Apple’s iTunes Music Store dominance under attack?

“It’s no secret that Apple rules the digital music world. But does the maker of the iPod and the popular iTunes music store finally have to start worrying about tougher competition down the road? Apple has a comfortable lead in the online music market but some analysts think potential competition from Microsoft, Amazon and Google could put a dent in sales at iTunes,” Paul R. La Monica writes for CNNMoney. “Could be. In the next few months, the cable network MTV is set to unveil its own music store, dubbed Urge, in partnership with Microsoft. And Amazon.com is said to be in talks with the major music labels about developing its own digital music shop.”

“And in what might be the biggest threat of all, Google may enter the online music market. Although the company has not said anything publicly about plans for a music store, Google did launch an online video store in January,” La Monica writes. “Following that news, Bear Stearns Internet analyst Robert Peck wrote a report predicting that Google would roll out a music store, which he dubbed Google Tunes, in the next few months. There has also been speculation that Google could buy its way in to the market through a purchase of iTunes rival Napster.”

“Analysts say that Apple, which announced last month that iTunes sold its billionth download since the store’s launch in April 2003, has a safe, comfortable lead in online music for now. But the company is far from infallible,” La Monica writes. “And one media analyst said that even though music companies may be growing wary of Apple’s market lead, they still should be thankful for Apple’s presence in the market since iTunes at least allows music companies to generate real revenue from online downloads. ‘iTunes has almost single-handedly salvaged the economics of the music companies by giving users a legal alternative to file-sharing and for that, I think, music companies are grateful,’ said Laura Martin, an analyst with Soleil — Media Metrics, an independent research firm. ‘But over time there may be more competition from services that shift the power back to content companies.’ So it may be a mistake to think that Apple’s share of the music market can keep expanding indefinitely.”

Full article here.
Maybe. Might. Speculation. Set to unveil. If. Promises. Predictions. More speculation. More maybes. The whole article is useless pablum. Give us a call when and if somebody has something concrete. Here’s one example of why La Monica’s article is pointless: Jason Hirschhorn, MTV Network’s chief digital officer, “We think the iPod has done a great job. Our aim is not to switch people from iTunes and the iPod.” (Associated Press, December 13, 2005). Here’s another: Google spokesperson, “no plans to acquire Napster, nor do we have plans to develop a music store at this time.” (MarketWatch, January 31, 2006). So, what’s the point of La Monica’s insipid article again?

Sure it’s a mistake to think that Apple’s share of the online music market can keep expanding indefinitely. They already have most of the market.

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Related articles:
Oppenheimer downgrades RealNetworks based on Microsoft’s ‘URGE’ partnership with MTV – December 15, 2005
MTV-Microsoft URGE music service not targeting iPod, iTunes users; Real CEO PlayedForSure? – December 13, 2005
Google: no interest in Napster, no plans to develop music store at this time – January 31, 2006
Napster does the math: layoffs commence with 10-percent of workforce lopped off – January 25, 2006

51 Comments

  1. The more competitors in iPod clones and online music stores actually strenghtens Apple’s hand.

    It’s the same way Windows always seems to get stronger, despite how lousy it works.

    Everybody wants to go with the majority.

    The majority is iTunes and the iPod, and unless Apple makes some major mistakes or just fails to care anymore, they will always be numero uno.

  2. Yes Apple can stay number one. This will require it to continue to beat the heck out of the competition. It will be like running a race. Run harder, don’t stumble and stay ahead.

    But, the likes of Microsoft, AOL, Google, Sony, etc. will not just quit trying. Eventually they will establish a presence in the market. The market is just to big for them not to break in. It would be like all television staying with RCA; content, sets, broadcast, the whole gamut.

    Why not license iTunes and get a cut on everybody else’s (except Microsoft) head long, desperate move into the market? They are comming. We can still be Apple, make the best players and get a cut on the rest.

  3. do you mean by “license iTunes”? Do you mean Fairplay DRM?

    Someone will come up with a good store that effectively competes with iTMS. Someone will come up with a good player that effectively competes with the iPod. A key question is whether anyone will come up with both and match the integration of iPod/iTMS/iTunes (as player/organizer)…

  4. Blah blah blah, yawn…..

    licensing FairPlay would be a nightmare for Apple support and cutting the already thin margin slices even thinner ain’t gonna happen.

