Tuesday, August 17, 2004

Once Again Apple's Proprietary Nature Spells Disaster

When Apple computers combined the release of their ultimate toy (the iPod) with the ingenious idea of allowing downloading mp3s from the internet (via iMusic) it was marketing genius. Once again the Apple had beat its competition to a new market with a new technology. Creating a reasonably priced product (the mp3s not the iPod) that met a market demand. They discovered that people are willing to pay .99 per song rather than $11 to $14 for a cd (if you're paying more you're not shopping intelligently). But one catch is beginning to appear in the mix. Apple's proprietary nature. See...back in the day Apple had this wonderful idea, a personal computer in every home. "Let's make a computer cheap enough and powerful enough for the middle class," was the rallying cry of early Apple, and so the Apple and Apple II were born. But they rejected the idea of incorporating a licensed operating system (dos) in favor of using one they owned in house (basic and later Mac OS but that comes after the fall anyway). Eventually, IBM and other companies (whose machines became called clones because they could run dos programs and later Windows programs) leased dos rights and a large industry overwhelmed Apple who now had to settle for the loyal cult it created around its magnificent MAC machine. The Mac is a wonderful computer, but it has very little software designed for it and is more expensive than a PC. So much for the Apple's early dream.

Now it looks as if the same is happening in the internet music world. According to the Hollywood Reporter:

Harmony Technology allows consumers to buy music downloads and play them on another company's choice of player. Previously, for example, iPod users who legally downloaded music from the Internet were limited to using Apple's iTunes Music Store. Harmony Technology allows that iPod to play music purchased from such other legitimate online retailers as Napster, Sony's Connect, Wal-Mart or RealNetworks' RealPlayer Music Store.

According to most digital media industry insiders, Apple has declined to allow other companies access to its FairPlay digital rights management technology. French online music store Virgin Mega even filed a formal complaint with that country's Competition Council asserting that Apple is unfairly stifling competition, a claim scheduled to be heard before year's end.

In effect, Apple prevented the iPod from playing music protected by Microsoft's Windows Media DRM or RealNetworks' Helix DRM until Harmony Technology came along. Tech-savvy users previously went through a cumbersome process of burning the purchased songs onto a CD and then reripping them in order to put them on an iPod, while more typical music fans were simply stymied.

Things aren't looking good. Once again Apple's proprietary nature will ensure that a superior product, in this case the iPod, will become a niche item.

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