about it, the early tech enthusiast embraced it. But it seemed to be stuck – as it turns out it was at the edge of the chasm.

Adding to Rio’s chasm crossing challenge was the Recording Industry Association of America (RIAA).  The RIAA was anything but thrilled  by Rio. Rio and MP3 music was a threat, and RIAA wasn’t going to sit idle and watch its monopoly get disrupted by tech upstarts.

So it filed a law suit against Diamond that would ultimately fail leading the way for the MP3 portable digital music industry to take off.  (Side note: a good argument suggesting first to market isn’t always the winner – but Apple was much more than a fast follower.)

I recall looking at the Rio in early 1999 at the Summit (remember  – great ideas but they couldn’t get across the chasm either) and thinking – “interesting but this solution doesn’t really improve how I currently get my job done of listening to music on the go.”

What people really wanted  wasn’t so obvious

Apple recognized that people like me (music enthusiast) didn’t want an MP3 player.  What we wanted was to listen to our personal music on the go.  That was our primary job to be done.

Products like the Sony Discman, CD players in our cars and “boom boxes” seemed to be getting our job of listening to our music on the go done. And while lugging CD’s around was a hassle, it still wasn’t a show stopper. And it was easy to use. Just load the CD into the machine, press play – and we were rocking.

But Apple realized that the physical size of  CD’s constrained people from being able to have their complete library at their fingertips. At the time I had more than 200 music CD’s and more than 300 LP’s – try lugging those along in your pocket.

Grant it, most of us did not truly understanding the future impact of how the MP3 file format would dramatically change our music listening habits much let alone the industry. Few of us were asking for a new generation of music players and delivery systems. What we had seemed good enough – we just simply didn’t know any better.

What did Steve Jobs and his marketing and development team know?

Apple realized that the MP3 products on the market were a pain in the ass to get the music on to them. As well as a pain to locate and organize music on these early players into customized playlist. Even if Apple could solve eliminating the need to lug CD’s around, they needed a better user experience than Rio and alike.

And who wanted to deal with the hassles RIAA was throwing out into the market?  The RIAA digital music distribution solutions were clumsy, based on the old paradigms, and laced with potential legal actions to protect their core business model.

Apple correctly hypothesize before anyone else totally figured it out,  that what people really wanted was simple, convenient, and fun way to organize and listen to their personal music on the go. And the music consumer wanted a simple and exciting way to discover new music, and share it with their friends.

Apple reasoned that most people wanted to support the artist and pay a fair price for songs. Most customers really didn’t want to steal music form the labels. But customers also were tired of paying for the middleman. The perception was that the middleman wasn’t adding value for the customers in the new digital era. If anything, they were perceived as greedy and exploitive to the artist.

A complete experience along the consumer consumption chain

Apple understood for the iPod to be a mainstream success, it needed to create more than a great product, but also a new business model and ecosystem where the artist,  publishers and labels could participate with Apple in transforming an industry into the new realities of the digital age.

The iTune digital media player, media library and store application were the final pieces of the puzzle that provided the customer a whole product to enjoy their music in a new way never thought of previously.  This was the brilliance of Steve Jobs and his marketing and product development teams in crossing the chasm. And not to be forgotten, they were great at execution – led by the vision and leadership of the late Steve Jobs.

A perfect storm waiting for the tornado

The music industry at the time was a perfect storm that Apple understood and embraced. It captured the moment by providing a whole product addressing a very important job the customer wanted done, and did it better than all of the competing alternative solutions at the time.  As a result, Apple redefined a total industry – not just a product category.

The rest is history.


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