Analyst: Apple must not ‘sound anti-consumer’ in the face of Real’s ‘Harmony’

“What do you get when one company aligns with another company, against the second company’s will? You get a situation resembling the story that broke Monday, when Real Networks debuted its Harmony software, which lets users of Real’s digital-music service play their downloads on a number of new devices, most notably Apple’s iPod,” Eric Hellweg writes for CNN/Money.

“‘There’s probably a certain amount of broken furniture at Apple headquarters,’ says Josh Bernoff, an analyst with Forrester Research… Apple may yet decide to challenge Harmony in court, but it should carefully think through the consequences: Harmony may actually prove beneficial to Apple and the industry as a whole,” Hellweg writes.

“Obviously, this isn’t the way Apple wanted to let people into its iPod system, and it forces the company to face a crossroads that wasn’t in Steve Jobs’s master plan. The question the company now must answer is, is it strategically more important to preserve its closed system, or is the iPod the future profit machine for the company,” Hellweg writes. “‘They need [an answer] that doesn’t sound anti-consumer and yet preserves the system they’ve built for themselves,’ Bernoff says. ‘I can’t think of a response that satisfies both of those requirements.'”

Full article here.

MacDailyNews Take: Apple should drop kick Real ASAP and nip this in the bud. What Real did sounds illegal; perhaps it’ll be up to the courts to decide, but Apple could require a firmware update and immediately stop ‘Harmony” in its “tracks,” so to speak.

49 Comments

  1. I want my mp3 player to play music I purchase from ANY online store. I hope Harmony survives but I don’t hold out any hope for that. I do think, however, that now that iPod consumers know freedom is possible, they will want it (at least those not suffering from Tech-Stockholm Syndrome).

    Listening to: The Walkmen, “We’ve Been Had.”

  2. Apple should walk up to real with a threat of lawsuit under the DMCA, and give them an option of legally getting a license for fairplay, with a small fine(or a larger license fee)

    That way Apple can either show the world the evil of the DCMA, or expand their ong collections, and their marketshare.

    Real get’s what it wants one way, the other Real is gone. But Real is gone if it doesn’t hook up with apple anyway. So for Real it’s crunch time.

    i actually Hope Apple licenses Fairplay, I would rather have Fairplay DRM over WMA DRM. Like a presidential election it’s the lesser of to evils.

  3. what real did is just stupid. no matter how bad you want to liscense some kind of technology, you have to get permission, you can’t just go out there and find a work around, especially under the DMCA. I don’t fully agree with the DMCA, but hey, it’s the law right now so as a large corporation, you should follow it. If apple doesn’t go after real ASAP, what sort of precedent woudl that set? What if someone did this to M$? Don’t you think they’d sue the pants off them?

  4. I agree with MDN – but Apple might have a tough time of it in court. What’s the difference, for example, between what VirtualPC does and what Harmony does?

  5. Personally, I don’t know if Real broke the law, that’s for the courts to decide. But there definitely is a pro-consumer reason for Apple to disable Harmony.

    Let’s say Apple just lets Real go and disribute Harmony and lots of people use different music stores on their iPod.

    Apple doesn’t know how the underlying Harmony technology works and Real doesn’t know how iPod’s operating system works.

    Apple releases an iPod update completely unrelated to Harmony. People who have Harmony-based music on their iPods have their iPods lockup. Who foots the bill for their repair? Apple. People will blame Apple for not having ease of use and for their iPods being defective.

    In light of this, for competitive reasons I think Apple should shut down Harmony but license Fairplay. Once people know they can use other music stores they may not want to go back. Apple will get the licensing fees and hopefully ensure full iPod compatability and Fairplay NOT Harmony will become the defacto standard.

  6. I agree with Jiaqi Li.

    I also have another question that has been bothering me: How many times have you heard, or said yourself, that you want to be able to buy a song from the RealPlayer Music Store, or Napster, or Musicmatch, or OD2, or My Coke, or Wal*Mart?

    Since any of these stores have opened, I cannot recall ANYONE ever saying that they want to buy from a different store. Why complain now??

  7. Though Real has taken the dirty route to get into the iPod market, I think that Apple doesn’t need to make itself look like an arse while defending its crown jewel. I fear backlash from the otherside if Apple is made to look like the bad guy. You and I both know that C|Net will be all over this just to make Apple look bad, I mean, look at the latest article on ” What will the next iMac look like?”, they’re really picking on Apple with quoting John Doe users and all. In short, C|Net goes out of their way to make Apple look bad if the opportunity knocks.

    I just hope Apple does the right thing.

  8. VirtualPC doesn’t require a copy of Windows: it emulates a PC, not a Windows system, so you can install any OS in it, be it Windows, Unix, OS/2, whatever.

    Also: what Real has managed to do is the equivalent of Compaq cloning the IBM PC BIOS, and all of you know how important that was long term.

    My hope is that Real can get away with it.

  9. A couple of thoughts:

    1. Real claims they did not reverse engineer. They claim they used publicly available sources – likely things like playfair and hymn – to figure out the Fairplay DRM.

    2. Even if Real is found to have reverse engineered, there is some legal precedent for “reverse engineering for the purpose of compatibility”, which is what Real will claim. Razor blades and printer cartridges come to mind (Lexmark sued over the latter). There really hasn’t been many cases over this issue so the precedent is not solid. However, there is no legal precedent for licensing to others the technology developed through reverse engineering, which Real is thinking about doing.

    So an Apple suit is not a sure win for Apple. I think that’s why Apple is still investigating the legal implications.

  10. Juanxer,

    You completely missed the point. The point is that Virtual PC by itself gets you nothing. You still need to get a copy of an OS.

    Even before MS owned Virtual PC, every copy of Virtual PC sold to emulate Windows came with a real copy of Windows – certificate of authenticity and all. So MS still received payment.

    Harmony does not require a copy of Apple’s Fairplay.

  11. If you own an iPod, why do you want to buy from Real? There’s one thing, though, that Real has and Apple doesn’t: a subscription service. Some people may want this option, as it let them try out different music before actually buying them. Also, Real uses a higher bitrate AAC. So Apple should add these two things to its store (an optional subscription service and use a higher bitrate AAC) and only then can Apple really pose the question: Why would anyone go Real? Steve has said again and again that people want to own their music. Granted, but some want to get familiar with music first (and iTunes is a far better place to do this than listening to radio) and then buy the music.

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