Look, guys, there may be a flood of imitators of itunes. Maybe it will swamp
Apple. But maybe it won't. Look at the number of products that have taken over
control regardless of quality: Starbuck's and Pro-Tools come immediately to
mind. Sometimes getting there with an easily-remembered brand-name gets you a
toehold that you can expand into an iron grip.

As for the economics...I suspect that Apple *is* pulling a Gillette here, and
that the product really is the songs, with ipod sales secondary. Look at a
couple of numbers; if you have 5 million subscribers (not far off from what
they already have) who each download 10 songs a month, you gross just under 50
million bucks a month, or just 600 million a year. Even if you only make a dime
on each download (which I would guess is about the margin i-tunes is working
at), you've made about 60 million bucks in a year, which isn't peanuts.

And that's assuming only 5 million subscribers. If you get 4x that many,
marketing to Wintel users, you're making approximately a quarter-billion a year
profit. This also is not peanuts.

Even if competitors siphon off a chunk of the market, you're still talking
about serious money. Apple has been working very, very hard to establish the
brand name and establish themselves as the pre-eminent legal downloading site,
presumably with the idea of avoiding too much competition. It's risky to bet on
anything in business, but I suspect they can pull it off.

Peace,
Paul