Apple CEO Steve Jobs believes Sony will not succeed in its bid to boost US minidisk- and CD-player sales through its Connect music service.
Music purchased from Connect will be playable on a variety of Sony devices, including minidisc and compact disc players. For example, Sony's Hi-MD disc player can hold up to 45 hours of music on one $7 disc, while a Sony flash memory player stores 22 hours.
Sony Connect general manager Jay Samit told The New York Times: "We're not about one-size-fits-all. You can't believe it's about just one brick that people will carry."
Samit's comments were a veiled reference to Apple's iTunes Music Store, whose downloads are playable on one device only – the iPod.
However, Jobs believes that Sony's minidisc player will not catch on in the United States the way it has overseas. "We have a very healthy respect for Sony," he told the Times, "but Sony believes very strongly in the minidisc, and we don't. It might work in Japan but not here."
In response, Samit noted that Sony's player, due for release this year, will include a hard drive, like the iPod. Sony is also developing a portable device that plays video downloads, he added.
Analysts the fact Sony sees Apple as a formidable opponent is key. Standard & Poor's analyst Megan Graham-Hackett said: "This is a different phenomenon from 15 years ago. Sony wouldn't have looked at Apple as a competitor then. Apple has been quite innovative."
But chief executive of Dynamism.com Douglas Krone is less confident about Apple's future: "Look at the resources at Sony's disposal. They own all the intellectual property and they have the retail channel. It will be hard for Apple to maintain its market share."
The real conflict may still be between the proprietary digital rights management services, with Microsoft's Windows Media Format trying to become the standard, however.
Jupiter Research analyst Joe Wilcox said: "Sony is coming out with their own format, but we don't need another standard. The market for protected digital downloads is in the early stages of a format war. It's a recipe for consumer confusion."
The Times concludes: "The market for downloadable music and digital-music players is potentially lucrative. By 2008, the percentage of music sales online is expected to triple, to 12 per cent, according to Jupiter Research.
"Online music sites sold 25 million songs in the first quarter this year compared with 19.2 million in the second half of 2003, according to Scoop Marketing, which tracks legal music downloads.
"Apple, analysts said, has done the best job in the industry of using music as the link between its computers and audio devices."