is ipod a monopoly in mp3 market?
although this is a old question, i would like to comment on this topic.
In Economics, monopoly (also "Pure monopoly") exists when a specific individual or enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it. Monopolies are thus characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods. Alternatively (a modern and less common usage), it may be used as a verb or adjective to refer to the process (see Monopolism) by which a firm gains persistently greater market share than what is expected under perfect competition.
In Business, a legal monopoly in the UK is a company that has a market share of over 25%(the U.S. has no automatic definition of monopoly. I don't know about singapore), although in Economics I believe it to be a market of many buyers, but only one seller. Meaning depending on the product's elasticity it can change price and demand should only decrease a little if inelastic, or none at all if it's perfectly inelastic.
although Apple sell to 75% of the market (maybe not exact figures) that they don't actually control the market.But to me, the question of market share is not easily answerable, if only because the market itself needs to be defined properly. Every company has an automatic 100% market share for their own products. Is that a monopoly? Hardly anyone would say so, but some argue (for instance) that Apple monopolizes the Mac market, because only Apple can make a Mac. It's a ludicrous way of defining a market, but people do it.
I googled and got this: http://www.theregister.co.uk/2004/10/12/ipod_us_share/ which quotes "Apple iPod grabs 82% US retail market share" which is very high. while they have a large marketshare and a closed market, the ipod allows non-drm'd music to be loaded on. Since Apple does not have an exclusive on pricing or cds to a majority extent, there are other ways to utilize an ipod without downloading from iTunes. As long as there are other ways that are equally convenient to obtain music and mp3 players, it's not close to a monopoly.
Apple does not fit the description of a monopoly because it does not have the primary characteristics of a monopoly. Apple Computer Inc. is not the only seller in the MP3 player market. There are many competitively priced substitutes for the iPod. Also apple certainly is not barring anyone from entering the market.
On another perspective, now there are so many mobile phones that can play music, and Apple becomes a minnow. Many other portable media devices (it plays games, does video, and photos). It is also supported by a huge third party industry making accessories which make the iPod a more compelling choice (stylish speaker set or some dodgy set up?). The market is thus difficult to define.
I think my ideas are pretty messy and hope my dear classmates can discuss the issue..thank you.
regards
zhao jianing