They're right.
They always say Apple has almost the entire legal download market and harddrive based music players, which is great except that the market is so small!! What happens when downloading songs is the STANDARD way of acquiring music? What happens when almost EVERYBODY owns an mp3 player of some sort? Even the mp3 player market is small. When the market explodes, will Apple still be ahead? Not by this margin, no.
I have a feeling Apple's music endeavors will end up like Palm, and Palm had other people making PDAs with the Palm OS. Apple won't allow anyone else to make their player or use FairPlay. If Palm was so open with their stuff and couldn't survive MS, Apple's iTMS won't either.
If Apple licenses out, then maybe.