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The Back Page - Apple Death Knell #50: Microsoft & Google to Squeeze Out iTunes

by - April 3rd, 2006

Apple's dominance in the music and (U.S.) video download market is near absolute, but Microsoft, Google, and cell phones are going to come and trounce the iPod and iTunes, relegating them to a niche due to their "beautifully functional closed system." This pronouncement comes to us from Australian commentator Alan Kohler in The Age, and is being added to the Apple Death Knell Counter as Death Knell #50.

In an interesting twist to most ADKC entries, Mr. Kohler spends most of his column praising the iPod -- "the beautiful iPod" to use his words -- and the great user experience of iTunes. Indeed, he owns an iPod, trashed his stereo, and plays all his music through his iPod and a pair of powered speakers he got from Apple.

The end result of all of this great design and user experience is that Apple has become a "powerful retailer" in the music business, and is poised to be the same in the video market.

So what blemish could mar this scenario? Apple's decision to keep the iTunes and iPod a closed system -- closed in terms of digital downloads; Mr. Kohler ignored the fact that CDs can be ripped and non-DRM files can be transferred to and played on an iPod -- is going to doom Apple's efforts in the market it created, just like it did the Mac.

In other words, Mr. Kohler is making the argument that many have made before, that Microsoft's business model of licensing Windows Media to any and all comers will overcome Apple's ease of use and integration, something that has heretofore been a non-issue when it comes to consumers and their wallets the world over.

The key to this, according to Mr. Kohler, is going to be a video and music store from Google, one that would presumably be built on Windows Media, and cell phones. A new generation of cell phones are going to be the preferred digital media device of the future, according to his argument.

"The shock troops for Microsoft's victory over Apple in personal computers in the 1980s were Intel, Compaq, IBM, Dell, Toshiba and so on -- that is the chip manufacturer and the cheap PC makers that licensed the Windows operating system. With digital music and video it will be Nokia, Samsung, Motorola and Sony Ericsson -- the mobile phone manufacturers," he wrote.

He went further: "This year they will start releasing phones with the same storage as iPods -- up to 30 gigabytes. iPods themselves will have to become phones."

Presumably, that won't be enough to save the iPod, however, because, "Microsoft's software will power the new generation of phone/music players, and the business of selling digital songs and TV shows will open up. Google will probably run the most popular online store, but there will be thousands."

::blink::

Thousands of music and video stores online?

OK, whatever.

He closed with, "The iPod/iTunes system will move into a niche with Macintosh computers because Steve Jobs has again stuck with closed architecture and total control. This will happen quickly because mobile phones are being turned over about every year."

Unfortunately, I am not really cutting anything out of his arguments. As I mentioned, most of the column was spent praising the iPod and iTunes alike. No time was spent explaining how phones are going to ever be as remotely good at playing music or videos as the iPod, or how Microsoft and whomever are going to overcome the ease of use associated with Apple's solutions that stems from their integration.

There are so many reasons why iPod and iTunes do not face the same set of conditions that Apple faced with the Mac in the 80s and 90s, and this is something that most people who automatically assume that Microsoft's licensing strategy will automatically prevail in the long run don't seem to understand.

It is my opinion that Apple has a lock on this burgeoning market until another new paradigm comes to shift the balance of power.

Thanks to Observer Dru Richman for the heads up on Mr. Kohler's article.


began using Apple computers in 1983 in a high school BASIC programming class. He started using Macs in 1990 when the Kinko's guy taught him how to use Aldus PageMaker, finally buying a Power Computing Power 100 in 1995. Today, Bryan is the Editor of The Mac Observer, and has contributed to the print versions of MacAddict and MacFormat (UK).

You can send your comments directly to him, or you can also post your comments below.

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Show: Subjects Only | Full Comments
Close Name:Guest
Subject: thousands?

this person obviously does not understand the technical hurdles of delivering massive amounts of content in an easy and functional manner. this is not easy, or cheap.

Yes google could do, but lets be clear, thousands of competitors could not do this on scale of what apple has done. not even close.
he also makes one massive error in judgment, that apple is inflexible.
Sure they are closed now, there is no reason they cant change faster in market than a a competitor could gain traction.

the difference in being open or closed is a firmware update, this is starkly different than OS/platform wars of past.

finally, and most glaring, where are the profits for these 1,000 of stores? or even googles hypothetical store?

