Amazon’s new MP3 store is anything but bad for Apple

“What’s that? Amazon opened a music store? Oh, OK. (Resumes snoring),” Time Beyers writes for The Motley Fool.

“Nine of the 10 best-selling MP3 players at Amazon are iPods. That’s why you’re not seeing Jeff Bezos chatting up alternatives from SanDisk or nearby Microsoft,” Beyers writes.

“Chances are those tracks will be downloaded into one of the 110 million or so iPods out there today,” Beyers writes. “Bezos knows that; he’s no moron. And he knows that Apple doesn’t need him for distribution. Would CEO Steve Jobs pull the iPod from Amazon’s digital shelves? Probably not, but it’s enough to know that he could.”

“More than 3 billion songs have been sold via the iTunes store. Assuming Apple retains no more than $0.05 to $0.10 per song, that’s roughly $150 million to $300 million in revenue over four-and-a-half years of sales,” Beyers writes. “By contrast, the iEmpire [Apple] collected more than $22.6 billion in revenue over the trailing 12 months alone.”

Beyers writes, “So let’s take Amazon’s $0.89-a-song-strategery for what it is: great for consumers. And anything but bad for Apple.”

More in the full article, including four of Apple’s primary advantages when it comes to the iPod, here.

88 Comments

  1. Besides the prices difference Apple does not sell MP3’s. They have from the very beginning been using the AAC codec which is .m4a. I am quite picky about my sound considering the massive system in my car. I will never run an MP3 through a 1500watt stereo system. The AAC codec does half the file size for the same quality MP3. A 128kbps is the same quality as a 256kbps MP3. And for anyone who is going to say there is no difference. Run it through a massive and clean stereo setup. The bass line on an MP3 is crap and can kill your subs. The encoding on the .m4a is much better and retains the bass line from a CD, I have played both a CD and the .m4a file at competitions and no one can tell the difference. The tracks are higher quality, they might be higher priced, but you know what. When I can show off a stereo system running off of an iPod and not a CD, I will stick with higher quality, and the only true player that plays all open standards. And .m4a is a standard file that any music vendor could go with. MS should fire the person that came up with wma as I have never encountered a worse format than this, except for maybe the atrac format, ugh Sony. I have also tried the Amazon browsing interface, and quite frankly it sucks something fierce, sorry. I have to give kduos to Apple, they will reign supreme for just a bit longer I beleive

  2. Of course it’s not bad for Apple. But that’s not the point. Amazon’s site is terrible news for consumers because, if successful, it allows the record companies to regain control over pricing. Pay 89 cents instead of 99 cents now and you will pay a lot more later on for album bundling and variable pricing. Record companies control competition in distribution, and with Amazon watermarking, they will try to shut down the real competition of file sharing.

  3. More in the full article, including four of Apple’s primary advantages when it comes to the iPod, here.

    Are you kidding me? The iPod has advantages over other MP3 players? Don’t waste your time clicking on that link. My 3-year old Dell Ditty runs circles around the latest iPods. And as far as Amazon’s new MP3 store goes it’s a bust already. Why? No WMA files. Zunes, Dittys, Zens, Sansas all can play the magnificent WMA format. WMA is better because Microsoft developed it with the same attention to detail and care that they put into Windows. And Office. MP3 is a lost cause when the future is WMA. Whatever.

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