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Apple's iTunes: The 800-Pound Gorilla

In the world of online music, there is one company that dwarfs all other companies combined: Apple Computer.

Interestingly, Apple now refers to itself more often as "Apple" rather than "Apple Computer" because a large portion of Apple's revenue comes not from computer sales, but from consumer sales.

Apple has a one-two punch solution for your digital music needs. The first punch is with the cool iPod (got one myself and I love it); the second is from the powerful iTunes music software and store. Both products work flawlessly together. iTunes synchronizes beautifully with the iPod: When you add music to your computer, it is automatically added to your iPod.

Aside from QuickTime, iTunes is the first major piece of software from Apple that runs on a Windows computer. As Steve Jobs quipped at the announcement of the Windows version of iTunes, "Hell has frozen over." The good news is that iTunes for Windows and Mac are identical: same music, same layout, and same ease of use. As a Windows user, I was not expecting iTunes to be so easy to use. The design is minimalist and simple. The focus is on music—listening to music and getting more music. You can easily create song lists, import music from music CDs, or browse the 1+ million songs in the iTunes store.

The success of the iTunes store can't be denied. Today, nearly 80 percent of all online music is brought from iTunes. The reason is simple: After you register with the site with your credit card, you can buy music by clicking on a button. One click and you're hooked.

To keep you hooked, iTunes come with lots of exclusive tracks and performances. My favorites are an album by Sting, an EP by Seal, and (of course) a new U2 album that can be bought only online at iTunes.

Downloading an entire album of music is as easy as buying a track. One button and you're a few bucks lighter.

More recently, Apple has introduced a service that sends e-mail when an artist has added more content to the iTunes store. There is new music every Tuesday (not just a couple of new albums; usually hundreds of new tracks from dozens of artists). Tuesday is also the day when you can get a free song from upcoming artists such as Snow Patrol (who are huge in England and will be lining up for U2 this summer—see a connection here?) and the like.

The only downside of iTunes is that the only digital music player that plays iTunes music is the iPod. This is a pain if you have a few players. If you take the entire MP3 market, the iPod now claims about 70 percent of all sales. That leaves a big chunk of MP3 players out there, such as the thousands of Flash Memory-based players.

Of course, Apple is not content with 70 percent of the pie. At this year's MacWorld convention, Steve Jobs released the iPod Shuffle, which is a small, Flash Memory-based player that will sell for $99 and $149 (512Mb and 1Gb memory versions). Will this new product help Apple swallow up almost all of the MP3 market? Initial sales for the Shuffle have been white hot, with customers having to wait up to four weeks to get their new gadget. And, there are even rumors that Wal-Mart will sell the iPod Shuffle and has ordered an initial batch of 250,000!

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