Apple may be about to make the same mistakes the music industry made during the height of the Napster controversy.

CNet News writes: "In the struggle over Napster, the music companies turned out to be their own worst enemies. So intent on kneecapping Napster, they ignored the best interests of their customers – which would have been to find a way to coexist with the new Internet technology."

Apple's reaction to RealNetworks Harmony software – which will enable iPod users to play music downloaded from Real – could mean that company ends up on the same path as the music industry did.

The report explains: "Napster had the technology, Hollywood had the music, and something big was on the horizon. If only the opposing sides could ever see the wood for the trees. That was not to be. The music industry was too afraid of losing control, and Napster couldn't run away from the fact that it was a clearinghouse for stolen intellectual property."

Like the music industry, Apple wants to keep control of the music download industry, and therefore the company has decided to play tough with RealNetworks, threatening legal action over the Harmony software.

"A history of bad blood between Apple CEO Steve Jobs and Rob Glaser, his opposite number at RealNetworks, no doubt plays into this developing novella. But ego takes a back seat to a bigger consideration: power. Apple would like nothing better than to exert Microsoft-like domination of the music business.

"The truth is that RealNetworks poses little competition to Apple, which has a huge hit on its hands with iPod. Ditto for the company's music store, which has rung up more than 100 million downloads," concludes the report.