I sent the comments below to Bob Thompson in response to his post today. I’m not sure I see how iPod sales are tanking in a big way: http://en.wikipedia.org/wiki/Image:IPod_sales_quarterly.png If you remove the huge Christmas bump, they have still been selling more per quarter than last year.
As far as iTunes, from what I’ve read it seems to be doing very well too. In fact, they are now the 5th largest reseller of music in the US. That’s not online reseller. This is as compared to brick and mortar stores. http://www.appleinsider.com/article.php?id=2035 http://www.wftv.com/technology/9831655/detail.html BBC mentions what you are saying: http://news.bbc.co.uk/1/hi/technology/5350258.stm
But I think the key point here is that people will not replace their existing CDs with downloads. They will rip what they have, and then may buy from an online store like iTMS. Since CDs have been around for so long, it only makes sense that folks will have more ripped music than online purchased music.
I personally don’t find the iTunes DRM all that annoying. It seems to just work. Buying is fast, and I can listen on my iPod or burn a CD or whatever I want. Yes, it is still DRM, and if you hate DRM you will definitely hate it too. But I’ve not seen any error messages or weird restrictions like with Microsoft’s Plays For Sure.
Oh, and one more point. From what I’ve read, iTunes has been considered the loss-leader that sells iPods, not the other way around. This article makes some excellent points: http://www.roughlydrafted.com/RD/Home/8FF35CC1-9C86-492C-B711-1564A8EB60A4.html Some key quotes: “Clearly, Apple sees iTMS content as the lubricant to sell iPods and accessories, not a huge cash cow in itself. That’s the third aspect of technical feasibility.” “If users choose to buy their music on CDs or from indie MP3 outlets, Apple doesn’t lose out, because three out of four of those users will choose to buy an iPod to listen to their songs. The iTMS is an option for consumers, not a critical moneymaker for Apple.”