As iPod DRM gets cracked, calls for interoperability grow louder

Stan Beer
Friday, 27 October 2006 16:11

Opinion and Analysis

On the surface, there would appear to be strong evidence to support this theory. After all, the iPod was released in 2001 and went nowhere until 2003 when iTunes was launched. However, is it the closed iTunes and iPods ecosystem that makes iPod a success today or is it a number of other factors?

iTunes is the most successful music store by far yet only an average of 20 iTunes tracks are sitting on each the estimated 70 million iPods in the marketplace. Thus a lot of the tracks have come from other sources. Could it be that the real reason for the iPod's success is not the Fairplay DRM but the superb marketing that has created the brand? iTunes has certainly played a big role in iPod's success but there is a strong argument that the role is at least as much marketing the brand as anything else.

The iTunes and iPod brands are now well established. iTunes is the best online music store and iPod is the best music player, despite arguments to the contrary. The brands are well established. If Apple were to open up iTunes to other music players and iPods to other music downloads, the most likely result will be an increase in sales for both.

Of course, Apple is riding high right now so it will not bring down the walls of its walled garden unless it's forced to. However, there is a groundswell among music listeners who object to being told on what brand of equipment they can play the music they have legally acquired for their hard earned money.

If Apple is forced to take down the walls, it may find itself pleasantly surprised by the effect on its balance sheet.