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Analyst: Amazon move a "me-too" effort

updated 04:25 pm EDT, Wed May 16, 2007

Analyst on Amazon music

Amazon today revealed the forthcoming launch of a direct-download music store offering tracks without DRM (Digital Rights Management) in the open MP3 format. "The announcement is a carbon copy of Apple's deal with EMI," said Piper Jaffray senior analyst Gene Munster. "Amazon will offer the same DRM-free tracks as iTUnes, and therefore will have no competitive advantage over Apple." The analyst says Amazon is playing catchup with iTunes, and points out that Amazon's music store will not carry any DRM-free tracks that Apple's own iTunes store doesn't already offer. "We believe the Amazon music store will not materially impact Apple's business," said Munster. "In fact, although Apple's dominance frustrates music studios, the reality is that Apple's market share (70 percent in the U.S.) gives Steve Jobs and iTunes the upper hand." Piper Jaffray maintains its "Outperform" rating on Apple shares with a $140 price target.

That upper hand, says Munster, results in the Cupertino-based company's ability to be first to market with new features and more DRM-free music. The analyst also touches on the potential for iPod owners to purchase tracks from Amazon's upcoming store, rather than iTunes, and upload those tracks onto their iPods.

"Users will be able to put the DRM-free tracks from Amazon into iTunes and then onto their iPods," the analyst said, noting that this "adds a confusing and unnecessary step."

"We believe that iTunes offers the simplest way for music shoppers to browse the largest music catalog available. We also believe that Apple will continue to enhance the iTunes Store in order to maintain its lead in the online music space."

by MacNN Staff



  1. testudo

    Joined: Dec 1969


    Couple of points

    Its only a me-too effort if the price is the same. For a lower price per song (not even sure the whole point of the higher price, since, supposedly, albums cost exactly the same), it would give them an advantage.

    And the "confusing and unnecessary" step? I guess its his point to say that, since iTunes is integrated to the ipod that no one with an ipod would buy from amazon. But how stupid are iPod users, anyway, that they get befuddled by the whole "Drag file to iTunes window" step?

    And isn't it possible that Amazon offer an iTunes plug-in to auto-copy the music?

    I just love people who make it sound like that if someone can't just crush the competition with their offering that they shouldn't even try.

  1. Peter Bonte

    Joined: Dec 1969


    Drag file to iTunes

    "Drag file to iTunes window" step is not done for a Windows user, they always work full screen. :)

  1. climacs

    Joined: Dec 1969


    one difference

    Amazon is offering MP3, not AAC. That could attract non-iPod users or iPod users who don't want to be locked into AAC. Admittedly that's a small part of the market, but everyone runs a distant 2nd to Apple in this market anyhow, whether it's music downloads or MP3 players.

    Amusing how the music industry is irritated by Apple's dominance. That is a direct result of the stupidity and greed of the music industry, which had YEARS to get its act together with that market. They never did provide an easy-to-use music download service so people turned to music piracy and now they are so used to it, you will never break them of that habit.

    Markets, like nature, abhor a vacuum. Apple filled the need. Music suits should get over themselves.

  1. coldfusion1970

    Joined: Dec 1969



    Ohhh, looks like i will be buying music from Amazon in the future. This will make a great complement to the ITMS.

    I just hope that they go for 256kbps as i dont want to pay for 128kbps MP3 format files. I've always ripped my own music as 256kbps MP3.

  1. testudo

    Joined: Dec 1969



    One other thing, Amazon has said that they have some indie labels on board. Apple has made no such announcement.

  1. Jeronimo2000

    Joined: Dec 1969


    mp3? nice.

    That's one huge selling point for me - MP3. Saves me re-ripping tracks for my MP3 car stereo.

    AAC sucks.

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