Apple is consolidating its market-leading position in digital music - but some industry observers insist its recalcitrance in opening-up its formats will cost it its lead one day.

Claiming that: "Innovation doesn't occur in a vacuum", Fast Company warns, "which is why Apple's iPod will eventually be eclipsed by rivals that can cooperate and compete together."

The report doesn't predict any imminent mortality for Apple's business in the sector, but describes the company losing its grip on the market as "inevitable".

"Powering innovation"

Its understanding is that Apple's competitors are copying features, introducing new ones, and rolling out new music services.

Microsoft is supporting much of Apple's competition, if only by supplying the relevant software.

The report claims they have, "created an economic ecosystem that powers innovation."

In a strange conclusion when discussing a company widely perceived as the most innovative in the business, the report states: "Apple hasn't".

It explains: "In an ecosystem, more than one company can provide features or functions to the product. The product is 'open'."

It points to Windows-backed services such as Yahoo's music subscription service, and criticises the iPod (which possesses 80 per cent of the hard drive music player market) for not supporting these.

iTunes supports MP3 - but not WMA

A Wall Street Journal report, meanwhile, condemns Apple's AAC audio format as "weird".

In a triumph of anecdotal opinion over fact, this report - which castigates Apple for not using an audio format from Microsoft - explains that when iTunes rips music it does so in a format used by no one else.

In fact, iTunes is perfectly capable of ripping user's tracks in the universally supported MP3 format.

Songs acquired through Apple's iTunes Music Store are protected by a proprietary digital rights management format (FairPlay) that is not licensed to Microsoft, so Windows-powered music players, which account for a small percentage of the market, cannot play tracks purchased from iTunes.

Equally, Windows Media isn't supported by Apple's iPod or iTunes. This is because of Microsoft's proprietary digital rights management system .

Open up

Music industry sources have told Macworld of their frustrations at the incompatible formats, which they fear will cause problems to music buyers in future.

The Wall Street Journal echoes such concerns: "Both hardware makers and content providers need to take action to alleviate such conflicts soon, or the confusion and frustration could lead consumers to skip a lot of the new technology that so many manufacturers are eager for them to embrace," it says.

Fast Company says: "Apple should be opening up the iPod and licensing iTunes to others so they can build out the ecosystem. If it doesn't, the iPod will lose, just as the brilliant Mac computer ceded market leadership years ago."

"Ultimately, no one company can out-innovate the market," it concludes.