Will Apple dominate online music or get steamrolled (again)?

“Apple can dominate the online music scene for decades if they can get enough iPods out there to guarantee iTunes Music Store’s and AAC’s success,” writes SteveJack with his article, “Time for a decision: how Apple can win the online music war” in the MacDailyNews Opinion section today.

“Once again, for the first time since the early 1990’s, Apple finds itself with a choice: should they reap profits from a premium-priced hardware product with clear advantages in the marketplace… or sacrifice the short-term profits by cutting the price of the hardware in order to sell as many as possible…? The battle here is all about AAC vs. WMA,” SteveJack writes. “Which will become the format for online music downloading? Who will control the format, Apple with its AAC/Fairplay DRM solution or, shudder, Microsoft with WMA?”

Full article in the MacDailyNews Opinion section here. Comments can be entered in the Reader Feedback on that page.


  1. I really hope I’m wrong, but something tells me that Steve Jobs still hasn’t learned his lesson and that WMA will end up winning out here in the long run. For whatever reason unknown to me or anyone else, Jobs just doesn’t seem interested in ever sacrificing short-term profits in order to sell as many as possible and push a standard forward. He almost seems to relish in the fact that his products are a “superior niche”, when they could be the popular standard if he’d ever just go about things a little differently. I’ve seen no evidence yet that he or Apple will change their ways unfortunately, but here’s hoping they might this time…

  2. That’s the one thing about Apple I will never understand. this stupid eccentricity about being a niche player. People don’t take Apple seriously because of this kind of blase attitude. The Apple G5 commericial just totally went over most people’s heads. My friends were like, what was the point of that? It didn’t give them one reason to switch. People know computers are getting faster, but they don’t understand why they should switch to a mac. Apple really gives them no reason.

  3. Apple needs to can the pro version of QT and just give it away. The stupid message that comes up is so confusing that people get the impression they NEED to buy something . which equals…yucky Quicktime experience.
    “Upgrade your QT to PRO” or somethng.
    I am tired of a full screen slamming me in the face telling me I am a substandard QT user.

  4. The really sad and stupid thing about this is, most people who will be buying their music in WMA format are people who used to trade music on P2P networks, and are the same folks who complain so bitterly about the RIAA and their greedy gestapo tactics. The ONLY reason that these music stores are using WMA is because it was the best format for the RIAA to keep it’s heavy handed DRM. WMA has the DRM built into each and every file. With iTMS the DRM is built into iTunes software. The individual AAC file has no DRM whatsoever, it’s just another file like MP3, or AIFF, which is why it’s so easy to deauthorize a computer, or move to an iPod, etc. and give the customer so much freedom. With Apple’s Fairplay, to the average user it really doesn’t even seem like there is any DRM. But look at the mess with BuyMusic. MusicMatch seems better, but it could have been even better had they not locked themselves into WMA. The worst part of all is that now, with the wide and rampant adoption of WMA, people consider it the standard when it’s actually the proprietary format controlled by the evil monopolistic company, while Apple, pushing the actual standard, is seen as using a proprietary format. Wake up people! I really think Windows users will live to regret this choice of format.

  5. There are 2 issues or fronts to this “war”

    1) The file format
    2) The player

    If anyone is gonna have a realistic chance of winning over the market there has to be fair competition.

    There can be no fair competition whilst Microsoft is allowed to bundle the WMP with Windows (something the EU is considering banning at this very moment).

    As long as Microsoft continue to bundle then any comers are gonna have a hard time of it. Just remember netscape.

    In theory there is nothing stopping others producing AAC players but if Apple were clever they would run AAC iPods as loss leaders for the next year or so to build up market share. Remember it is all about the numbers. Just like the board game Monopoly. Consumers are sheep and will go with however they think will rule.

  6. I agree that Apple will proabably blow this one again. The article hits the nail right on the head. Use some of those billions of reserve to lowball iPods to gain market share. What I would add is that they also should not only bundle a CD with iTunes for Windows and some samples with the iPod but also mail the CD to everyone that previously bought an iPod for Windows. But the whole thing makes too much sense for Apple to do it.

  7. Two things:

    What is the actual profit on an iPod? Is it as big as 20%? Lowering the price from 399 to 329 doesn’t seem like such a huge difference to consumers when all these other issues are bouncing around in their minds.

    I wouldn’t be surprised if the profit was less than 20%. iPods are so dang small and wonderful that it just can’t be easy (or cheap) to produce them.

    And, Henry: why should Apple be alowed to bundle iTunes while MS cannot bundle WMP?

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