themselves gateways to full-blown Mac ownership. The iPod may be a one-
or two- time replacement device, but it's pretty much a given that we
will all have a computer in some way, shape or form in our lives until
we die. Getting people into the Mac fold will help guarantee repeat
customers year after year.
- Jim
Kevin Graeme wrote:
>>Anyway, it's also a reasonable loss leader. iTunes is the gateway to
>>iPods - same way the Xbox is sold at a loss (about $100 at this point)
>>since MS is banking on people buying a number of games, which will put
>>the total amount revenue per consumer into the black... in theory :)
>>
>>
>
>The problem with that is, the RIAA is profiting from an intangible good that
>is infinitely reproduceable, while Apple is stuck with a limited market of
>hard goods that cost them money to produce. At some point, there will be a
>limit to how many people they can sell iPods to. And then you have companies
>like Dell and Sony creating their iPod spinoffs that don't require iTMS.
>Ultimately, as the article suggests, Apple will be left holding the bag. It
>gives them a potentially profitable, but apparently very short term business
>strategy.
>
>-Kevin
>
>
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