iTunes for Windows

Apple is serious about selling music.

Last week,

Apple Computer Inc.

released the Windows version of its iTunes Music Store.


The news was no surprise, as Apple had for months promised a Windows version of the software, and a week earlier sent out media invitations for an Apple event containing the statement: "The year's biggest music story is about to get even bigger."

But the Windows version of iTunes, combined with announcements of several major partnerships to promote the iTunes Music Store, shows a far more broader-minded Apple than we're used to seeing.

That Apple was willing to write software for

Microsoft Corp.

's Windows at all -- CEO Steve Jobs announced it with the phrase "Hell Froze Over" -- shows just how seriously the company is taking its new role as a music retailer. The only other Windows software Apple distributes is its audio-video QuickTime player, introduced more than a decade ago.

Just as noteworthy as Apple writing software for the platform of its historic rival is that it is suddenly willing to forge numerous high-visibility partnerships with other companies, rather than going it alone as it typically has done in the past.

The most significant announcement last Thursday was Apple's "alliance" with America Online Inc., which will allow AOL's 25 million users access to the iTunes Music Store when activated later this year.

According to the agreement, AOL, based in Dulles, Va., will link to iTunes artists, albums and songs from the AOL Music site to the relevant iTunes Music Store page. In one swoop, Apple has ensured that millions of Windows users will have the opportunity to sample the iTunes Music Store.


Another bold and surprising move for Apple is the agreement with Pepsi-Cola North America Inc. to give away 100 million free songs via a bottle-cap promotion. The promotion will begin Feb. 1 and run until March 31. Like the AOL deal, the Pepsi promotion ensures that millions of Windows users will be exposed to the iTunes Music Store.

"There's a land rush to see who's going to come out a leader," said Phil Leigh, senior analyst with Inside Digital Media. "So Apple is striking the strongest partnerships they can."

Such aggressive promotional campaigns with high-profile partners, starting with the Volkswagen "Pods Unite" campaign that began in July, indicate that -- particularly in the extremely competitive realm of online music retailing -- Apple realizes its isolationist policies of old just don't cut it anymore.

Apple's iTunes Music Store joins several Windows-based music download services -- including the much-maligned, as well as MusicMatch, eMusic, Rhapsody and, as of Oct. 29, Roxio's



In addition, several other companies have expressed interest in starting services, including Microsoft and

Dell Computer

Inc. And then you have such illegal file-sharing services as KaZaa, which persist despite a wave of lawsuits from the recording industry.

Apple no doubt is hoping that by getting a lot of exposure early, it will be able to show Windows users that the iTunes Music Store offers them a better music-buying experience, particularly if they own an iPod.

So for Apple to thrive among this hefty slate of competitors, it will need to -- somehow -- stay one step ahead of them.

Apple indicated it has every intention of doing so last week when it revealed the details of the iTunes Music Store for Windows as well as several new features.

  • First, the Windows version of iTunes functions almost exactly like the Mac version, as does the Music Store: all songs are 99 cents, most albums are $9.99 and purchased music enjoys relatively generous digital-rights restrictions.

  • Second, Apple said the number of songs in the store will double, to 400,000, by the end of this month. Other services, including Rhapsody, had been boasting of far larger song libraries than those in the iTunes Store.

  • Third, Apple made an exclusive arrangement with Audible Inc. to make more than 5,000 spoken-word audio titles available from the iTunes Store.

  • Fourth, the iTunes Store now offers two practical new features, electronic gift certificates and a child allowance account. Each feature allows users to choose an amount of money that is charged to the credit card associated with their iTunes Store account. Sending a gift certificate involves just a few clicks.

    The child allowance account, Jobs said, is designed to "wean kids off illegal downloads" by permitting parents to set aside money for their children to spend in the iTunes Store.

  • And, finally, Apple announced a software update to its most recent generation of iPods that, with third-party accessories from Belkin Corp., allow the device to record audio and store digital photographs.

