Amazon Undercuts Apple's iTunes

There's no denying that Apple's got itself a bountiful hold on the digital music market. The company's hardware retails for more than comparably-equipped devices from the competition, and yet the Touch, Nano, and Shuffle all manage to maintain the company's massive lead. However, that advantage might be threatened where Apple seems strongest: online.

For some time, Apple's virtual music store, iTunes, has been the front-runner in offering individual songs or entire albums for a reasonable price. Buying one song at a time has proven a dynamite marketing dynamic for Apple, which clearly recognized the disgust of many music aficionados with the average album. To many casual fans, artists simply haven't been putting together a dozen solid tracks, and the option to buy just the hits for $.99 has worked well for both the artist and the consumer.

Unfortunately for iTunes, rivals in the market are beginning to make some noise of their own. iTunes' greatest threat these days is Amazon.com, which has a few key tactics planned for flanking Apple's stagnant iTunes operation.

First, Amazon intends to give away 1 billion songs during a Super Bowl promotion next month. That alone should catch the attention of music fans. Second, and perhaps most important, Amazon will be dropping the price of its songs (when not free) to just $.89, eleven cents less than the average iTunes tune. (Source: nytimes.com)

Despite Apple's hold of about 75% to 80% of the digital download market, analysts believe Amazon can certainly chip into those intimidating stats if they continue to grab the public's attention. "Amazon definitely knows how to build a good retail experience, and the labels would like nothing more than to have some real competition for Apple," said a Jupiter Research associate. (Source: financialpost.com)

Given their recognizable, trusted name, Amazon certainly has a chance to change the face of digital downloads. A little competition could go a long way, even if it only means cheaper iTunes offerings.