“In 1985, Bill Gates wrote a memo to Apple Computer, saying it should license its Macintosh operating system. Gates offered to help Apple find hardware partners with the aim of making Mac OS a standard. This would, of course, have created a much larger market for Mac applications, of which Microsoft was the leading supplier,” Jack Schofield writes for The Guardian.
“Recently, Rob Glaser, the founder of RealNetworks, has been sounding a similar warning about the digital music business, where Apple is the current market leader. He also wrote privately to Apple’s boss, Steve Jobs, suggesting an alliance against Microsoft – a letter that Apple somehow leaked to the New York Times,” Schofield writes.
“Both Apple and Real run music download services, and both use the standard, patented AAC (Advance Audio Coding) file format, but they use different copy-protection or DRM (digital rights management) systems. Thus, iPod users can only play licensed music if it is downloaded from Apple’s own music store: they cannot play music downloaded from Real’s music store. According to the New York Times, Real wanted to license Apple’s Fairplay DRM in exchange for making the iPod its preferred portable player,” Schofield writes.
“It’s not clear why Apple rejected this idea. It would provide iPod users with another large source of music downloads, increase Fairplay’s market share, and encourage sales of iPods. Real’s Rhapsody service would obviously compete with Apple’s iTunes Music Store, but Apple makes little, if any, profit from 99c (55p) music downloads. Its strategy is based on selling iPods, and Real’s proposal would surely help with that,’ Schofield writes. “Either way, rejecting the proposal makes Apple look proprietary and anti-competitive, and leaking the letter makes Apple look untrustworthy. Both of these are bad for Apple.”
Full article here.
MacDailyNews Take: Schofield just doesn’t get it. Again, we will repeat: 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 unfortunately 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.
Also, Microsoft has a big problem here if they want to do the “music thang.” iPods don’t do WMA. Apple is currently selling iPods at the rate of more than one every nine seconds. Microsoft’s desktop monopoly cannot help them here. Do not be afraid, Jobs knows what he is doing; and this has nothing whatsoever to do with 1980’s OS wars.
An interesting side note: If Apple holds approximately 2% market share for personal computers based upon last quarter’s Macintosh sales, think about this: Apple sold slightly more iPods than Macs last quarter. What is the iPod? It is a platform itself. It contains an OS, a hard drive, input devices, a display screen, input and output ports, etc. iPod is a computer. So, in reality, Apple’s “computers” (Mac and iPod) now hold over 4% of the personal computer market. And Apple’s iPod controls over 50% of the MP3 player market (source). “Developers” will want to make damn sure their wares play on iPods, won’t they?