SUPPOSE A company asked you to buy a computer based on how much you like its portable music player. Would you bite? For Apple, the tactic might work, and that says a lot about the state of the computer and music industries these days.
When Apple announced the third version of its iMac desktop computer this week, it boasted that the machine comes "From the creators of iPod." On the surface, that's like GM pitching a Cadillac Escalade by bragging that it's "From the creators of the turn signal."
But there's no doubt that Apple's elegant iPod portable music player -- the runaway best seller in its market among both Mac and Windows since its introduction in 2001 -- boosted the company's image for cool in a new market, helped Apple's bottom line and provided a needed shot of enthusiasm for a line of computers that was getting a bit tired.
Nor is it a coincidence that the new one-piece iMac -- a superb example of minimalist design that folds the entire guts of a powerful PC into the back of a white-bordered, flat panel screen -- looks like an iPod on steroids.
It's just another sign that a major battle for the hearts, minds and dollars of young, tech-minded consumers will be fought over music -- who sells it and who gets to play it on what portable gadgets. In this squabble, the PC is really the middleman. And with Microsoft expected to open its own online music store this week, things are likely to get even livelier.
The big players of the music industry took a gamble on Apple when they licensed their catalogs to the company's fledgling iTunes music store in April 2003. It paid off for both.
Millions of music fans demonstrated that they were willing to pay 99 cents a tune for music that was copy-protected -- but not outrageously so. Apple instantly became the "legal" online giant of the music industry. That, in turn, boosted sales of its profitable iPod -- which is not only a great music player, but the only portable music device that can play album tracks purchased through iTunes in their native format.
Although online sales now generate less than 2 percent of the music industry's U.S. sales, the record labels have generated hundreds of millions in online revenue with almost no additional cost. Much of that revenue had been lost to illegal file-trading, which the record industry blames for declining CD sales.