It is well known, (apparently not down under) Apple makes it profit on iPods, that they run the store that fuels their iPod is only way it is feasible.

How is Yahoo's store doing now?



this is one of most obtuse tech writers i have ever read.

Close Name:Small White Car Posts: 1960 Joined: 02 Jul 2004
Subject: Well...

You know, we keep making fun of the people who point this out, but I bet we'll eventually see some non-Apple devices work with protected-AAC files.

Probably not anytime soon, mind you, but I wouldn't rule it out.

(Of course, the point of this article is "iTunes will fail" where my point is "iTunes will get stronger" but underneath that is the idea to protected AAC files will eventually need to be shared with other manufacturers. I agree with that concept.)

You could point to Motorolla's phones, I guess, although I don't really count phone/player hybrids. I'm talking about actual, dedicated PLAYERS. It will happen once a Shuffle costs Apple $10 to make and they sell for $12. At that point the profit is so small they'll be more than happy to allow other companies in. They'll still be focused on the $300 to $400 market whatever THAT is at that point in time.

Close Name:Guest
Subject: Would Google use Windows media DRM?

Hi,
I'm not sure that Google would use a Windows Media DRM system for a music / video store. Perhaps but I would have thought they'd go for something non-microsoft. Chris Gorog from Napster's comments about WM DRM system are pretty negative so I'm not sure how it would fare better for Google to use this option.

Perhaps a much bigger issue is use of DRM systems as a whole, obviously the recent French Law is aimed at preventing *any* company locking people into one specific player or DRM scheme. I see this as perhaps a bigger issue than whether any other Online Music / Video store uses WM DRM or any other DRM as a basis of a store trying to compete with iTunes.

Very interested to see the active response from Apple to the consequences of the French Law, moreover I'm interested to know the response from the Record and Movie companies who have put their eggs in the DRM basket.
Will Apple shut down the French iTunes store? If not and they opened up the DRM would Record companies pull their Artists from iTunes?

Close Name:Guest
Subject: To borrow a famous catchphrase: It's the battery, stupid.

I think most people are like me. Very protective of my mobile phone's battery usage. After all, if my iPod runs down its battery, I'm just out of music. But if my mobile phone goes dead, then I'm out of (in my mind) a crucial safety device/emergency lifeline.

When battery technology allows cell phones and iPods to run for weeks (not days)on a single charge then I think people will start to buy music phones.

When that day comes, guess who is going to make the music phone that dominates the market?

Close Name:Guest
Subject: One more thing.

Even if the battery life allows it. A significant segment of the market will still resist iPod-phone convergence.

Like me. When I get home and I wish to listen to music, I stick my iPod in the dock which connects to my hifi. Sometimes my kids borrow my iPod, I can't lend it anymore if it's also my cell phone. I read about people who swap iPods as a form of social interaction. Can you listen to your iPod-phone while you're flying across the Pacific? (Well, that last one is easily fixed by the mfr.)

Close Name:Guest
Subject: ipod closed ... not.

I buy music from allofmp3.com and it works great on my ipod and in itunes. How is this a closed system that forces me to buy from a particular vendor? Licensing != Open.

Close Name:Guest
Subject: Google

Yep, Google has had such amazing success with their video store (http://www.theregister.co.uk/2006/01/11/goog_vid_store/), it's a given they'll eat Apple's lunch in the online music and video markets.

Do reporters, analysts, and pundits ever get sick of this? Every week, we here so-and-so is going to kill the iPod, or iTMS, or whatever. Sure, it might happen, one day, or it might not. But what's annoying is the matter-of-fact style in which this is reported.

Close Name:Al Swearengen Posts: 339 Joined: 10 May 2005
Subject: Well there is a solution

Quote
Guest wrote:
I think most people are like me. Very protective of my mobile phone's battery usage. After all, if my iPod runs down its battery, I'm just out of music. But if my mobile phone goes dead, then I'm out of (in my mind) a crucial safety device/emergency lifeline.

When battery technology allows cell phones and iPods to run for weeks (not days)on a single charge then I think people will start to buy music phones.

When that day comes, guess who is going to make the music phone that dominates the market?


