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Apple Watch: RealNetworks Courts Apple With Alliance Offer
Sunday, 2004 April 18 - 6:01 pm
Multimedia software company RealNetworks has reportedly offered Apple some sort of alliance deal, to team up against Microsoft and the Windows Media juggernaut. Should Apple accept? Some pundits seem to think so.

Rob Glaser, the CEO of RealNetworks, sent an e-mail to Steve Jobs, indicating that he was offering an alliance... the terms of this alliance are not known. However, all indications are that Jobs has simply ignored this offer.

That makes sense to me. What on earth does Real have to offer, other than its name? Just because RealPlayer is installed on a bunch of Windows machines doesn't necessarily mean that it would boost iPod sales if RealPlayer were FairPlay/AAC-compatible. If there's any reason people are avoiding iPods, it's because they've already built up a collection of WMA files that won't play on them. Is Real planning to allow a DRM transcoder, to transfer a WMA license to FairPlay? I doubt it.

Licensing FairPlay to Real would only serve to disrupt the "holy trinity" of iTunes, iTMS, and iPod. It would take sales away from the iTunes music store, and contribute nothing to Apple's bottom line or market share.

Similarly, Glaser's threat to ally with Microsoft, should he be rebuffed by Apple, is an empty threat. Microsoft has no use for RealNetworks.

Some seem to think that Apple is making a mistake by not licensing, the same "mistake" they made in the 1980s in not licensing the Mac OS. What people don't seem to get is that music is an entirely different thing than software. Music is easy to transcode to different encoding and DRM formats; software isn't. Apple has everything to gain right now by keeping a tight hold of their market, and not a whole lot to lose.
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Posted by Ken in: techwatch

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