It's a Sunday eve and I saw the line for the 3G iPhone wrapping around the
block in Soho yesterday and as both an Apple and Slim Devices customer I've
wanted to think through this topic for a while.
By way of disclosure I'm both an iPod and Slim Devices fan. I use them both regularly
and believe they are both strong products. I own an iPod 80 GB Classic, have a car stereo with an iPod adaptor, purchase some music videos from iTunes,
purchase a good bit of music from Amazon, own two Squeezebox Classics, have a
SqueezeCenter server, have 11,325 songs or 81GB of music on a NetGear NAS;
listen regularly to KCRW in Santa Monica, CA while I reside in NYC (guests are
sometimes thrown off by the LA weather reports), have subscribed to Pandora,
Rhapsody and emusic in the past.
I also recognize that Apple's consumer strategy goes way beyond audio… to all
forms of digital entertainment and distribution. But I'm going to take the
liberty to focus just on home audio part of their strategy.
At a basic level, the "stereo receiver" is a consumer electronics
device which typically receives analog output from a diverse set of consumer
electronics devices, amplifies this output, and re-outputs it to loudspeakers.
One of the innovations that made the stereo receiver successful was the
standardization of various electrical connectors, primarily the RCA connector,
which helped enable an industry to form around marketing diverse specialized
stereo components -- turntable, cassette player, CD player, 8-track
player -- and ensure that they would be able to work together. This
modular, standards-based architecture has worked well for what is probably
already five or six decades.
With the introduction of music distributed in digital rather than analog
form, the industry underwent radical change in how music is distributed and
consumed. Obviously this is an area filled with battles of historic proportion,
but that's not what this post is about...
Generally speaking when it comes to actual audio playback, stereo components
-- like CD and MP3 players -- must still convert music to an analog form,
so devices are equipped with a digital-to-analog converter (DAC), which
converts audio into the analog signal that stereo receivers use.
Like all these devices, the iPod has a DAC. It exchanges content in a
digital format with the PC via USB and plays back audio in an analog format.
But unlike its predecessors and competitors, the iPod did not use a standards
based interface. Rather than use an analog interface (like RCA) or a digital
interface (like USB), Apple introduced its own proprietary interface called the
"Dock Connector." The Dock Connector only works with products
specially designed for the iPod. There were likely many good business and
technical drivers behind this decision, the only point I'm making here is that
this design was not standard.
The dock connector was developed in conjunction with several other
innovations, for example simple and effective design, a vast music licensing
engine, and a direct distribution channel thru its iTunes client software.
Apple also embraced a digital rights management program that didn't use the
ubiquitous mp3 format and instead ingeniously went with its own encrypted
format in order to give music publishers a measure of protection against piracy.
Together, these innovations created a vast proprietary ecosystem which shifted the
center of the music world in Apple's direction....
That's where startup companies like Slim
Devices got their start.
In pursuit of a non-proprietary
solution, they developed an open source home music server and a simple
appliance that enables non-encrypted music to be distributed around the home.
Slim Devices' products initially centered around the Squeezebox, a network
connected appliance that connects stereo receivers to streaming music sources.
It uses a standardized network interface (RJ45 or 802.11) and a standardized
analog or digital output. It can decode many file formats including Apple
Lossless, AAC, WAV, WMA, Ogg Vorbis, FLAC, and others.
The Squeeezebox works in conjunction with an open source home computer music
server (called the SqueezeCenter) that accesses a local music collection, or an
internet service (called the SqueezeNetwork) that accesses remote streaming
collections (like internet radio). Both the SqueezeCenter and the
SqueezeNetwork stream music to the Squeezebox, which converts it to the analog
signal that the receiver can send to the speakers.
From a systems point of view, by IP enabling stereo receivers the Squeezebox
is basically a "legacy system modernization" approach. A stereo
receiver may still function well for the user, other devices may still depend
on it, or the cost of replacement may be too significant, so replacing it may
not be what the user is looking for. Taking this approach, and open sourcing
their server, it appears that Slim Devices was able to build up an impressive group of customers and
enthusiasts around the world.
In short, while Apple focused on owning the playback thru iTunes and the
iPod, Slim Devices focused on enabling existing home equipment to become part
of the distribution chain for non-Apple encrypted music.
What has been interesting to watch, is how Slim Devices products have
gradually chipped away at different use cases in the distribution of music in
the home. Soon, they could have their own end-to-end ecosystem.
For example, when the Squeezebox is connected to the SqueezeNetwork the
Squeezebox acts as a client to a remotely hosted streaming audio server, rather
than as a client to the home computer which hosts the local SqueezeCenter
server. In this use case the home computer is eliminated.
In another use case, the stereo receiver can be eliminated. The Squeezebox
Receiver can be used directly with powered speakers.
In a third use case, both the home computer and the stereo receiver can be
eliminated. The SqueezeNetwork can stream audio remotely
and the Squeezebox Receiver delivering it directly to powered speakers.
Presumably the next step will be for Slim Devices to introduce a Squeezebox
Receiver that completes the requirements by adding an amplifier. When
this happens the hardware portion of the Slim Devices ecosystem will be
basically complete, leaving Slim Devices to focus on the content part of the
equation. Slim Devices has focused on remote streaming services like Rhapsody,
Live365, Pandora, and others to provide content. Now that Slim Devices is part
of a large company, it was purchased by Logitech in October 2006, maybe it will have the opportunity to incorporate the
purchase of music for local or remote storage from other distributors, like
Amazon.
Of course, this analysis only addresses the distribution of music in the
home... portable music would be another story.
