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As an Apple shareholder, one of the most frustrating things I?ve encountered is Apple?s refusal to license out its Fairplay AAC codec to third party vendors. Not only does this hurt Apple customers who have purchased music from the iTunes Music Store and are unable to play their music on non-Apple hardware, but also hurts Apple itself since competing DRM (digital rights management) protected codecs (namely Microsoft?s Windows Media) can establish strongholds throughout the industry and gradually squeeze out Apple?s Fairplay DRM.
This is among the most shortsighted strategies I have seen from a company. While Apple is currently riding on its iPod?s success, consumers are busily purchasing iPods not so much for their technology, but because of their ?neat? scroll wheel which has made the iPod the current trendy item to have. As iPod?s novelty fades, so will Apple?s iTunes stronghold and its Fairplay DRM. Apple must realise that its current success in the portable media player market is not guaranteed indefinitely for the future, and it must actively seek additional methods to spread the use of Apple technologies while generating profits through licensing. If Apple began licensing out its DRM now, it could capitalise from licensing royalties from third party players, which would not likely hurt iPod sales whatsoever, but allow Apple to push aside Windows Media and establish its Fairplay as the music DRM industry standard. If Apple neglects to license its DRM technology, it will only see a rise in Windows Media use which will inevitably lead to Apple being forced by consumer pressure to add Windows Media playback to the iPod, and see its Fairplay DRM fade away into the shadow of Window Media.
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