http://www.macnn.com/articles/03/10/17/apple:.ipods/
Apple: iPods not iTMS is central to profits
updated 02:25 am EDT, Fri October 17, 2003
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Apple said it doesn't have any illusions that it can make great profits from selling songs over the Internet: "Instead, Apple is counting on the store as a for the company that can produce substantial profits--mainly through sales of its iPod digital music player. 'The iPod makes money. The iTunes Music Store doesn't,' Apple Senior VP Phil Schiller told CNET News.com...Schiller said the music store is close to profitability but is still losing money. Apple doesn't see the business as having much long-term profit potential either."
Fresh-Faced Recruit
Joined: Jul 2001
I'm disappointed
that Apple doesn't make money off the iTMS on its own and instead relies on increased sales of the satellite product, iPod, to make up for it.
Too many businesses carry loss-leaders at this time, the net effect being that potential competitors do not enter the market due to artificially-inflated barriers of entry and reduced margin potential. Hopefully the coming years will bring in a more positive business climate for entreprenuers.