Apple's iTune is without doubt one of the coolest things that hit the Computing world this year, but the article in TIME was an eye-opener on 2 fronts (quoting TIME):
- For every 99¢ Apple gets from your credit card, 65¢ goes straight to the music label. Another quarter or so gets eaten up by distribution costs. At most, Jobs is left with a dime per track, so even $500 million in annual sales would add up to a paltry $50 million profit. Why even bother? "Because we're selling iPods," Jobs says, grinning
- "They could sell an extra 2 million iPods because of this." And the margins on these devices make the Music Store's arithmetic look like child's play. Each $499 iPod returns as much as $175 in profit (ahem !! & thats like a cool cool 350 million USD in profits !)
- If iTunes becomes the player of choice for PC users, it would be a blow for Microsoft's grander audio ambitions (iTunes does not support Windows Media format) — and may well unearth the hatchet that Jobs and Gates buried back in 1997
& that's not all ...
iTunes ==> iPod ==> The Multimedia platform for the new generation !!!
Microsoft - Quo Vadis ? Windows XP Media Center Edition probably looks like a White Elephant compared to Steve Job's smart move !