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16 February, 2006

Amazon to take on iTunes?

Amazon Chief Exec Jeff Bezos has rightly said that if they're going to try and compete with iTunes they'll not want to simply create a copy of the Apple creation.

News from the
Wall Street Journal indicates that Amazon is advanced talks with four of the world's largest music companies to offer a digital music service that is significantly different from iTunes.

One of the additional tactics seems to be to offer Amazon-branded portable music players (just as
Advanced MP3 Players do), pre-loaded players and subscription services.

Do you think they can do a good enough job to take on Apple?

At the moment Amazon sells 10% of all digital music players in the US which includes iPods. If Amazon causes too much of a stink would Apple stop Amazon selling their products?? I've not seen any Apple comment on this possibility.

One issue that could prevent or harm Amazon's entry in to the player market would be the avaliability of Flash memory. Mr Cotty of iSuppli is report to have said that Apple "has tried to lock up available flash memory for its small music devices". To me Apple has an obligation to its shareholders to make sure its got sufficient components to continue with its massive growth. It's unlike me to support Apple, but whether or not they're securing sufficient quantities to continue the growth in sales or prevent others from entering the market is a comment that only market analysts and company executives could comment on.

On the digital download front, it has been said that Amazon is busy building its service with the hiring of 3,000 people in the US to get the project off the ground. If you compare this level of hiring with Google and Yahoo! which hired 2,659 and 2,185 people in the US last year.