To its credit, Apple continues to defy analysts' predictions that it will fail. Apple has set the industry standard for music downloads and portable music players. Apple has garnered some US$500 million in music downloads sold via the iTunes music store. Apple sold more than 6 million iPods in the third quarter.

With analysts estimating that as many as 400,000 Windows users have switched to Apple under what they call the iPod halo effect, the reports of Apple's demise clearly have been overstated. Even better for Apple is that Microsoft, Sony and other software and hardware manufacturers are scrambling to emulate Apple's dominance in portable-music players and digital-music sales.

What lessons can Apple's competition learn from its newfound success? According to industry analysts, the differences between Apple and other manufacturers can be summed up in one phrase: Keep it simple and innovate -- in terms of the user interface as well as marketing.

Geek Factor

The major difference between Apple and Microsoft is the type of consumer that each company perceives its users to be. That distinction shouts volumes. Microsoft pursued the wrong perception in appealing to its view of the common man.

"It's almost like Microsoft is designing [software] for geeks and Apple is designing for real people," said Joe Wilcox, a senior analyst at Jupiter Research. "Microsoft's common man approach is centered on the price [of its software]."

Wilcox said that in terms of functionality, Microsoft's approach to the common man is too complicated and requires a "walk-him-through-it process." The user has to plug in something that launches the wizard. Then the user has to go through six or seven steps to get the device to complete a first-time configuration . "Whereas Apple's common-man approach is you plug it in and it works," said Wilcox.

A stroll down San Francisco's Market Street is a prime example of the simplicity of Apple's vision, innovation and marketing strategy. According to Wilcox, it is difficult to find anyone on Market Street who is not sporting iPod's distinctive white earphones. (continued...)

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