Apple ventures into new territory with its music service. But can it make the balance sheet sing?SAN FRANCISCO--Apple Computer unveiled the Windows version of its closely watched iTunes music jukebox software and song store in the US on Thursday, in a rare foray away from the Macintosh platform.
Like the iTunes Music Store service it unveiled for the Macintosh computer last April, the new jukebox software for Windows is free and offers a one-click access to downloads of an expansive music catalogue, with most songs priced at SU$0.99 cents. The company had promised to launch the Microsoft version, widely anticipated to be unveiled at Thursday's event, by the end of the year. The company has made no announcements regarding Australian availability of the iTunes Music store at this stage, although iTunes for Windows is available from Apple Australia's Web Site.
The new Windows iTunes jukebox, which is compatible with Windows 2000 and XP, has the same look and feel of the Mac version. It supports Apple's copy-protected Advanced Audio Coding format as well as MP3--but not Microsoft's Windows Media Audio (WMA) format.
"This is not some baby version of iTunes or the music store," Apple CEO Steve Jobs said at the Moscone West convention center here. "This is the whole thing." In his typical marketing hyperbole, Jobs declared, "iTunes for Windows is probably the best Windows application ever written."
Acknowledging that developing products for the dominant Windows platform marks a deviation for Apple, Jobs began his introduction by pointing to an image with the words "hell froze over." The company later handed out posters with that phrase below a picture a Windows PC that's running iTunes.
As expected, Apple also announced new accessories for the iPod, including a microphone and a reader for removable flash memory cards that will allow users to store--but not display--digital photos on the devices. PC accessories maker Belkin is making both accessories, which Apple is selling through its site.
The release of the iTunes service will be closely monitored as a bellwether of Apple's future outside its traditional computing product line but also as an indicator of the future of the digital music business. Like Microsoft and Sony, Apple characterizes its products as the centrepieces of digital home entertainment systems. The leap onto the Windows platform--which has a PC market share of more than 90 percent compared with Apple's less than 5 percent--marks an expansion of that ambition.
Apple's launch of its online music store in April jump-started a digital music industry the collapse of numerous start-ups and restrictive licensing terms had demoralized.
In large measure due to Jobs' negotiating power and his stature in Hollywood as CEO of the successful Pixar Animation Studios, Apple was given a much freer hand than were its predecessors. As a result, iTunes was hailed as the first consumer-friendly digital music store. In less than six months, the company said it sold 13 million songs, far more than any online song store in a similar time frame despite only being available to the relatively small market of Macintosh users.
As part of the launch of the Windows service, Apple also announced a pair of new marketing partnerships that are aimed at driving iTunes use deeply into the mainstream. Apple and America Online have agreed to put iTunes "buy this song" buttons next to every song that's listed in AOL's music service, which its 25 million subscribers can access. Clicking the button will automatically launch the iTunes music jukebox and begin downloading the song; billing will be handled through the customer's existing arrangement with AOL.
Beginning early next year, PepsiCo will launch a separate promotion, giving away 100 million iTunes songs as part of a sweepstakes it will launch in connection with the 2004 Super Bowl. Pepsi will produce 300 million specially marked bottles, 100 million of which will contain caps that entitle the customer to download one free song from Apple's music store.
Star attraction
The company's San Francisco launch also drew on endorsements from music stars. U2 singer Bono, rap artists Dr. Dre and Rolling Stones singer Mick Jagger each gave a live endorsement of the iChat videoconferencing software. Singer Sarah McLachlan also appeared live to sing several songs and to talk about how she used the iPod.
This marketing blitz will be needed. Several rivals are seeking equally relaxed terms from the record labels, and Apple's Windows version of the digital song store will have considerable competition it lacked in the Macintosh world.
Already, Musicmatch and BuyMusic are offering similar access to downloaded music, and Napster is slated to launch later this month. Sony, RealNetworks, Dell and Amazon.com, among others, are all expected to provide their own music stores.
The rhetorical battle lines between Apple and its rivals are already being drawn.
Most of those other services for Windows are distributing music in Microsoft's WMA format, for which Microsoft also produced the digital rights management software. That means that songs that are purchased from BuyMusic.com, Musicmatch, Napster and other rivals can be played on any music device that supports Microsoft's WMA--a list of about 40 different portable devices--and played in most major MP3 software programs.
By contrast, songs that are purchased from Apple, wrapped in its proprietary FairPlay content protection technology, can be played only on the iPod, which represented 31 percent of all MP3 players sold in July and August. Songs sold through the service can be played on any software player that supports QuickTime, Apple's longstanding audio and video format, the company said.
Microsoft and other device makers say this Apple strategy limits consumer choice--although the selection of devices available with other services is resulting in a de facto industry standardization on Microsoft's own audio software and digital rights management.
"I think one of the expectations of a Windows customer, really something that people see as one of their basic rights, is choice of multiple services and being able to mix and match," Dave Fester, general manager of Microsoft's Windows Digital Media division, said in an interview shortly before the Apple launch.
The impact of Apple's entry into this unfamiliar Windows environment wasn't lost on the artists who endorsed the iPod and the iTunes store.
"It's like the pope of software meeting the Dalai Lama of integration," cracked U2's Bono. But Apple produced a genuinely good service, the singer added. "That's why I'm here to kiss the corporate ass. I don't kiss everybody's."
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