iTunes Is A Loss Leader – Competition Of No Worry To Apple

from the details,-details dept

Now that every third or fourth company on the planet has announced plans to offer up their own download service, reporters everywhere are tripping over each other to wonder whether or not this will harm Apple’s iTunes plans. You can practically hear Steve Jobs laughing at these issues as he points out the very obvious fact that selling downloadable songs was never meant to be a revenue driver for Apple. It’s only purpose is to act as a loss leader to sell more iPods. While he ignores the fact that Dell is using their service from MusicMatch for the exact same purpose, he is right that many of the other offerings in the space don’t have the same business model, and will struggle to make a profit trying to sell music alone.

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