Apple Vs. Apple: What the Beatles Recordings Holder’s Claim that ITunes Violates 1980’s Agreement Means for the IPod Guys

IPod fanboys beware – your days could be numbered if a firm with the interests of the original Beatles has its way.

For the third time, multimedia rights trustee Apple Corps Ltd., which oversees the collective works of the Beatles, is going to court over Apple Computer – this time with the claim that iTunes violates a noncompete agreement between the two entities.

According to the history of the conflict, it was first a name dispute; then it was over the music capabilities of the Macintosh computer system (meaning, for the record, that Macs can now edit and play – but not explicitly create – music). Now the fight centers around whether or not the iTunes Music Store equates to participation in the music business, a forbidden territory for Apple Computer resulting from the first legal battle between Apple and Apple if you will pardon the pun.

The idea is that iTunes has become so popular that it also has become something of a music business mainstay, a fact that Apple Corps plans to use as proof that Apple Computer has crossed the line set forth by the agreement. Apple Computer, on the other hand, believes that iTunes is more of a content delivery system for digital media sales than a music publishing service and therefore should be exempt from the agreement.

And while there is no denying there are two sides to this argument, the case could have devastating effects for Apple Computer’s iPod strategy, which as we all know by now centers solely around iTunes for digital content portability – meaning you can’t just buy from Napster or MSN Music and expect iPod compatibility. Not as long as Apple plays its current strategy, anyway. And as we all know by now, the reverse is true as well.

But what if this latest dispute forces Apple Computer to close its iTunes businesses in the United States and elsewhere? In that case, the iPod is dead in the water unless Apple Computer makes some sort of emergency plan with Microsoft Corporation to produces an iPod firmware patch that’s certified for the Vole’s Plays for Sure iPod alternative marketing – and as long as iTunes stays around, that’s not as likely to happen as it would otrherwise be. In other words, if iTunes survives this one, iPods stay locked to it; if Apple loses, then there goes the neighborhood – and the iPod could be opened up to Windows Media as a last-ditch attempt to remain in the MP3 player game.

Apple Computer is no doubt feeling the pressure. According to MarketWatch, Apple has stated, in lieu of issuing a more detailed comment, that “unfortunately, Apple [Computer] and Apple Corps now have differing interpretations of this agreement and will need to ask a court to resolve this dispute.” And Apple Computer has every right to proceed with this approach. Because if Apple Corps wins round three, it’s the end of iTunes, and the end of the iPod as we know it. And that would change the digital media game so drastically that it’s not even funny. For now, we’ll just have to see how it plays out.

On a related note, Apple Computer has already had to make one minor change to the iPod – the company has recently answered the ever-present complaints about speaker volume – especially where earbud use is involved – with a firmware update that allows users to set a maximum decibel level for their music.

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