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Guardian UK Looks At Potential Battle Between Apple, Sony, Microsoft

by , 4:30 PM EDT, July 26th, 2004

The Guardian (UK) has published a story looking at what the newspaper says is a brewing war between Apple, Sony, and Microsoft for music downloads. As part of the story, the Guardian points to unconfirmed and unsourced rumors that Microsoft is going to enter the market for music downloads after all, and is prepared to spend millions of dollars in marketing the effort. The article describes a format war between Apple and Microsoft (in particular) as potentially being a nightmare clash for consumers. From the article:

But the music industry is rife with speculation that Microsoft will announce before the end of the year that it is opening an online store to compete with Apple's iTunes Web site. It raises the prospect of an all-out battle between Gates, dubbed one of the world's richest geeks, and Apple co-founder Steve Jobs, described as 'the first rock star of the technology business'.

[...]

Simon Dyson, an analyst at Informa Media, which has just published a report on the market, warned: 'At the moment, compatibility doesn't matter because the majority of songs can be ripped from CDs or downloaded illegally. But as soon as digital downloading really takes off it's potentially problematic.

'If Microsoft becomes the biggest download site, and it is incompatible with the biggest player, the iPod, that's potentially ridiculous. It would be a nightmare.'

There's more information in the full story, which we found to be an interesting read.

The Mac Observer Spin:

We aren't sure that a format war will be a nightmare clash. The reality is that if format issues become too troublesome for consumers, they will go back to buying CDs, or in some cases, simply stealing their music. The market is quite likely to be able to deal with format clashes between Apple, Sony, and Microsoft by leaving one or the other as the uncontested leader.

This is particularly true if Apple or Microsoft attempts to sign artists as exclusive properties in perpetuity, as the Guardian suggests. We don't think that consumers, labels, or artists will be interested in being held hostage in such a manner.

We could be wrong about that, but so far there is, in fact, one uncontested leader in this market, Apple. This, with competition from Sony, BuyMusic, Napster, and a host of others using competing formats. Can Microsoft turn the tide with its enormous resources and monopoly power in operating systems by directly entering the market? Perhaps, but then again, perhaps not.

Observer Comments

Show: Subjects Only | Full Comments
Close Name:Billy K Posts: 297 Joined: 06 May 2004
Subject: MS Monopoly

Their deep pockets haven't helped them much in the gaming console war.

Close Name:mahuti -   TMO Staff Posts: 371 Joined: 09 Jan 2003
Subject: Yeah, but

They might not be the uncontested winner, but they seem to have done pretty well versus another established giant, Nintendo.

Close Name:Billy K Posts: 297 Joined: 06 May 2004
Subject: Yeah, but

They've done OK against Nintendo, but that's because Nintendo shot itself in the foot long before X-Box existed. Nintendo's weakness was probably what got MS in the gaming game anyway.

They have not done very well against Sony (who can barely seem to face foward with many of their products).

Supposedly, MS loses money with each X-Box sold. I don't know if that's true, but regardless, their cash surplus is the only thing keeping them in that game. They can afford to stick around and hope their product catches fire. I expect them to do the same - and fail - in Digital Music. They just don't have "it" when it comes to entertainment offerings

Close Name:kenaustus Posts: 602 Joined: 27 Jun 2003
Subject: MS & Sony face a challenge

Both have to come up with an elegant design and the iPod makes that very difficult. Look at the new iPod and try to figure out how that can simplified. Didn't work for Sony. In terms of hardware there needs to be something that is cheaper and "better'. Very difficult.

In terms of software Sony is already behind The Music Store in terms of design and will take a few years to catch up. MS will probably come up with their usual mess, even when Apple has shown them how to do it.

Apple has delivered a fully integrated ELEGANT design that has exceptionally strong acceptance world wide. That's why they lead. The "others" are going to try to come out with "something" and the more that try the more fragmented the "others" group will be. It's going to be exceptionally to catch up with Apple - especially since Steve Jobs has no intentions of standing still.

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