“Steve Jobs wants the music business to drop restrictions for digital tunes. But Microsoft, which began competing head to head with Apple in the digital music business last fall, is happy with the way things are, says media exec Robbie Bach,” Dan Frommer reports for Forbes.

Frommer reports, “On Tuesday, Apple chief Jobs suggested that the music industry stop forcing online music services like his iTunes to use software that restricts what people can do with the music they purchase, such as sharing it with friends.”

Robbie Bach, president of Microsoft’s Entertainment and Devices division, spoke with Frommer and drops such gems as:

• Apple’s iPhone “doesn’t really change things for us in any fundamental way… Our view is that our strategy is more the correct one. People think, ‘Gosh, I need a device that works in my work style and my lifestyle,’ and the fact that we’re strong on the business side and have all the lifestyle capabilities like music, like video, like text messaging–all those kinds of things, we think give us a big competitive leg up.”
• Apple’s iPhone is “$500 and a two-year contract… But at that price point, the size of the market you’re going to reach is going to be relatively limited. That’s not a knock on Apple–they’re going to drive the price point down just like everybody else does. But most people would have said, ‘Hey, we’re not ready to have a $500 phone.’ When you look at something like a Motorola Q or a Samsung BlackJack or a T-Mobile Dash, you say ‘for a lot, lot less money, I can get that functionality today,’ and maybe that’s the direction more people will go.”
• Zune Phone? “Right now, I can tell you that the Zune team is really focused on producing great innovation in the music device space… I wouldn’t expect there to be much focus beyond what we’re trying to do in the core music space.”
• “Today’s Zune continues to sell well, and we’re continued to focus on things we can provide to those customers. Obviously the team is working on things for the future.”

More in the full article here.
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