John Borland for CNET talked to RealNetworks’ CEO Rob Glaser on the occassion of the announced end of RealNetworks’ $1 billion antitrust lawsuit against Microsoft. Microsoft has agreed to pay RealNetworks $761 million and promote Real’s “Rhapsody” music service via MSN. Borland asked Glaser, “How do you think this positions you and Microsoft jointly against Apple, at this point?”
Glaser: With regards to services for consumers, which is our focal point, I think it positions us both extremely well. I think the missing link, at this point, is hardware that a consumer finds compelling, in terms of the portable-music category. For the portable space, I think it’s fair to say that the iPod is still the best product. I think we and Microsoft have an incentive to work with the hardware community to create better solutions than have been created thus far, and I think we’ll do it, but I think that is something that plays out over time. This Christmas, the iPod will be the biggest seller, no matter what, and I think odds are good it will be the biggest seller next Christmas. I’m hopeful that next Christmas, by ’06, there will be a worthy competitor from the device side, but we have to get our brethren in the hardware business to help us on that one.
Full article here.
In another article for CNET, John Borland writes, “Indeed, if the settlement of RealNetworks’ $1 billion antitrust suit against Microsoft represents the closing of a chapter for both companies, their simultaneous alliance on Internet music shows how completely the digital landscape has changed for each in the past few years. It is now Apple, and its seemingly unending stream of digital music successes, that threatens the future for both Microsoft and RealNetworks.”
Borland writes, “Whatever its impact on RealNetworks and Microsoft, the deal is unlikely to change the dynamics in the broader digital music market anytime soon, analysts said. Apple’s iTunes music store, and its iPod music player each retain more than 80 percent of their respective markets. That dominance has been locked into place by consumers’ ongoing love affair with the iPod, and rival MP3 manufacturers’ inability to create a similarly popular product… The settlement ‘doesn’t change the dynamics for Apple in any way, shape or form,’ said Jupiter Research analyst Michael Gartenberg. ‘If they weren’t concerned yesterday, they don’t have any more reason to be concerned today.'”
Full article here.
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In the digital music market, the Apple locomotive cares little if the Microsoft cow on the tracks has picked up a Real flea or not. There won’t be any less or more cowbell at impact. As usual, Glaser’s opinion of his company’s importance is as over-inflated as his…
Microsoft-RealNetworks alliance ready to take on Apple in online music market? – October 11, 2005