Guardian writer thinks Apple must open iPod or Microsoft will eventually own market

“Apple announced outstanding financial results last week, thanks mainly to a 500% increase in the sales of iPod music players compared with the same quarter last year. However, last week also saw the launch of the Microsoft-led Plays For Sure logo programme, which highlights the compatibility of rival players, and rival music download services,” Jack Schofield writes for The Guardian.

“The question that has already achieved cliche status is whether Apple will be able to maintain its overwhelming share of the protected digital music market when it expands beyond the minority of well-off and ‘cool’ people into the mass market,” Schofield writes. “Having sold most of the first 10m portable devices, will it be able to sell most of the next 300m?”

“When Microsoft co-founder Bill Gates spoke at the launch of Plays For Sure in Los Angeles last week, he showed a range of players including Creative Labs, Dell, iRiver and Samsung models. The Plays For Sure website also highlights the fact that consumers have a choice of download services, such as Napster, MusicNow, MusicMatch and Wal-Mart, not just MSN Music,” Schofield writes. “Apple still has time to license its system, and make companies such as Virgin friends rather than foes. If it doesn’t, it is probably just a matter of time before Microsoft’s system has enough support to become the de facto standard, just like Windows.”

Full article here.

MacDailyNews Take: See related MacDailyNews articles below.

Related MacDailyNews articles:
Microsoft unveils ‘PlaysForSure’ logo which signifies incompatiblity with Apple iPod and iTunes Music Store – October 16, 2004
BusinessWeek writer can’t figure out that comparing iPod to Mac licensing is fruitless – October 14, 2004
The iPod is not the Mac, so stop trying to compare them – August 13, 2004

34 Comments

  1. Well what is the deal with licensing FairPlay anyway? I mean has not Apple said that they are willing to do so? What are the terms, why are the companies not lining up to license it. Surely if HP can negotiate a deal others can. Then again MS maybe telling companies “if you go with Apple doom will befall you”.

  2. What an idiot!!! The same logic can be applied to the theory: M$ must open Windows code or Linux will eventually own the market!!! What a stupid idiot!!!! If he is the CEO of any company, that company is doomed!!!!

  3. What people like Schofield, Enderle, Thurrot et al fail to comprehend is that this isn’t a computing standards battle, but it is a battle which concerns content and experience.

    All of the stores pretty much sell the same content – although it could be argued that iTMS actually has more – which then make the battle for hearts and minds one where the user experience is the key.

    Sadly, this is where having seventy players, all the stores in the world, and five different applications just to manage your music simply doesn’t make sense.

    In the real world, I frequent two ‘bricks-and-mortar’ stores (HMV & MVC) simply because I know exactly where everything I want to buy might be – it is this familiarity and consistency of experience that iTunes and iTMS attempts to replicate.

  4. Well, I scooped MDN on this story… in another thread here… and now….heres a story on Jeff Raskin (the father of the Mac) … trashing the OSX experience… calling it .. “..a mess…”…

    Will MDN post this story later as well ??

    hmmm we’ll see..

  5. they are all valid concerns, but Apple needs to stay on top of things, recognize shifts in the market and move aggressively. if not, MS will own the market and Apple will again misstep and be bound to historical fates.

    i hope not, and i feel Apple is going in the right direction, now. but it needs more partners.

  6. And some other things�

    Number of iPods sold (July-Sept, ’04): 2,016,000

    Number of days to sell first 50 million tracks through iTMS: 318 (28/04/03-11/03/04).

    Number of days to sell second 50 million tracks: 123 (11/03/04-12/07/04).

    Number of days to sell third 50 million tracks: 94 (12/07/04-14/10/04).

    Now Apple controls around 70% of the legal download market, and the legal download market represents around 0.7% of the total music market.

    So music consumers are making a choice, which is as follows�

    When they want to convert their existing music collections, they are doing so using the most well-engineered player on the market, combined with the best ‘free’ jukebox application.

    When they want to buy digital music, they are choosing iTMS 70% of the time, with the next nearest competitor having only 11% of the market.

    People who have large legacy CD collections have no reason to repurchase digitally�so why does Apple have to open up anything to anyone.

  7. jef raskin is disgruntled – muscled out of apple via politics.

    he has not done anything since then. he has/had great ideas in usability and interface design and i reference him a lot, but only on a surface level.

    he is out of touch with today’s workflows and processes and just seems to whine a lot lately, which is sad, i still have respect for the man.

  8. This guy, like most other journalist/analysts just doesn’t see the whole picture.

    Consumer loves iPod.

    iPod works ONLY with iTMS.

    Over the course of an iPod’s life, consumer buys lots of music from iTMS which is AAC/Fairplay format.

