Friday, February 24, 2006

iPod is Doomed

Amazon seems to be making a credible attempt to take on the iPod's market. A recent Wall Street Journal article (16 Feb 2005) says that Amazon is in talks with major music companies to create it's own online music service. In addition, Amazon would like to create its own branded player.

Unlike Apple, Amazon would charge users a flat monthly fee for access to an unlimited amount of music. For long term subscribers, Amazon might offer a reduced or free music player. Recorded music companies would find a monthly subscription plan a more profitable arrangement than Apple's "a la carte" system. Amazon's service could be in service this summer.

This spells disaster for Apple, which up until now had a lock on the online music player biz. The only substantial value of the iPod was the easy and relatively inexpensive and legal access to downloadable music. The player, while well designed and full of coolness, is not difficult to duplicate by outside parties.

In addition, Apple severely limited the success of the iPod by repeating the same mistake it made with its Macintosh computers, the iPod is essentially a closed system. If users want to add new services/features to the iPod, it is virtually impossible for the average user to do. For instance, other music download services are incompatible with the iPod. Doc Searl, , echoes these sentiments in a post from his blog entitled, "Why We Need an iPod Competitor":

...And remember too that Apple designed, and will continue to redesign, the iPod as a hardware extension of the iTunes software/retail system. If Apple were Amazon, they'd make that sucker wide open to user participation; but they're not, so they don't. It's a closed system. ...

If Amazon creates a player and distribution system based on open standards, Apple's fate will be dire.