Analyst: Real and Microsoft deal ‘doesn’t change the dynamics for Apple in any way, shape or form’

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…

Related articles:
Microsoft-RealNetworks alliance ready to take on Apple in online music market? – October 11, 2005


  1. So let me get this straight, those in “competition” are counting out Christmas ’05 and ’06. Don’t they realize, the more iPods on the market the more solid the foundation. Oh well…

    Calculating the speed at which I changed from 8 tracks -> tapes -> CD -> iTunes, iTMS has about 10 years as top dog. Then take into account that iTunes is pure digital and with firmware ultimately flexible, as long as they stay ahead of the quality curve – there is no reason they should fall. A new physical media format comes out, they just allow me to burn it. Then again, plug in my iPod where ever I go: home, car, computer, work, bathroom.

    I agree with many analysts, the physical purchase is gone. As is the CD. You cut a song, you release it. No need to fill a CD with songs that weren’t your best. Now they just won’t sell. You want every song to sell? You better release an album like Green Day’s latest.

  2. “Glaser: With regards to services for consumers, which is our focal point…”


    Real’s only ‘focus’ is on: a) corporate investors (in order to supply them with enough cash to get ‘b’) and on b) buying Krispy Kreme doughnuts.

    Glaser: “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.”

    Translation: “Please, PLEASE, God, let their be a ‘device’ manufacturer to come up with SOMETHING that will steal the iPod’s thunder. We need it We want it. (In their best James Brown impersonation) We got to, got to, have it!”

    Poor Real; poor Rob… consigned to be Bill Gates’ bitch for the rest of his life.

    MaWo, ‘ahead’. As in, ‘Rob should have thought a little further ahead before getting into bed with Mafiasoft.’ Slut.

  3. By the time these guys have a decent hardware solution, the whole world will have hundreds of songs that are locked into Apple’s DRM and will have no interesting in switching over. What fools.

    Am I concerned about being locked into Apple? No, because I know Apple will continue to innovate and bring out new, cool products. Unlike Microsoft, who quits innovating once they control the market in anything (think IE).

  4. The easiest solution at the moment Jack is to simply re convert your files through iTunes into generic mp3s or ac3/acc ?? whatever you like. This will future proof yourself if you have to jump ship to another player. A hassle I know, especialy if you already have hundreds/thousands of songs but it is doable.

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