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Apple Unveils iTunes Store for Windows Users

The move is expected to boost sales of iPods and downloadable songs. The company also confirms a Pepsi deal.

October 17, 2003|Terril Yue Jones and Jon Healey | Times Staff Writers

SAN FRANCISCO — Declaring that "hell froze over," Apple Computer Inc. chief Steve Jobs on Thursday unveiled a version of Apple's online music store that works with the archrival Windows operating system.

Compatibility with Microsoft Corp.'s Windows is crucial to the success of Apple's iTunes Music Store and Apple's goal of selling 100 million songs online by April 28, the first anniversary of the service, Jobs said.

Since April, Cupertino, Calif.-based Apple has sold 13 million songs on its service.

The move also should boost sales of Apple's iPod music players, the only portable digital devices that Apple allows to work with the iTunes store.

Since the splashy debut of the Mac version of the Music Store in April, Apple has taken a leading position in the markets for portable digital players and downloadable songs.

"And that's without Windows," said Jobs, demonstrating the service at the Moscone Center in downtown San Francisco.

But Apple's Macintosh operating system is used on only about 2% of the world's PCs, whereas the vast majority, more than 90%, use Windows.

"They have to disconnect from Macintosh and become more broad-based," said Gartner Inc. analyst Martin Reynolds.

The strategy also is meant to attract more consumers to Apple hardware, said John Buckingham, with Al Frank Asset Management in Laguna Beach.

"It's geared to selling more iPods," said Buckingham, who helps manage $275 million in assets, including 60,000 Apple shares. "It's like the old Schick-Gillette strategy: Give customers the razor, but sell them the blades. This is the opposite: Give customers the blades, and sell them the razor."

By early next year, up to a dozen companies are expected to offer downloadable-music stores, including Dell Corp., Amazon.com Inc. and Yahoo Inc. And several plan to offer combinations of a la carte downloads and subscription services.

Songs downloaded from the Windows-compatible version of Apple's Music Store for 99 cents each can be burned to compact discs a virtually unlimited number of times. They also can be transferred freely to iPods or copied onto three computers simultaneously -- the same flexibility Apple offers for Mac users.

Jobs confirmed a Thursday report in The Times that Apple would team up with PepsiCo Inc. in a promotion to give away 100 million songs next year.

Apple also will partner with America Online by adding an "iTunes" button next to songs on AOL's own music service.

More than 16 million people use AOL's radio stations and other music services each month, and at each stop they'll be able to buy songs from the AOL-branded iTunes store, said Evan Harrison, vice president of AOL Music.

But iTunes may just be a temporary offering for AOL, which is developing its own downloadable-music store with MusicNet -- an online distributor that Time Warner Inc. co-owns with two other major media companies and RealNetworks Inc.

Apple shares fell $1.57 to $23.25 on Nasdaq.

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