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Will Trendsetting Millennials Shun their Parent’s iPod for Zune and Sansa?

Authored by Scott Goldberg on October 10, 2006 - 7:34am.
In July, the Solutions Research Group reported on iPod ownership demographics, and aside from the obvious market share results (which, according to Piper Jaffray, is 79% in the past 6 months), there was one statistic that might represent an ominous sign for Apple in the short run. The biggest year over year increase in iPod ownership: People between 30-49, who comprised 12% of iPod owners in 2005, and 33% in 2006.

[Millennial Modes, a weekly column that covers the trends, attitudes, and tastes of the millennial generation is made possible by Cdigix.]

Add to that the October 5 New York Times article about University of Maryland freshman Max Roosevelt and his desire to “rebel” by purchasing a SanDisk Sansa MP3 player, and there’s a chance we’re on the cusp of seeing a different portable media player (PMP) rise in the market share ranks.

Which one it will be is impossible to tell, but that’s not as important as whether Apple is in danger of potentially losing a powerful demographic. In October 2004, an article in Bloomberg entitled “Apple’s Jobs Taps Teen iPod Demand to Fuel Sales, Stock Surge”, quoted research by Piper Jaffray analyst Gene Munster as saying, “Teens want to be cool, they want their music, and the iPod is a cool way for them to get their music.”

Flip ahead to October 2006, and imagine the following interaction between a hip Dad named Jim and his perpetually annoyed, self-pitying daughter named Daisy:

Jim: “Daisy, I’m thinking of getting an iPod!”

Daisy (rolling her eyes, scoffing): “You're getting an iPod?”

Jim (becoming giddy): Yeah! Which one should I get?! Which color?! I heard they just released a bunch of really ‘dope’ Nanos!”

Daisy: “That’s so lame, Dad. iPods are so 2005. I’m gonna go paint my nails black and listen to The Ramones.”

One of the reasons fashion designers court teenagers is because they’re more open to adopt new trends than other age groups. As soon as a particular trend – say, for a current example, the resurgence of leggings – becomes mainstream, the next trend is already in the pipeline, ready for teens who no longer want the leggings because every mom is wearing them.

Look at Terrapin Max, who said, “I just don’t like the whole cult mentality towards Apple. I don’t like how everyone gravitates toward it immediately.” Believe it or not, Max cares about that kind of thing. Design is secondary to image, and if Max has a negative perception of the iPod’s image, he’s finished with it.

There are certainly products that go beyond trendsetting rules. Snowboarding, for example, continues to be one of the largest growth sports in the U.S. Between 2000-2005, the number of snowboarders increased 50%, and between 1997-2002 the number of snowboarders aged 35 and up rose 400%, according to graysontrays.com. In fact, during the largest period of growth, 1996-2004, the median age of snowboarders remained about the same at 21, which means the increase in old folks on snowboards hasn’t affected the teenage perception that it’s a cool sport.

Another consideration is the use of the word “iPod” as not only a brand, but as a name for the device itself. It feels awkward to say “MP3 player” or “Portable Media Device” anymore, the iPod becoming synonymous with both. It’s hard to imagine that consumers, who now have four years of iPod experience, will be quick to adopt a different name like Sansa.

The one group that might, however, are Millennials, because the iPod experience isn’t like snowboarding. The iPod is not the act in and of itself; it’s merely a tool within a sport, so to speak. Teenage perception that it’s Yesterday’s News because of Grandpa’s fancy new Nano could mark the beginning of a product shift.

Just in time to meet the potential change in taste is the Zune, Microsoft’s player due out November 14th. It’s essentially the same in every major facet but one: wireless sharing of music, photographs, and homemade recordings between Zune owners. For the generation that made MySpace, Facebook, and YouTube overnight successes, the feature will be hard to ignore. Computerworld’s Mike Elgan said in a recent article, “Tweens, teens and twenty-somethings have acquired the habit of feverishly sharing videos and songs. Today, they mostly have to wait until they get home and use their PCs to do so... The Zune isn't just a solitary music player. Think of it as a portable, wireless, hardware version of MySpace.”

But will that be enough to attract more anti-conforming consumers like college student Max Roosevelt? Perhaps, but the marketing challenge is a big one. Jeff Leeds of the New York Times said on NPR this week, “The first thing they (Microsoft) will have to do is find a way to crack the iPod’s aura of cool.”

The only chance of that happening is if Microsoft succeeds in showing the youth market the iPod is their mother and father’s portable media player. If they do so, iPod had better watch out.

Scott Goldberg

[Millennial Modes is made possible by Cdigix.]

Related Links:
Analysis: Samsung Gives Apple a Taste of its Own Medicine
tags: Marketing | Music | iPod | Apple | CE | Microsoft | MP3 | PMP | Millennials | Zune | Scott Goldberg | Sansa |



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