I believe iPod could have succeeded without iTunes, and iTMS could have succeeded as a browser/QuickTime web service — Jobs knitting them into one fabric is part snow job. Part of their success is due to the failure of others to execute as Apple can. Consumers care about their collection of mp3s and see the wma format as a play by Microsoft to create a standard that would give it control for some nefarious purpose — wma is a weed in the garden. A browser-based store is also problematic in that web standards are a mess due to Explorer’s departures from standards — a prime example of Microsoft caring only about control and delivering a faulty experience. Let’s not even talk about malware infesting Windows. It doesn’t surprise me that Explorer is now an orphan abandoned by its parent due to its nightmare security scenario.

If Apple succeeds it will be because of philosophy: it identified and focused on the consumer needs, whereas Apple’s competitors identified business or control opportunities. Apple innovated; the others schemed; consumers perceived the difference and voted decisively. Credit goes to Steve Jobs.

The end play of this saga will come when Windows users realize that the user experience of the Apple platform is so much better than that of the wintel platform — like night is to day; freedom to imprisonment — and switch. The iPod / iTunes experience has given them an inkling that the grass on the other side of the fence might not only be greener but lush. And free from pests — viruses, trojans, spyware and adware.

I think that Apple’s genious here is their strategy – I didn’t even realize until recently. Job’s decided from day-one that he wanted to sell the music essentially at cost. Eh, maybe make a few dollars off it. But make it a seamless, fun package to use, and make that only compatible with Apple iPods. Why does this work so well?…

Everybody else out there sells either music or players (except Sony) not both. If you are selling music only, you are just screwed. Sure, you can do the wal-mart thing and beat Apple by $0.10 per track, but how many millions of tracks to you have to sell at your super slim markup over label price to make money?… ALOT.

If you are selling players, you too are, well…. screwed. People can get music for your player at any music store (except Sony & Apple), but those stores can’t stay open because Apple keeps music costs down and they can’t make money doing it.

It seems like Apple is taking one stick but levering with both ends of it simultaneously. The harder they lean on lowering the music price, the worse it is for the other music stores – but at the same time that deals a blow to the MP3 player market needing those stores.

I will only be worried if Microsoft begins to sell music (and does so at a loss), and builds into windows good juke-box software for all players (what are the chances?!). This is the only way that I can forsee Apple getting de-throned.

have I just lost it, or are things looking very well sown-up?

Flypod

I believe European prices are higher due to taxes, but no direct knowledge of this. I believe Apple insists on charging less than what the record labels (including independents) want them to charge (at least for singles with Apple giving some leeway on album sales).

I agree with you totally that until the WMA and ATRAC formats put out an easy-to-use jukebox/music store combo software, they will keep losing market share. And until the WMA/ATRAC MP3 players put out a player that mates easily with the PC combo software, they will keep losing market share to the iPod, as future iPods will start having lower prices ($149 to $199) thus opening up its market even further. (You can get cheaper iPods today by buying refurbished iPods; this is just like the automobile market.)

But the music industry still calls the shots – they can kill iTunes and iTMS by not negotiating future contracts. Of course, this will kill themselves, as piracy will take over.

Get it?

Not really much new in this report.. great that you acknowledged other stores are focusing on subscription and as a result, Apple dominates.

Think about this.. Apple has sold as many iPods as OD2 has sold songs.

Think about that.. those iPods will hold, on average, 5000 songs. Amazing.

If music downloads will have a tiered pricing structure, then the trick is to download from the country with the lowest price – which perhaps requires connecting through a proxy server in the same country, and using an international or prepaid credit card.

Or you can simply save your money and use P2P

-tm