An Apple milestone: 100 million iPods sold

Record labels and other digital music services aren’t the only ones who have been forced to adapt to an iPod world. The change also has affected companies such as Sony Corp., whose Walkman products had long been synonymous with portable music.

Sony, along with companies including Creative Technology Ltd. and even Microsoft Corp., have put out products meant to compete with the iPod juggernaut. But so far, none have been able to create a serious dent in Apple’s lead.

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The iPod’s success also has marked a transformation of sorts for Apple, which has struggled over the years as a higher-end, niche competitor to the big players of the PC industry, most notably Microsoft.

Leigh said one concern Microsoft should have now is that people may love their iPod enough to consider also switching to an Apple computer, instead of a PC powered by Microsoft’s Windows operating system.

Still, Cupertino, Calif.-based Apple has its share of challenges ahead. Although the company is enjoying a commanding position right now, analysts caution that it never pays to get comfortable in a market as fickle as digital music.

“I don’t think any company in an industry that’s changing as rapidly as this one can ever declare victory,” Leigh said. “If that means, ‘We’re the winners and we don’t need to do anything more,’ you’ve just written the epitaph.”

Instead, he thinks Apple will have to keep doing what it has been doing — introducing new products and finding new customers — if it wants to keep its lead.

But expansion can lead to its own problems as well. For example, Kay thinks Apple’s move to offer its own cellular iPhone, due out later this year, could be risky. One big concern is that, while it’s only an inconvenience if your iPod doesn’t work, having a phone that isn’t always reliable would be much more problematic.

To succeed, Kay said, the company will need to be make sure that the iPhone’s battery is dependable, and that other offerings such as e-mail work reliably for business users.

“Why do people like the iPod? Well, they like the iPod because it plays their songs simply,” he said. “But if you say, well, why do people use phones? They use it for a totally different purpose.”

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