iPod Living On Borrowed Time, Gates Says
By Carlo Longino, Thu May 12 23:45:00 GMT 2005

The mobile phone will overtake the iPod and other MP3 players as the top portable music player, Microsoft's boss says.

Bill Gates has been all over the media this week, backing up his company's launch of the latest version of Windows Mobile. Thursday, he told a German newspaper that he doesn't "believe the success of the iPod is sustainable in the long run", putting his money on mobile phones to supplant portable music players.

Well, he would say that, wouldn't he? In all seriousness, it's not a new, nor unpopular, line of thought, but it illustrates the importance Microsoft is putting on this corner of the market -- even if some studies say people aren't yet interested in listening to music on their handsets. But the major stumbling block isn't getting the appropriate technology into handsets, it's the question of interoperability.

There are a couple aspects to this. First is mobile operators: many have already launched their own music download services, and are loathe to let any revenues (from music or otherwise) slip through their fingers and into somebody else's pockets. From operators refusing to carry the iTunes phone, to pricing data service to discourage the use of anything but their own stores, carriers are aggressively protecting what they see as their own turf. But the potential problems from operators goes beyond just keeping users on services they run. Some carriers' offerings aren't just handset-centric, they're handset-exclusive, tying users' purchases to just one device.

The second aspect is DRM, which is maligned enough without the continuing battle over the licensing terms of patents needed for the Open Mobile Alliance's chosen flavor. The main concern over the OMA DRM patent fight still remains the threat of fragmentation -- with operators and other vendors all using one DRM method, the playing field is much more open. But there still exists a possibility that different handset vendors and carriers will settle on different DRM standards, causing a big, muddled mess for consumers.

Perhaps this is where Bill sees an opening come in and attempt to save the day by offering up Microsoft's DRM -- which is already used by a number of online shops and services -- as a cheaper alternative to the OMA standard, giving Microsoft some hefty traction in the mobile music market. This, of course, doesn't defeat the lock-in Apple has on users that have bought music from the iTunes Music Store, who it expects to flock to the iTunes phone. But some commentators can see a day when Apple loosens its grip on the music player business in favor of the music file business -- and at that point, its DRM needs to be on as many devices as possible.

But the bottom line is simple: consumers don't want to be tied down. They don't want to be able to only purchase music from one vendor, and they won't accept their music being tied just to their mobile phone. As long as mobile music offerings are more restrictive than current wired online offerings, the iPod and its ilk are safe indeed.