    Nevertheless, Apple's critics quickly pounced on its announcements, with some proclaiming that Apple already was too late with its Windows version and others saying that Apple's insistence on using its own AAC-based digital-rights management software rather than the Microsoft version that all the Windows-based music services use will cause many in the Windows world to shun iTunes.

    Microsoft, based in Redmond, Wash., went so far as to post in the PressPass area of its Web site an interview with its general manager of Windows digital media division, Dave Fester, which included criticism of iTunes. In the interview Fester says that competing on the Windows platform "will be a significant challenge" for Apple.

    That songs from the iTunes Store only can be played on iPod portable music players is a "drawback for Windows users, who expect choice in music services, choice in devices, and choice in music from a wide variety of music services," Fester said.

    It's true that Apple's vertical model of controlling the hardware, the software and the service itself is not found in the Windows world, but that doesn't mean Windows users will reject it categorically. The vertical model allows Apple to achieve the smooth integration and ease of use upon which it has built its reputation.

    Part of Apple's strategy in opening up the iTunes Store to Windows users is the same as that for creating a Windows version of the iPod: they're both bait to lure Windows users to consider the Mac alternative while expanding Apple's customer base.

    Phil Schiller, Apple's senior vice president of hardware marketing, told the CNET news site last week that the Music Store doesn't make money, but serves as a marketing tool to sell more iPods, which do make money.

    But whether this strategy will work won't be known for months, if not years. The signs, however, so far look good.

    Based on the tone of comments posted in various Web forums and weblogs, most Windows users among the first to try the software liked it, and some raved.

    "Being able to browse and play new music so easily is just mind-blowing," wrote Russell Beattie in his blog. "I need to buy a Mac, so my entire computing experience is like this."

    A few negative comments focused on iTunes' lack of support for WMA files, though many of these users still liked the service itself. And there were reports of trouble with some installs on Windows 2000 systems, which Apple is investigating.

    Going by the numbers, Apple said on Monday that one million copies of iTunes for Windows had been downloaded in three and a half days, and that more than one million songs had been purchased in that same time span by both Mac and Windows users.

    That brings the total number of songs sold by the iTunes Music Store to 14 million since its April introduction, far exceeding its pre-launch goal of one million in the first six months. The store reached that goal by the end of its first week.

    Jobs noted at last week's media event that despite being available only to Mac users, the iTunes Store held 70 percent of the legal download market and was averaging sales of approximately 600,000 songs per week.

    As for the iPod, Jobs said that the 336,000 iPods sold in the last quarter represented 31 percent of the MP3 player market, making iPod the No. 1 player.

    Buoyed by its success to this point, Apple has revised its goal dramatically upward. Jobs said last week that Apple's new goal is to sell 100 million songs by the end of the iTunes Music Store's first year of operation in April 2004.

    And Apple's projections may actually be conservative. Several analysts, including Charles Wolf of Needham & Co., believe Apple will end up with about 20 percent of the legal download market.

    In a July report, Wolf projected Apple's 20 percent would translate to $600 million in annual revenue, based on 600 million downloads a year.

    If Apple can sustain its position as a market leader, and its announcements of last week indicate that it plans to do just that, then questions raised about choice and compatibility will become less of a problem.

    Other portable music player manufacturers, for example, could start including support for Apple's AAC digital rights management besides support for Microsoft's Windows Media Audio format.

    Some Windows music download services also might adopt AAC if it gains enough support; since AAC is not proprietary, but based on the open MPEG-4 standard, anyone who wants to can adopt it.

    Of course, Apple also could do its Windows users a huge favor by adding support for WMA in both iTunes and the iPod, but this is one area where Apple's longtime rock-headedness likely will prevail.

    So can Apple's foray into the Windows world succeed?

    Given the company's track record thus far and Jobs' firm commitment to music vending, it would be foolish to bet against the Cupertino-based firm. Apple finally may have learned from its past mistakes and could be poised to be a major force in the world of music.

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