Watching and talking to people in places like Best Buy and Apple Stores turns out to be a fascinating experiment. Lately I've been chatting with people as they look at digital music players.
At BestBuy no one is interested in the hard disk based players - everyone seems to be looking at the $100 to $200 solid state players. People seem to buy them like they buy usb memory sticks. Physical display of the product, what it looks like and color seem to be the primary considerations. There seems to be little sense of brand and people are very confused by the specifications. I've found that I can directly influence what someone buys by explaining one or two details on a player.
Apple Stores are different. People are going in for the Apple iPod brand. It has been vetted by millions of other people, so they are only interested in which model to get - color, size, price and storage capacity. It is interesting to note that people have little concept of matching storage size to their own music libraries. I've found that asking the question "how many CDs do you own and how many do you buy a year" quickly focuses people on a particular model.
I'm finding that about half the people I encounter in Apple stores say they have fewer than 100 CDs. If you probe a bit deeper you find that this group like about 20 CDs in that set.
People who are heavy music consumers (and I'm one of them) have a difficult time understanding that some people aren't interested in huge libraries, but they want to listen to what they have constantly.
The other thing I notice is that many of the kids drooling over iPods can't afford them. They really want the iPod/Apple brand, but $250 is too spendy. If you push these kids you hear $100 or a bit more. It is very striking when you talk to people buying eMacs. An iPod is too expensive for many of them - I'm finding that many would be interested in something a bit smaller.
All of this convinces me that Apple needs to deliver a flash based player. I've done some other survey work that shows these two market segments are fairly separate - you don't have to worry about cannibalization. If Apple introduced a $149 512MB flash player that was clearly an iPod they would instantly rule the solid state market.
Many people (including me) have been suggesting this in recent months, but when you begin to talk to consumers a very strong signal emerges. I'm going to conduct a more serious study to understand the demand and required features more deeply, but Apple would be foolish to ignore this market. This is the one area where Sony could introduce a player (if they could do it in the right price range) that could capture the market.
At a high level the only change I would make to iTunes is a more convenient mechanism for creating playlists that match the size of the portable player. Some feedback such as percent full would be very useful.