Over on The Street, Jim Cramer has this to say about the Yahoo! Music Player made by SanDisk.
The morning paper gives you the best reason why. Check out this one for irony. On the front page of The Wall Street Journal’s B section, the headline is simple: “A New Wireless Player Hopes to Challenge iPod.”
That’s all well and good. Yahoo!’s got a big installed base. SanDisk (SNDK – Cramer’s Take – Stockpickr – Rating), its partner, has some clout.
But then turn to the back page. You will see something that tells you about the success, or lack thereof, of this new venture: A heart made up of iPods and two lines — “100 million iPods sold. Thanks to music lovers everywhere.”
It’s called “installed base.” It tells you all you need to know about where Yahoo! stands, which is nowhere.
I have to say I agree with Cramer. The iPod’s success is driven by great design, ease of use and access to an ever growing catalog of music, movies and television shows. This is what Rule #1 Investor, Phil Town, calls a durable competitive advantage or “moat”. Just like a castle moat presents challenges to invaders, the iPods installed base protects the iPod. The iPod has become the dominant platform and as such will be as difficult to unseat as Microsoft.
