The Mac Observer

Skip navigational links

You're viewing an article in TMO's historic archive vault. Here, we've preserved the comments and how the site looked along with the article. Use this link to view the article on our current site:
Analyst: DRM-free Music Good for iPod

Analyst: DRM-free Music Good for iPod

by , 7:55 AM EST, February 7th, 2007

Steve Jobs's open letter against DRM blames the recording labels for the copy protection embedded in digital music tracks. Should the labels ever agree to distribute online music without copy protection, that would translate into a win for the iPod, according to Piper Jaffray analyst Gene Munster.

The open letter from the Apple CEO was posted on the company Web site on Tuesday, and is generally assumed to be a response to demands from European countries to open the copy protection used at the iTunes Store so that other companies can sell iPod-compatible music downloads and iTunes-compatible players. Apple claims it can't open or license its FairPlay technology without risking violating contracts with the recording labels, and would prefer to remove DRM altogether - something the labels aren't likely to agree with.

"In posting this letter Jobs is making a statement that Apple does not advocate DRM - it is the music companies that require its use," said Mr. Munster. "Therefore, Jobs absolves Apple of the criticism of a 'closed' system and redirects it toward the music labels."

If the music labels agreed to sell songs without built-in digital rights management technology, the big winner would be Apple.The iPod+iTunes combination already controls over 70 percent of the market, and that number would likely climb if the player wasn't limited by incompatible copy protection schemes.

Mr. Munster commented "Consumers choose a device first and a music service second. Apple is confident, justifiably given the iPod's leading market share, that increasing usage of online music services based on an open platform will sell more devices and most of those devices will be iPods."

Even if consumers purchase an iPod, but use download services other than iTunes, Apple still comes out ahead. The increase in iPod sales will more than offset the loss of customers to competing music services.

Mr. Munster is maintaining his "Outperform" rating and target price of US$124 for Apple's stock. Apple is currently trading in the pre-market at $84.47, up 0.32 (0.38%).

If you are interested in Apple's stock, join our forum members in the Apple Finance Boards, a moderated forum for Apple Investors and people who are interested in Apple's financial dealings. For other stories regarding Apple's stock activity, visit our updated Apple Stock Watch Special Report.


Recent TMO Headlines - Updated October 24th

Mon, 3:46 PM
TMO Background Mode: Interview with Author and Podcaster David Sparks
Mon, 2:05 PM
Apple Releases watchOS 3.1 with Charging Fix, Message Effects Improvements, More
Mon, 1:51 PM
Apple Releases macOS Sierra 10.12.1 with Improved Apple Watch Unlock, More
Mon, 1:45 PM
TMO Daily Observations 2016-10-24: DDOS Attacks, Internet of Things, and HomeKit Security
Mon, 1:20 PM
Apple Releases iOS 10.1 with Portrait Camera for iPhone 7 Plus, Replay iMessage Effects, More
Mon, 11:32 AM
AT&T to Buy Time Warner in $85.4B Deal
Mon, 9:00 AM
Shimo VPN Client for Mac: $19
Mon, 8:00 AM
How to Fix Apple Watch Contact Syncing Problems
Sun, 12:04 PM
MGG 628: Cool Stuff Found and The DNS Achilles Heel
Fri, 10:59 PM
Apple Pay Used to Buy $1M Aston Martin DB5 Luxury Car
Fri, 10:23 PM
Perpetrator of Friday's Internet Outage Comes Clean
Fri, 9:35 PM
macOS Sierra: Disable Auto-Logout if Sierra Enabled It
  • __________
  • Buy Stuff, Support TMO!
  • Podcast: Mac Geek Gab
  • Podcast: Apple Weekly Report
  • TMO on Twitter!