    The wannabes should be focusing on creative new things to help consumers enjoy their entertainment rather than being so obsessed with what Apple is doing.

    The whole NasDaq is down today and Appl road along, no worries, Apple products are selling well and when the results are in Apple will hit their guidance inspite of the Intel transition bumps and there’s green grass ahead.

  5. Apple won’t stand a chance once Wall*Mart enters the market.

    They did already?

    Well, when Target enters the… they did?

    Surely Apple can’t beat McDonald’s.

    Yup, its all over when McDonald’s enters the market. The one-two punch of McDonald’s and McM$ will deliver the final blow to that upstart Apple.

    You read it here first.

  6. ‘iTunes has almost single-handedly salvaged the economics of the music companies by giving users a legal alternative to file-sharing and for that, I think, music companies are grateful,’ said Laura Martin

    Does she think about those music companies that want to get more money from Steve Jobs while he says higher prices will bring back music piracy???

  7. Thank you for the comment what…

    I quess I think of the on line store and the DRM as one thing. Of course it is many things and many people. I see the distinction you are making.

    Three possibilites:
    1. License the DRM and face competition from both players and music “stores”;
    2. License the DRM with usibility only at the iTunes site; or
    3. Keep the three together (player, DRM, store) and maintain a separate universe from the rest.

    Right now we are doing very well keeping all three exclusively Apple. In the long run it will be Apple against everyone else. I predict this is so because I think everyone else will settle on a standard. There may be corporate blood along the way. If history is any lesson, they will arrive on a standard and Apple will be alone.

    I think, in order to compete against Microsoft in this it will be necessary to have allies. We will need other corporations within the Apple camp.

    I think to do this you have to let allied others build hardware certainly. Probably you have to let another store or two compete. Apple has the great head start. There is no reason the iTunes store should not remain the giant of the industry.

    I say licence the DRM, take a cut from everybody who uses it and compete with the hardware and the on line store.

    In this way Apple can continue to be the best at what it does and not, again, be left the odd man out at the big party.

  8. These folks ignore the main reason Apple got into the MP3/music business in the first place — none of the existing MP3 players or music sources worked with the Mac. If all these great manufacturers hadn’t bowed down to the Gates of Hell, and had made Mac-compatible versions of their hardware/software, it’s possible the iPod or iTMS would not even exist…

  9. Breaking News!

    Microsoft has officially announced to ActiveWin the release date of Windows Vista. Windows Vista will be made officially available to consumers in January 2007, while making Windows Vista available to businesses only in November 2006. In addition, there will be a feature complete Beta 2 CTP released in the next quarter. “…we need a few more weeks, quality is paramount…we are on the home stretch here…we need to know what kind of testing that needs to be done in order that this is the most secure and safe system” and “quality is till the top thing..and I am going to stay here until things are right…it will be done this year”, said Jim Allchin, co-president, Platforms & Services Division, Microsoft regarding the delay.

    As you know Intel is schedualed to release 64 bit Core Dual processors in November 2006.

    You’ll need a PC with DirectX 10 for maximum gaming use of Vista and all the 3D eyecandy.

    Of course Vista fixes a lot of the problems with XP, sandboxes IE, administrative accounts and other things copied from Mac OS X. It also monitors your system for any unusual behaivor from rogue programs.

    It’s the Mac OS X killer for sure. For those investing in Apple stock, this development is a serious blow to future Apple hardware sales.

  10. Doubtful MacDude, as everyone knows Leopard will kick the shiße out of Vista when it’s unveiled at WWDC and also there’s still the fact (and probability) that M$ will [once again] delay Vista because of something or other.

    Plus, in case they weren’t listening, buisnesses dont want to switch to Vista (at lieast not till ’08) Hell, half of them still use 2KPro (The best M$ OS to this day).

    And just what does this have to do with the iPod, iTunes, or Apple?
    Microsoft dosn’t scare Apple on darn bit….

  11. Hahahahahahahahahaha.

    “Urge”

    that’s hilarious. whoever came up with that one, i give 9432019043276843 sarcastic kudos…

    it’s true. someday, itunes will have to stop growing, but I find it hilarious that they have to call these new things having apple “under attack.”

    competition is only better for us.
    so i say, bring on the challenge.

    can’t wait…

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