Apple Computer at brink of online music battle; heavily armed with iPod

Apple is at a crossroads. The company has the hottest hard drive-based music player with its iPod line. The company has defined the best online music downloading experience with iTunes. Now Apple stands poised to unleash iTunes for Windows, but various potential pitfalls could endanger the Cupertino company’s quest to dominate the online music market.

“This is not the first time Apple has stood at the forefront of a nascent market. The company’s original Macintosh operating system was the first mainstream OS to use a graphical user interface (GUI), back when Microsoft was still peddling MS-DOS in the 1980s… Nevertheless, despite consistent critical and consumer raves about its products, Apple’s market share has hovered around 3 percent of the PC market for several years. Apple’s foray into the digital music space suggests it is not betting its future simply on its computers and attendant software. But will the company drop the ball again, or will it move quickly to leverage its installed base of Windows iPod users into a Windows foothold for iTunes? If it does, it conceivably could dominate the online music market,” Robyn Weisman writes for E-Commerce Times.

The battle is shaping up between Apple’s AAC/Fairplay Digital Rights Managment (DRM) soluton and Microsoft’s WMA format. As long as iPod remains very popular, AAC won’t hurt Apple in the Windows-dominated market. But, should iPod slip, Apple’s leverage will evaporate quickly and we’ll likely see the WMA format, which is compatible with, MusicMatch, etc., incorporated into the iPod. iPod is the key here; if you own an iPod, the only real choice for legal online music is Apple’s iTunes Music Store. The more iPods Apple sells, the better iTMS for Windows chances of success. This is a bold gamble on Apple’s part. It could approach the importance of the early 1990’s OS battle between Mac and Windows. This new online music battle doesn’t have to turn out the same way, but Apple has to get iTunes for Windows out to the world and it had better work very, very well. Reducing iPod prices in order to win the war wouldn’t be a bad idea either.

Read the full article, “Apple’s New Bid for Insane Greatness” over at E-Commerce here.


  1. WMA on iPod? That will be the day.

    Seriously, when Windows users have iTunes as an option that is what they will use. Every article I have read about online music downloads mentions the popularity and success of the iTunes Music Store. All the other services are trying to be just as good and come off second best. Apple offers the real deal, not some cheap immitation which is exactly what Dell is now offering.

  2. They got it backwards. The Music Store is about selling iPods and Macs. Very little money is to be made on actual music sales. .35 / track minus all the operating costs amounts to very little and massive volume is the only thing that can allow track only company like MM to break even. MM is hoping it results in more conversions to their upgrade jukebox. if a price war ensues and track prices fall, Apple is the only one to benefit since they only see the music store as a leader to their iPod and Mac sales. MM and buymusic do not have that luxury. (The other question is, can Microsoft continue to add losing divisions.)

  3. make no mistake, iTunes is a great product. the only problem is most of the iPod users are on Windows. Once iTunes for WIndows comes out, Apple will win this war. If Apple was smart ” width=”19″ height=”19″ alt=”smile” style=”border:0;” /> they would have released iTunes for mac and Windows at the same time, even if iTunes for Windows was lacking in some features.

  4. “even if iTunes for Windows was lacking in some features.”

    If Apple released the App for windows hlaf-assed, most, if not all Windows users would not use iTMS, and probably would never even consider it again. By putting it off, getting similar, if not identical usage rights, and releasing it later, Apple has a MUCH better chance of succeding in this new market. Especially since most of the current competitors just plain suck, and the others haven’t been released yet.

  5. Apple has never gone “half way” or “second rate” with anything they produce. Apple will never sacrifice quality for quantity; that is their most fundamental philosophy.

    Apple is very well aware of the state of the Microsoft universe, and if they can bring a little Apple magic of simplicity and quality with no additional charge, then you will see iTMS for Windows. I hope consumers can see what can be done without Microsoft’s fingers in the soup. Do they really want to trust Microsoft with ANY security, even the security of their music?

    …and if the music/artistic industry wants to keep their own universe open and free, they should work much more closely with companies like Apple. Their constant bickering to eek out the last possible dime from royalties, resulting in complex usage rights, is having the opposite effect by isolating the general listening pubic and creating a weakness that a major monopoly like Microsoft can exploit. (I am waiting for Microsoft to claim that any data -music, artwork, etc.- encoded using their proprietary encryption belongs to them while it is encrypted.)

    It is better to live on a small free island than a large prison.

  6. Apple should as soon as possible come out with a Windows version of itunes. Not only will this leverage the ipod and the online store but it will probably switch Windows user over to the Mac. I am not sure what Apple is waiting for?

  7. Macs have a market share of 3%. Most Mac users are pretty proud of the elitism this creates. I dont think Apple are able to sell to a mass market. My guess is that Microsoft will persuade entertainment companies to adopt their version of Digital Rights Management and for the average Windows user it will be cheap and it will work. Why buy an expensive iPod from a community that looks down on Windows users?

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