“Apple Computer’s apparent cold shoulder to RealNetworks this week has once again put the company’s ‘go it alone’ strategy in the spotlight,” Ina Fried, Richard Shim and Matt Hines report for CNET. “With the Macintosh, Apple decided to keep its operating system proprietary, licensing it out only on a few rare occasions and keeping control of both hardware and software. The approach has arguably given Apple an edge when it comes to integrating new capabilities such as DVD burning, but the Macintosh also has become a niche player in a Windows-dominated PC market.”
“Now RealNetworks CEO Rob Glaser and some others see the potential for history to repeat itself in the digital music world if Apple persists in keeping its software and hardware closed. Apple has taken some major steps to avoid past mistakes, notably making the iPod compatible with Windows PCs, dramatically expanding its potential market. iPod sales last quarter helped Apple triple its earnings compared with the same period a year ago,” Fried, Shim and Hines report. “Real also uses proprietary DRM, but it’s made little headway in the marketplace compared with FairPlay and Microsoft’s Windows Media Audio (WMA) formats. Notably, only a handful of portable music players support Real’s format. And with Apple riding a crest of iPod portable music player sales, analysts said RealNetworks faces the more immediate short-term threat.”
Fried, Shim and Hines report., “There are some good reasons for Apple to stick to its guns. The company sold 800,000 iPods last quarter, setting a new record and actually selling more of the digital music players in the quarter than it did Macs. Its music store, designed to be a breakeven proposition, posted a narrow profit as well. Adding software partners might not do anything to make its current products better, analysts say. ‘Integration is a huge reason why iPod has done so well, so I don’t see the incentive to open it up for anyone, including RealNetworks,’ said Tim Deal, an analyst at Technology Business Research. ‘Ease-of-use is clearly an important factor to the people buying iPods, so why would Apple want to put more hands in the pot and potentially create glitches that aren’t there today?’
“RealNetworks, in particular, would appear to bring little to the party. ‘The only way RealNetworks has a chance to become involved to a greater extent is if users express dissatisfaction over their ability to use other services with iPod, and we certainly haven’t heard much about that yet,’ said NPD Techworld analyst Stephen Baker. ‘I don’t see a tremendous amount of advantage to licensing Fairplay,’ said David Card, an analyst at research firm Jupiter Research. ‘Apple is a hardware company, and the only reason Fairplay, or even iTunes for that matter, exists is to sell and promote iPods,'” Fried, Shim and Hines report.
Much more here.
MacDailyNews Take: The answer to the headline is, “no.” If iPod holds a significant share of the market, there is no reason to let anyone into the party, as long as Apple’s iTunes Music Store offers similar content to the other stores. And iPod does hold quite a significant share of the market. This is not a matter of developers having to choose which platforms to support. The developers in this case are the musicians (in most cases shackled to the music labels). Encoding a song into AAC/Fairplay is just as easy as encoding in WMA. Musicians don’t have to rewrite each song for AAC or WMA. iPods demand AAC/Fairplay from an online music store (they also play MP3, MP3 VBR, Audible, AIFF and WAV formats). And consumers seem to be demanding iPods. Sorry, Real.