IP Democracy: Apple's Secret Weapon in the Online Music Wars: iPod

Nary a week goes by without some kind of major announcement in the online music sector, with web music options proliferating at a heated pace. Business Week’s Catherine Holahan has a good round-up of the recent spate of “iPod wannabes,” from MySpace to AOL to Samsung to SpiralFrog.com.

Despite the explosion of choices, don’t expect the undisputed leader in online music, Apple Computer, to feel much pain any time soon. Why? Because Apple has the iPod, the must-have iconic device for music fans and it will work, for the most part, only with iTunes.

A big reason for bullishness on Apple’s prospects: the iPod. Apple not only dominates legal music downloads, but also the handheld devices on which they’re played. The company has sold more than 50 million iPods around the world and except in the case of MySpace, songs downloaded through non-iTunes players won’t work on the iPod. Until a new player compatible with these services gains popularity, it is unlikely that massive numbers will switch their music buying habits, says Mulligan.

Apple’s genius is to have created the ultimate razor, which works only with its razor blades. If you want one, you have to get the other, and vice versa. That’s why the issue of Apple’s proprietary DRM is such a flash-point in Europe — consumer groups there want to bust up this cozy and profitable relationship.

Posted by Cynthia Brumfield on September 5, 2006 11:45 AM to IP Democracy