    Eventually, iPod needs to be replaced. Consumer has the choice of buying an iPod competitor which WILL NOT PLAY THEIR AAC/FAIRPLAY files forcing them to burn and re-rip their entire downloaded library, which by this time has grown to hundreds of songs, OR buy another iPod which seamlessly plays their existing collection.

    What will consumer do?

    Buy another iPod.

    Essentially the way Apple is doing it now, the consumer gets locked into the iPod in the future unless they feel like burning and re-ripping. Now this might be seen as a dirty trick, and if it were done by any other company it might be. The difference is, Apple is offering the best experience, and I haven’t seen anyone (except MS employees) say otherwise.

    Keeping it closed is Apple’s best move for the future. And if anything should change, it would seem they have the ability to allow WMAs to play with a simple software update.

  9. As long as the iPod/iTunes stay visible to the pulic and available it won’t matter much that you can buy hundreds of other players.

    In time the other players will improve and at some point in the game Apple should open up the DRM to other players and/or music stores. But, like WMP 10, all should be directed through iTunes.

    I can see Jobs telling Creative & Rio they can have iTunes support as soon as they drop WMA support. I can see MS doing the opposite – if you go with Apple you can forget about WMA.

  10. It’s no where NEAR time for Apple to license FairPlay and especially NO WHERE NEAR time to enable WMA on iPods/iTunes. Way to early. No need to jump the gun.

    Apple has to get QuickTime installed on as many PCs as possible using the allure of iPod/iTunes. And it’s a GREAT strategy. That’s the real trojan horse.

    Don’t fool yourself into thinking that MS wants to license FairPlay at all. That would essentially require licensing and installing QuickTime as well. No way MS does that; they want to keep QT off Windows at all costs. They would only be interested in iTunes/iPod supporting WMA. Don’t you know Microsofties sh#t themselves everytime they think of millions of Windows users enjoying their digital music via the QuickTime engine that drives iTunes. THAT’s the real threat that MS is facing. I’d bet that the driving strategy to create their own music site at all is to ebb the flow of QT downloads that accompany iTunes.

    No – Apple needs to stay the course. They have got to sneak in a few more million QuickTime installations. That opens up a world of future possibilties. (BTW – a rumored iPhoto for Windows would also likely sneak in a QT download.)

    SSShhhhhhhhhh – it’s working. ” width=”19″ height=”19″ alt=”wink” style=”border:0;” /> Sit back, watch and enjoy.

  11. Microsoft are really lost in the media world.

    What are music players supposed to be compatible with? Each other? The Microsoft argument makes no sense – and DOUBLY no sense if the music industry wants to dissuade music sharing.

    If the ability for file sharing was the cause of Mac’s decline with the arrival of Wintel, it is it’s VERY STRENGTH with iPod and iTMS.

    The only other argument Microsoft can offer is ‘ease’ of buying music online – but iTMS is far and away the most well-stocked and easiest to use online store and Microsoft don’t have the control over these markets in any way that can change this – which, I imagine, must be very frustrating for a company used to bullying it’s way to the top with inferior product.

  12. It is been stated that the iPod can play WMA files, but it is just turned off. Right now there is no reason why Apple needs to do anything differently. If Apple’s market share actually was threatened, Apple could either license Fairplay or simply allow WMA files to work on the iPod. It is not that difficult. Apple will continue to do well and Jobs has two options to fall back onto.

  13. Since the player market is so new, there is no way to predict which will be the profitable end of the market: the razor or the blades. It could be we get to the point where the player market becomes a commodity market, while the money is to be made is selling tracks. Or it could be that selling tracks stays a break even proposition no matter the volume of sales.

    Apple won’t let go of either end until it knows which will be the commodity market and which will be the annuity (constant revenue generating) market.

    I don’t have a problem with Apple not licensing Fairplay to other players/online stores. However, Microsoft is also putting their product in amplifiers, speakers, TVs, etc.–the accessory markets.

  14. I think what Steve Jobs said was totally corret:

    “Why should we open the ipod up to WMA when we have the dominant market share”.

    I agree with this because there is nothing to gain by doing it – it only allows M$ an open door to the market share.

    The other thing he said was that “If our market share drops to less than M$ -then I may consider opening the DRM to play WMA fotrmat”

    This I totally agree with too – because in that situation M$ would have won the music format war and APPLE would be in a loosing position anyway.

    I feel that APPLE should make as many partners as possible – car companies, mobile phone companies etc so that it’s format can be played on anything BUT all these devices MUST access Itunes to do it!

    On another note: WHY THE HELL DON’T APPLE PRODUCE TV ADVERTS FOR MAC OS X!!

    FOR GODS SAKE – SELL THE OS X ON PRIME TIME TV AND GET PEOPLE TO REALISE!!!

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