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.

The Guardian Article