Charles Arthur On Technology

Why iPod's tune won't change

Three years ago, the first people to order an Apple iPod - announced as a "breakthrough digital device" on 23 October 2001 - started receiving boxes in the post. Inside were the first models: the white packet-shape that's now familiar, with a five-gigabyte hard drive - enough for 1,000 songs.

Three years ago, the first people to order an Apple iPod - announced as a "breakthrough digital device" on 23 October 2001 - started receiving boxes in the post. Inside were the first models: the white packet-shape that's now familiar, with a five-gigabyte hard drive - enough for 1,000 songs.

Since then, six million have been sold. The newest iPods can store up to 60 Gbytes and display photos, while the product has become a cultural icon, synonymous with "digital music player". Apple commands 90 per cent of the hard-drive player market, and more than 60 per cent of the digital music player market (including cheaper flash memory-based players, which have less storage).

So the question commentators ask is: how soon will Microsoft crush that market share to single digits, as happened with the personal computer market? A more interesting question, asked by software developers who see those six million iPods as an untapped market for a new breed of applications, is: when will Apple open up the iPod platform to other software? I think the answer to these two questions is interlinked: the sooner Apple does the second, the less likely the first will happen; but the longer it delays the second, the more likely the first becomes.

But Microsoft and rival digital music players aren't going to take the iPod's title anytime soon. First, iPods aren't PCs: they're consumer electronics items. Microsoft won the operating system "war" because in the 1980s companies buying PCs wanted IBM or compatible machines (because then buying IBM was the "keep your job even if it all goes wrong" option). Those PCs happened to run Microsoft's operating system. Apple never had a dominant share of the PC operating system market - at least not when there was one worth dominating.

But iPods are not bought by companies, but by consumers. So their decision is free of commercial considerations about the relative sizes of Microsoft and Apple. OK, everyone says, but Apple was told to license its operating system to different hardware makers by no less a person than Bill Gates in 1985; ignoring that advice led to its present single-digit share of the world's market, instead of total dominance. So, obviously, it should do the same with the iPod.

This is specious for two reasons. Had Apple, which makes its money (a lot of money in 1985) from hardware, licensed its operating system, it would have lost hardware revenue and subsequently have run head-first into Microsoft - which would have had the corporate backing of IBM. Apple would now be an historical footnote.

Also, why should the route to more iPod sales be to let others make devices with its "software" but not outward appearance? The key to the iPod's success is the frictionless combination of buttons, wheels and user interface. Mess with those, and you don't have an iPod; you have one of the also-rans. Apple is going halfway down this route by letting HP resell the machine (with slightly different casing); but crucially the software, hardware design and user experience are not HP's, they're Apple's. There's no obvious argument in favour of licensing the "iPod OS".

The other argument used to suggest the iPod will soon fall from favour is that Apple prevents playback of Windows Media Audio (WMA) format tracks. Thus, it can't play songs bought from dozens of online music stores. And equally, the encoding Apple uses to protect songs bought from its iTunes Music Store (iTMS) means those won't play on non-iPod players. What - incompatibility! Surely this means Apple will collapse.

Now, nobody suggests that the inability of Linux or Apple's OS X to run Windows programs directly threatens Microsoft's dominance. But that's what they're saying about WMA and the iTunes protection mechanism (called FairPlay): because the minority - dozens of other stores which, together, have perhaps one-third of the total digital download market, compared to the 70 per cent download share of the iTMS - can't play their songs on an iPod, it's the iPod which is at risk. Six million reasons suggest this is 180 degrees from the truth. It's those stores which are at risk, even though the encoding for the songs they're selling - WMA - is at no risk of disappearing. Even so, imagining the iPod remaining dominant is difficult. After all, the Sony Walkman, which first popularised portable music, didn't manage it. Although Sony parlayed that lead into other sectors, dozens of other portable cassette players - and later, CD players - chewed chunks out of its market share.

But the iPod has a path to dominance the Walkman never had. An iPod is a computer - albeit a very simple one with a limited operating system. And Apple's engineers know how write a music player, simple games, a calendar, contacts and notes applications for it, just like Microsoft's staff can produce Notepad and Windows Media Player for Windows on the PC.

The hardware add-on market is fiercely energetic, with more than 300 accessories. But that's only half the story. Lots of independent programmers would love to write their own games and applications for the iPod. (You can find a few early efforts at www.ipodlounge.com.) Imagine spreadsheet and document readers or mapping systems. The only limit is imagination and there's little shortage of that around the iPod. Those programs would make the machine even more useful to its buyers and an even bigger source of revenue for companies, which would thus have a vested interest in the iPod's continued existence. In technology parlance, the iPod would become a "platform" - just like Windows, Linux and OS X on personal computers.

And it's easy. All Apple has to do is publicise the application programming interfaces its teams use to write programs, such as Breakout, Solitaire, Contacts and Calendar for the iPod. But will it? Not soon. Danika Cleary, the head of worldwide iPod product marketing, told me in London last week that the debate has surfaced repeatedly within Apple. "But our stance is that right now [the iPod is] very simple and it works the same for everyone," she says. "We have decided to keep it closed. And basic."

Why? "Essentially, it's a music player," she says. "We don't want to spoil the experience." Clearly the worry within Apple is that outside programs might mess up the working of the machine - and that Apple would get the blame. Microsoft is familiar with this: Windows is often blamed for glitches that are down to badly written (or just malicious) outside programs.

Without becoming a platform, the iPod won't achieve long-term dominance (say, over five or 10 years) even while keeping sizeable market share. But there's still time for Steve Jobs, Apple's chief executive, to change his mind.

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