Steve Jobs has always struck me as a Zen-styled capitalist charlatan, kind of like Jerry Brown with money. Nonetheless, he has earned my enduring respect with this open letter to the music industry, in which he suggests that DRM-protected music files should be abolished. The nut: “Why would the big four music companies agree to let Apple and others distribute their music without using DRM systems to protect it? The simplest answer is because DRMs haven’t worked, and may never work, to halt music piracy.”
Shows a lot of confidence in the iPod as well–DRM lock-in is one frequently cited reason why users won’t switch. I guess Apple created FairPlay simply because they didn’t want to license another DRM system. For example, using Windows Media DRM would have required them to sell songs in the Windows Media Format, which means the iPod would have to be able to play that format, which means Apple would have had to pay Microsoft royalties on every iPod sold (up to a cap of $1m per year, which is peanuts now but probably seemed like a lot at the time).
Meanwhile, a blogger at 10 layers has looked at current earnings growth and extrapolated into a future where Apple’s revenue surpasses Microsoft’s. I say it won’t happen–it would require iPod growth to continue at its current clip (impossible) or for Apple to have one or more huge hit products (very unlikely) or for Microsoft to stop growing completely (very unlikely). Still, it’s striking that Apple’s revenue is 50% of Microsoft’s today. Unimaginable 10 years ago.