To hear the media tell it, everyone has an iPod, and if they don't already have one, they're soon going to get one. But the fact is not everyone does. Not even by a long shot.

According to the Consumer Electronics Association, the outfit that put on the International Consumer Electronics Show earlier this month, household penetration of MP3 players--not just iPods but all brands--in the U.S. runs about 15%. That makes MP3 players one of the least popular consumer electronics product among U.S. consumers, ahead of only digital television sets, pagers and home fax machines and behind such items as liquid crystal display TV sets and satellite TV systems.

By comparison, DVD players had reached 15% penetration by January 2001, after about three years on the market. As of this year, they're now in about 75% of U.S. households.

The CEA reckons that some 7 million MP3 players were sold in the U.S. in 2004 and that another 10 million will move in the U.S. this year. By comparison, other portable audio products--portable CD and tape players and the like--sold double that number of units in 2004 and will do it again in 2005.

And while those products are on the decline--their sales peaked in 2001--they carry an average unit price of about $35. The average selling price on the iPod during Apple's latest quarter was about $264.

While Apple still has the edge on quality--I've tried out about a dozen different MP3 players, and the iPod is far superior to everything else out there--that case won't always be so clear. Other manufacturers are learning from Apple's technology tricks and trying to improve upon them while undercutting on price. This means in time Apple's iPod profits will be vulnerable.

Sure Apple can innovate by adding features like video and maybe wireless connectivity.

But even for a company as innovative as Apple, that well can run dry, leaving it to compete on price alone. That's a scary thought when you consider that 34% of Apple's revenue last quarter was derived from iPod sales. A sudden, unexpected shift in consumer tastes--they are a fickle bunch after all--could feel like a nasty punch in the nose.

I don't mean to sound bearish about Apple or about the iPod. But as good as Apple's latest results were, I've started to wonder how long the iPod miracle can last. Nothing this good can last forever.

I think Apple is making a blunder not licensing FairPlay. Ultimately, when you boil it down, it comes to respect for your customer. I think Apple is showing disrespect to the customers by locking them in.

I've had discussions with Steve Jobs about that exact topic. He doesn't see it. What it will take is a really strong competitor ... it's not Microsoft. Microsoft's business model is licensing the software, and that's what they've done in the Media Player range to a variety of different companies. It's maybe the combination of Microsoft and someone making exquisite hardware with them -- but it just can't be exquisite because of that divide, it's not the same thing. Apple's great strength is doing the hardware and the software at the same time.

You have to love Apple Computer. Not, however, for its products. Those are over-glossy fashion plates designed for the people who like to overpay for products and then brag about it.

No, you have to love Apple for its ability to manipulate the press. Here is a tiny company with 3% market share in the personal computer, and yet Steve Jobs' new product announcements at Macworld earlier this week were treated as if they were auguries of the future of computing from a descending deity.

This week's announcement flies in the face of [Apple's] prior strategy. By launching products -- its Mac Mini and iPod Shuffle -- at low-low prices, undercutting comparable products from computer-makers and portable music player makers, respectively, Apple is getting down and dirty and fighting it out on price.

After all, Dell sells more in personal computers in any three-week period than Apple does in an entire quarter. But when Dell CEO Michael Dell announces new prices for his products you don't get saturation coverage from the major North American business press.

There is also the so-called reality distortion field that surrounds Steve Jobs. He is a mesmerizing speaker, someone skilled at turning sows' ears into silk purses.

Hewlett-Packard, which recently entered into a strategic alliance with Apple to deliver HP-branded versions of the iPod under name 'iPod+ HP', has stopped placing orders for the digital music players with Apple Computer, AppleInsider has learned.

Hewlett-Packard is reportedly quarreling with Apple over a lack of price protection offered with the iPods it manufacturers through the Mac maker, possibly explaining why the two companies have yet to set a date for the rollout of the HP-branded iPod photo.

Without a set price protection policy from Apple, HP will be vulnerable to sudden iPod price cuts that would leave it biting the full cost of those reductions. Apple currently offers HP no price protection, whatsoever, on the two models it currently sells.

"I find it striking that even a company that is larger than Apple, and has better distribution channels, can’t get anywhere with them in terms of protection of their business model in the event that price drops take place down the road," said one reseller.

It's on! We knew that Apple was having a heck of a time getting the PowerBook G5 out the door (the G5 processor presents some mighty heat and power consumption issues to overcome), but we’ve got some good news to report. For whatever reason they sort of bury it in a chart that accompanies the story, but Digitimes says that Quanta Computer, the Taiwanese contract manufacturer that builds the PowerBook for Apple, has received a massive order for the PowerBook G5. Delivery date: Q2. Start saving now.

