Peer 2 Peer

Executive Summary

The peer to peer file sharing networks enable the users to obtain digital contents at free of charge. This has caused the entertainment industry to suffer and incur a loss. However, the development of Apple’s proprietary software which require legal downloads appeared to be somewhat successful even when the popularity of free downloads increased.

This leads to the key challenges of how companies such as Apple who use the client-server system should effectively compete with the popular peer-to-peer networks. Additionally, Apple must be aware of their pricing structure in order to remain competitive in the digital content distribution industry against the p2p sharing networks.

First, p2p sharing networks would not be eradicated in the near future so the emerging proprietary software companies such as Apple must face the key challenge of working under the situation where they have to compete against the existing p2p networks.

Second, due to the free downloads available at the p2p networks, Apple must face the challenge of setting the low download price level in order to attract customers to download from their website.

SWOT Analysis of the Digital content distribution industry

The competitive advantage of Apple’s online store is their ability to offer faster downloads due to their client-server model technology. On the other hand, the competitive advantage of p2p networks is their highly decentralized network structure which enables them to fight against legal lawsuits.

According to the framework of competitor analysis, Apple and p2p networks are categorized under high market commonality and low resource similarity. This is because both of them compete throughout the world where there are broadband internet connections such as Korea, Netherlands and Denmark. However, they have low resource similarity because p2p resources are shared between the peers whereas the client-server system provides a central server