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iPod Glitches Not Hindering Sales

Much in the same way cassette tapes used to get “eaten” and CDs get scratched – the all-digital Apple iPod has problems all its own. A story in The Wall Street Journal today reports that a cottage industry based on iPod repairs has sprouted up out of the need for battery replacements, hard disk restoration and new screens. But with no real competitors on the market – even Microsoft’s Zune is barely making a dent in iPod sales – it doesn’t look like people are ready to switch away from Apple.

Brian Cooley – editor at large for CNET.com – was on “Squawk Box” this morning talking to Carl Quintanilla and Joe Kernen. He gives three basic reasons why the iPod will stay dominant in the MP3 player space:

1. Nothing else seems as safe. Most likely everyone you know has an iPod. Most consumers aren’t willing to walk away from what’s known for the unknown.

2. Maybe you bought an older iPod and it broke. But now there’s a newer, sexier iPod out. Why not buy that?

3. Chances are if you have an iPod – you’ve already invested heavily in iTunes – which is the only playable format for an iPod. Leave the iPod behind – and none of your songs can come with you – at least not easily.

There are also a host of accessories available for the MP3 market – but they’re largely compatible only with the iPod. Even Continental Airlines and Delta are in line to install iPod chargers in their seats.

Also, Cooley says that a company needs well above a 15% fail rate on a consumer electronics product before it can be written off. (Laptops clock in at about 15%.) Apple is claiming the iPod fail rate is about 5%.

Microsoft’s Zune is “a good start” – says Cooley. The Redmond, Wash., company is the only one big enough to make a run at Apple. But for now Apple is king of the hill.

Fun Fact: You might know that third-party software is available to take songs off your iPod and store them on your PC’s hard drive – iPods were designed only to download--not upload.

But Cooley shared a little-known avenue for those users who lose both their iPod and PC to a crash. Often times – if you plead your case to Apple tech support – they’ll authorize through iTunes the re-download of the songs you lost. Keep that in mind for the next time your hard disks short out.


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