In response to Office for Mac users' request for an easier way to migrate .pst files from Outlook 2001 to Entourage 2004, Microsoft created the new .PST Import Tool.

We are currently hosting a public beta program intended for IT managers who are willing to help us test the .PST Import Tool. Tester feedback will help shape the direction of this product.

I buy Apple products. It just makes me feel special.

Before I found out I was being sued, they called me up to let me know they were doing an investigation. To be perfectly honest, the individuals who contacted me were polite and respectful. When I asked them if they were suing me, they let me know that if I cooperate, that Apple has a history of being a generous company.

I answered all the questions they asked regarding how I got the torrent, how long I had seeded it for etc. I was honest and as helpful as I possibly could be. I suppose sometimes, honesty has a way of kicking you in the arse.

I pride myself in being a decent person, but when you're handed official documents that state you are being sued, it makes you feel like the absolute worst criminal there is.

Analysts expect sales of Apple's groundbreaking iPod device to come in between 4.5 million and 5 million units for the quarter, up from 2 million the previous quarter.

Introducing a lower-cost iMac (Apple's least expensive unit is $749) would eliminate the "boutique" tag and finally get Apple into the fastest-growing segment of the PC industry -- the low end.

As to the halo effect -- the belief that the rocket-fueled growth of iPod sales would spur users to buy a more margin-rich Apple computer -- it's a nice theory. But so far, that hasn't happened.

"I have sifted through the numbers, and there's no evidence of [a halo effect]," IDC vice president Roger Kay says. "The iPod is two years old, and Apple's desktop share has been absolutely flat for that period. I would applaud Apple's introducing a sub-$500 computer. It would address the company's one glaring weakness in its computer line -- nothing on the low end."

Last year saw the emergence of portable media players, such as the Windows-based Creative Zen portable media player, the Samsung Yepp, the iRiver PMC-100, and the Archos AV400 series among others.

But this year, they are set to get smarter and more connected, to allow people to find more video to watch on them.

"Consumers are showing a great thirst for devices that store all their media in one place for anywhere access," said Henri Crohas, chief of Archos. "And now those consumers can stay connected and productive at the same time."

Microsoft ... has agreed a content deal with personal video recorder company TiVo, which Bill Gates also showcased in his keynote speech at CES.

The TiVo To Go service means that US consumers will be able to take any programmes they record on their TiVos and transfer it for free to watch on any of the Windows-based portable media players or smartphones.

There is a burgeoning market there for commuters to watch news and other programmes on their way to work.

Speaking at the Consumer Electronics Show in Las Vegas on Friday morning, HP CEO Carly Fiorina offered a sneak peek at the products her company will try to insert into people's living rooms, as well as prototypes of other things yet to come.

Fiorina said, for instance, that HP will come out with a version of Apple Computer's iPod Photo later in the year, and she gave the first public demonstration of a media hub that comes with high-definition television capabilities, a digital video recorder and in-house screen technology that improves the resolution.

With the largest International Consumer Electronics Show (CES) ever wrapping up yesterday, many in the tech press are turning their attention to this week's MacWorld, an annual event held in San Francisco that highlights the rabid nature of the Apple fan base. As usual, rumors are swirling around this year's MacWorld event, with many expecting a $500 iMac based on outdated PowerPC G4 processor technology. But anyone interested in such a device is missing the point: Apple conceded the PC market years ago and its line of Mac computers now constitute little more than a niche market. No, the news from MacWorld this year will be all about consumer electronics and what Apple can do anything to build on the success of the iPod before Microsoft's PlaysForSure cabal can crush it like a bug.

Though I got my nice new Mac and switched to using it has my main personal desktop/laptop machine, it's been a frustrating experience at times ... KDE is actually quite more usable in many respects than Mac OS X ... I've recently started using the Compaq nc6000 laptop that I got at work. It runs Windows XP Professional and is a very nice little machine ... The Mac felt slow and awkward for daily "office" use. So I decided to begin using the Windows box for my work related activities in 2005. Instead of hauling the Powerbook to Yahoo each day, I now take the Compaq.

Here's the funny thing. I've found that nearly every one of the Open Source applications I've installed seems to work better and significanly faster on this machine than on my nearly new Powerbook.

In other words, open source applications feel better on Windows than on the Mac. This was quite a surprise at first.

Microsoft wins this round.