Analyst says Apple mutating; music service ‘signals transformation of Apple into a digital media com

Matt Richtel writes for The New York Times regarding Apple’s rumored online music service, “Apple itself has provided few details of its new service, but people in the music industry and analysts said users would be charged 99 cents to download individual songs drawn from the catalogs of the big record labels. They said that once users download the music, they would be able to listen to it on their computers or transfer it to a portable music player.”

Richtel continues, “Unless Apple unveils something radically unexpected, its service will not represent a marked difference from some of the Internet services already in existence. The announcement, however, will bring a big-name company into the mix, presenting a potentially significant change in what has been a tense relationship between consumer electronics makers and the music industry.”

“…Philip Leigh, a digital media analyst with Raymond James & Associates, an investment banking firm in St. Petersburg, Fla., said the presence of Apple in the market could give a lift to digital music services beyond the confines of Apple’s limited user base. The reason, he said, is that if Apple starts advertising the sale of music, ‘they’ll be advertising to the whole world.'”

“‘It will raise the consciousness of the public that there are legitimate alternatives to KaZaA,’ Mr. Leigh said. He added that Apple’s experiment would also allow the music industry to see how a piecemeal 99-cent offering – without connection to a monthly subscription – works in the relatively small universe of Macintosh users. And he said the move could mean a long-term shift for Apple. ‘This signals a transformation of Apple into a digital media company,’ Mr. Leigh said. ‘Within 10 years, we’ll look back and say this is when it mutated,'” Richter reports.

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