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DRM free Amazon MP3 a core threat to Apple

Opinion and Analysis



This may be pure speculation but does anyone remember the big fuss being made just recently about Amazon's release of its Kindle e-reader? It created somewhat of a sensation when it was released in November 2007.

Is there a possibility that what Jeff Bezos is attempting to do for book downloads, he could just as easily do for MP3 music downloads with an Amazon branded MP3 player? The Kindle, which sold out within five hours of being released, has been a success partly because of its tie-in with a mobile carrier that allowed easy e-book downloads from just about anywhere in the US.

Imagine if Amazon could swing a deal using a cellphone network that enabled an MP3 player (or mobile phone with built-in music organiser) to download 89c DRM free tracks. If a deal could not be swung with a mobile carrier, then a Wi-Fi equipped device that could directly download cheap DRM free tracks would still be enough to put pressure on Apple to improve its iPhone and iPod Touch Wi-Fi iTunes store to sell not just music but every form of digital media imaginable in line with what customers have been demanding (subscription, pay per view etc).

However, because of its uneasy history with the music companies, Apple looks set to have a tough time forging a favourable DRM free deal with the three largest players. In fact, at present they seem to be trying their best to cut Apple out of the picture, while building up the businesses of its rivals.

Apple has demonstrated that even the wildly successful iTunes stores, with more than 3 billion downloads, is a relatively small money spinner compared to the massive profits that can be generated by portable music player sales. It's a fair bet that Amazon, which moves large volumes of physical goods around the globe, is not going into the music downloads business to make small change.

One year ago at Macworld 2007, iPod global marketing director at Apple, Greg Joswiak, was asked why the Web capable iPhone didn't allow direct music downloads using the iTunes store. He simply replied, much to the chagrin of many music fans, that iTunes and the music should live on the computer.

Well, now that it has a DRM free downloads deal in place with all the major record labels, Mr Joswiak and Mr Jobs may find that Mr Bezos and Amazon beg to differ.

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