Apple must license iPod/iTunes in order to become the dominant platform

“A report in today’s Financial Times examines the potential for Apple’s iPod and iTunes to become the dominant platform in the music market,” Macworld UK reports.

“It states that: ‘To shareholders of Apple Computer the iPod is more than a miniature music player. It is, potentially, a platform.’ And, as a platform, the iPod could be set to become one of ‘the de facto standards around which whole markets are built,'” Macworld UK reports. “But to establish the iPod as the leading platform for digital music, Apple must not make the mistakes it made in the past. According to the FT, by keeping its software to itself while Microsoft was establishing its operating systems, and working hard to win-over software developers, Apple missed out on being a bigger player in the PC market.”

“The report concludes that Apple must license its technology if it is to become the dominant platform. According to [ichael Cusumano, a professor of management at MIT]: ‘If Steve Jobs was serious about establishing the platform for digital music he would be licensing the technology. You have to wonder whether they really understand platform dynamics,'” Macworld UK reports.

Full article here.

23 Comments

  1. Someone needs to crawl out from under their rock…they’ve already reached an agreement to do this with HP almost 2 weeks ago now. I’d say seeing iTunes preloaded on every new HP/Compaq system plus announcing there will be an iPod with an HP logo by summer does the trick very nicely thank you.

    Don’t be surprised if HP isn’t the only one they work out some sort of an agreement with either. According to Apple, the iTunes bundling is a multi-year exclusive deal with HP, but the iPod licensing is not an exclusive deal.

  2. Apple should not stop with HP. I like to see GM licensing iPod for car dock, Yamaha licensing iPod for stereo receiver with iPod dock and 802.11g interface, so Mac can download tunes to iPod through it.

  3. I agree. Apple has learned from their mistakes in the past, and WILL NOT let anyone roll over them in this new market. The only problem is: ‘WHO to partner with’? Apple won’t let any Michael Dell, or Joe eMachine clone their baby. HP is not in this category because they ARE an innovator, and Carly Fiorina has more coolness in her pinky than Mike Dell could ever muster in his entire life, hence the excellent parntership between Apple and HP.

    While that’s all well and good, the only major players in the industry who actually innovate, wouldn’t partner with Apple. IBM, because they’re not in that business, and Sony, because they couldn’t stand to bear to license a competitor’s technology, especially since they’re the king in the consumer electorincs biz. The only kind of companies I could see Apple partnering with (for the iPod cloning deal – iTunes could be preinstalled on ANY manufacturers computer) would be a company like Alienware or Voodoo: cool products, unique design, and they have an impeccable sense of high quality. Although it isn’t a given that those companies would want to get into that business anyway.

  4. Yep. A rendezvous enabled consumer hifi separate tha hooks up to a mac/pc iTunes library. I know we have devices that do this already, but they need the Apple touch to make them really work.

    And an in-car system too with its own hard drive. Either an iPod dock in the car that you hook up via firewire, a removable standard sized device with a radio too that hooks up via firewire or a fixed device in the car that fills its drive using WiFi.

  5. Just so it’s clear, I was referring to those companies who are in the computer industry. It didn’t even hit me that Apple could partner with companies in other industries.

    Even so, Apple wouldn’t even NEED to license the iPod away, they would only need to license the AAC/Fairplay technology to other companies. Remember: it’s not the iPod that makes the platform (referring to music downloads), it’s the technology behind it that does (in this case AAC/Fairplay).

    Let the NEW platform wars begin! ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

  6. I totally agree. Apple can continue to sell the iPod and watch its marketshare slowly dwindle the next couple of years. Or they can license Fairplay to allow other music stores and digital music players to use it. It will hurt the iPods sales but the gold lies in the licensing of Fairplay not the iPods.

  7. Personally, I am sick and tired of the ‘analysis’ that what is wrong with Apple marketshare today is lack of licencing yesterday.

    Licencing wasn’t the problem. A complete lack of advertising and marketing was the problem.

    If anything, Apple proved that simply ‘building a better mousetrap’ is insufficient. People have to know that you have a better one, and why it is better.

    It is also true that Apple has learned its lesson�I am not sure I have seen much better advertising and marketing than Apple has been undertaking recently: wait ’till Pepsi. We could still use a few ads that show just *why* Mac and OS X is better.

    Uhhh�in my opinion, of course ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    Mike

  8. I thought I read the other day that one of the items in the Apple/HP contract said that HP was the only PC company that would be allowed to sell their own iPod. So Apple won’t be allowed to make the same deal with other companies.

    But, what does it matter? Who would you sell to? Dell? No way. Gateway? No? eMachines? Not really. HP was the wise choice!

  9. Apple has NOT LICENSED anything to HP in the sense that the article is talking about. The article mentions the HP deal as a good thing, but says that licensing to competitors is necessary to attain a M$-like level. That means giving the iPod’s software to Dell so the DJ can be user-friendly and play iTMS songs, display iCal and contact info, etc. It also means allowing other jukebox players (like Real’s) to sync with iPods as easily as iTunes does.

    I’m not agreeing with the article, just pointing out that you missed the point.

  10. Just so you all know, I think at the Expo, Alpine announced that they are coming out with a deck later this year that you can plug your iPod into, and control it from the deck.

    Alpine the biggest name in car audio, and has always been known for very high quality equipment.

  11. Just so you all know – if you don’t know already – Coca Cola has launched a music download site in the EU as of today: [url=http://www.mycokemusic.com]http://www.mycokemusic.com[/url] it is being supported by the BPI [British Phonographic Industry – UK equivalent of the RIAA here]. Bad news I believe.

    This should be something of a worry for Apple – as they’ve been beaten to legal music downloads in the EU. Admittedly by a consumer brand such as coke [how on earth will they make money on it?], but nevertheless…. Apple are not first.

    Of course the site doesn’t support Macs and will only support PCs with Windows Media Player.

    This is not good.

  12. “they would only need to license the AAC/Fairplay technology” [for Hi-Fi]

    No, they don’t need to even license AAC/Fairplay. The Hi-Fi unit can control the iPod through the dock connection on iPod and feed the audio signal (I hope Apple provided the audio signal through the dock connection) through the amplifier. One question I have is, can a Hi-Fi unit able to bridge between the PC and iPod through 802.11g/100-base-T, so PC can download tunes to iPod docked on Hi-Fi unit?

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