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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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Observer Comments
Mon Apr 03, 2006 11:26 am 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.
Mon Apr 03, 2006 11:57 am Subject: To borrow a famous catchphrase: It's the battery, stupid.
Mon Apr 03, 2006 1:23 pm Subject: Well there is a solution
QuoteGuest 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.
Mon Apr 03, 2006 2:46 pm 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.
Mon Apr 03, 2006 3:11 pm Subject: Is this really classified as a 'Death Knell'?
Mon Apr 03, 2006 10:42 pm Subject: and the original date of Kohler's article was...?
Mon Apr 03, 2006 10:42 pm 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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