Microsoft manager: people will get frustrated with ‘closed ecosystem’ of Apple iTunes

“Though Apple has been the undisputed leader in the market–and has done better than some would have thought a year ago–online downloads still represent a small part of how people get their music. File-swapping services continue to be popular, and CD sales have started to show some signs of life. Apple itself had predicted it would distribute 100 million songs by the time the one-year anniversary rolled around, a goal the company seems likely to miss,” John Borland and Ina Fried report for CNET News.

“To date, rivals like Napster and Musicmatch have fallen far short of Apple’s sales. According to the NPD Group, Walmart.com’s cut-rate pricing has come closest, drawing about half the number of customers seen by iTunes in March,” Borland and Fried report. “Analysts say that although many of the new entrants to the market could pose strong competition, Apple will continue to benefit from the fact it has sold so many iPods–devices that work only with Apple’s service. Last quarter Apple sold 800,000 of the portable music players, with rivals such as Dell and Samsung selling only a fraction of that total.”

“‘Apple set the bar incredibly high,’ said Mike McGuire, an analyst with GartnerG2, a division of the Gartner research group. But some rivals said they expect Apple’s dominance will be temporary. ‘Apple is probably still riding the wave of their initial launch,’ said Jason Reindorp, a group manager in Microsoft’s Windows digital media unit. ‘They have spent an inordinate amount of money to generate awareness around their closed ecosystem. (But) as people get more sophisticated in this area they are going to be getting more frustrated with a closed ecosystem. I think the market will kind of self-correct as things get more mainstream,'” Borland and Fried report.

Full article here.

MacDailyNews Take: Microsoft and Real are now using the same “talking points” memo. Will it work?

Related MacDailyNews article:
Real’s CEO Glaser: Apple’s iPod/iTunes combo ‘threatens to turn off consumers’ – April 20, 2004

26 Comments

  1. Yes, I have an iPod and I am tired of the closed ecosystem. I sure wish that I could use an online music service made by someone else that has a lower quality interface, and where the songs are encoded in a lower quality format, and where I have less songs available, and where the songs still cost me the same amount of money even though I would only be renting them, not buying them.

    Yes, I am sure this is what the public is saying.

  2. Borland is right. People are getting frustrated with Apple. Borland is frustrated, Microsoft is frustrated, so is Real, Walmart, Napster, Sony, and the list goes on…

  3. “(But) as people get more sophisticated in this area”…people will realize that AAC is better than wma and doesn’t tie people into the m$-based bloatware

  4. If all these competitors of Apple are so convinced that Apple’s music business will fail, why are they spending so much time saying so? They can’t possibly have everyone’s best interest at heart! I think it is wishin’ an’ hopin’.

  5. Yea people are getting frustrated with the closed ec-system of Napster, Buymusic.com, walmart, Real. They want something that just works, not some off the wall hurry up and pay me then wait for your crap.

    What’s really Funny is that MS thinks Apple is closed, well MS system is far more F—ed up than Apple’s. Apple one price, one set of rules protecting music, everything works.
    MS, price varies, each song can have it’s own rules making keeping everything straight a PIA, it only partially works.

    Now we get to watch MS blow a ton of money on another loser project. First Xbox, then Tablet PC, now portable media center. You can use the iPod while driving, you can’t watch TV. You can use the iPod while working, you can’t watch TV. You can use the iPod while dancing, you can’t watch TV.

    If it’s still holding true MS loses money on every Xbox, for the price of a Tablet PC I can buy a 12″powerbook and get more power and better functionlity. I do like the form factor of the Tablet’s, but it’ gonna be another five years before MS gets one that right. Apple might do it in 2-3 years if they join that market. Battery life sucks, most screens are indoor only, all of them using the Pentium M get to hot to hold. To top it all off a screen that gets filled up with a taskbar. Apple’s menu system at the top of the screen starts looking real good.

  6. the thing these ‘critics’ forget is.. apple simply cannot produce the damn ipods fast enough.. the last thing it needs right now is more services that work to sell the ipod (hint: the reason for itunes store’s existence)

    until there’s another store that is profiting 1/10th what apple is from their own grungy websites, there is nothing to talk about: Apple’s music venture is a smashing success.

    In fact.. their computer sales went UP too..the only problem.. as thurrott will point out (besides the fact that more people threw out their dells..and bought MORE dells lmao faster than apple can even produce macs) is that the apple notebooks are so good that apple desktop numbers are trending down…

    of course.. thurrott enjoys playing with numbers..

    check internet-nexus for some fun stuff.. i hear the death knell from master thurrott again.. apparently, after getting ripped off on pretty much every idea they’ve ever had.. apple is still a one trick pony (according to sony..who rips off their designs on desktop/notebooks) in… it’s latest venture (?!?) the music player.

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