Okay, I can see a possible solution. Self-winding wristwatches have an eccentric weight the spins around and axis as you move and winds the spring. I could visualize a similar device for a portable electronic device. Now of course the mechanism would have to fit in the device and not make the total package too large.

Not to belittle your post, you have a real good point. My cell phone is more important than my iPod.

Close Name:Guest
Subject: Use iTunes music store files on ANY MP3 player

Here's how:

1) Download music from iTunes music store
2) Burn music to a audio CD
3) Take audio CD you just burned, and rip the music to MP3, WMA or unprotected AAC.
4) Load ripped files onto ANY music player
5) Enjoy iTunes music on your non-iPod player

Why is this so hard? Nobody is locked into iTunes music. And if you are really picky about the sound quality, then buy the damn CD in the first place, and rip the songs yourself to higher-bit level AAC or other lossless formats. Thats what I do with all classical music.

Tell the French legislators to stop whining!

Close Name:Tiger Posts: 1018 Joined: 17 Jun 2003
Subject: video on a cell phone

What a joke.

I've watched a few moments of video on my fiancee's iPod video. It's OK. But the screen is awefully small and detail is lost exponentially.

Now, move it to a cell phone with pretty much all models are locked into a portrait layout versus a video friendly landscape layout, and it's 33% smaller. Geez.

Not even realistic.

Close Name:ireid2k Posts: 125 Joined: 07 Apr 2003
Subject: Is this really classified as a 'Death Knell'?

I mean, did he say Apple would die? or just iPod and iTunes? and then they would just move into a 'niche market' . . .

hmmm

Close Name:Biff Posts: 1479 Joined: 08 Apr 2004
Subject:

Quote
Guest wrote:
I buy music from allofmp3.com and it works great on my ipod and in itunes.
You do? Wow. I guess it's not AS illegal as stealing via P2P, right?

Close Name:Guest
Subject: Another Death Knell

This time from the Napster CTO

http://www.line56.com/articles/default.asp?ArticleID=7483&TopicID=0


Happy End of Days!!
-HMCIV

Close Name:Guest
Subject: Comment on Al Swearingen's post

Actually it's already being done. A self-charging quartz watch. Ever heard of the Seiko Kinetic watch? Instead of winding a spring, the motion runs a generator (dynamo?). I seriously thought of getting one but boy talk about clunky. So I'm back to my old reliable Seiko automatic.

Close Name:Guest
Subject:

"http://www.line56.com/articles/default.asp?ArticleID=7483&TopicID=0"

Hahahahah. Somebody needs to tell mister Senior Vice President of Napster that music subscriptions services are already dead, and infact, have been for quite awhile.


Then somebody needs to tell Alan Kohler that MP3 player/cellphone hybrids are such an inherently ackward idea that they'll never, ever, ever even come close to replacing dedicated cellphones and dedicated MP3 players.

Close Name:Guest
Subject: Doable then

Quote
Guest wrote:
Actually it's already being done. A self-charging quartz watch. Ever heard of the Seiko Kinetic watch? Instead of winding a spring, the motion runs a generator (dynamo?). I seriously thought of getting one but boy talk about clunky. So I'm back to my old reliable Seiko automatic.


Yes, I guess it would be clunky because it probably has a coil and magnet in the generator. I wonder of the mechanism is enough to power cell phones and flash based iPods.

Hmmm, an induction coil that could power from nearby elecric fields

Close Name:John@was Posts: 15 Joined: 24 Jun 2004
Subject: and the original date of Kohler's article was...?

I'm wondering if someone's not fallen for ...

Nah, it couldn't be.



Last edited by John@was on Mon Apr 03, 2006 10:43 pm; edited 1 time in total
Reply | Quote
Close Name:Digital Mercenary Posts: 1 Joined: 03 Apr 2006
Subject: Bank Account Killer

So let me see if I understand: I'm going to pay $2.50 per song and then when my minutes run out pay 40 cents a minute to download songs to my phone or I could pay an additional $40.00 a month for unlimited time and then $2.50 per song. So in 10 months I will have paid for the cost of an iPod in monthly charges even if I don't buy any songs. At the end of a year I will have paid for an iPod plus 80 songs. Next year I'll do it again? How would anyone with half an ounce of intelligence buy into this?

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