The iPod and iTunes dominates its market in a way that no Apple product has done since the Mac back in the 1980s. But what are its chances of long-term success in the digital music market?
"If Apple continues to ride the wave of digital consumer electronics products, it may become the Sony of the 21st century," predicts the New York Times.
But can it maintain its position without opening up the iPod and iTunes – allowing rivals to sell music that is playable on the iPod, and making its iTunes music playable on devices other than the iPod? Or is the company right to pursue its proprietary strategy, keeping the technology all to itself?
Dell GM Michael George thinks keeping the technology closed could be a mistake. He says: "Over time, proprietary standards always lose because industry standards always win because you get more for less."
But others suggest that Apple may be right to keep its tight control of the iPod and iTunes. For example, Crossing the Chasm author Geoff Moore argues that Apple gains its appeal from its "splendid isolation".
While he notes: "It's a risky strategy. You are only as good as your latest hit. You know at some point you will miss a step," he believes that this is still the best strategy for Apple. "Apple is better off rolling the dice than trying to try to emulate Microsoft. It is hard to change the DNA of a company, even if you have a great hand. There are some times that you say, 'there is a great opportunity here, but it is not for us,'" he explains.
Apple's unwillingness to open up its standard has not stopped companies from placing their bets in the iTunes technology. Apple's relationship with HP is one example – and crucial because it proves that Apple isn't completely closed to going after the broader Windows market, explains NY Times.
Another company that believes Apple has a bright future is Amazon – which has just opened an iPod devoted store for its customers. Amazon head of consumer electronics Frank Sadowski says:"It is not an MP3 player; it is just an iPod, and it's only made by Apple," but he explains: "The proportion of Amazon.com customers who buy iPods continues to increase."
And U2s recognition of the iPod's "iconic value" in Bono's words, highlights that bands expectations for the device. Bono maintains that U2 gets as much value as Apple does from the U2 iPod deal, by promoting the new Red and Black U2 edition of the iPod, for which the band gets royalties, writes the NY Times.