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The iPod (and iTunes) would play unprotected mp3 files just fine. You could rip a CD to mp3's or download mp3's from Limewire or Napster and pull them into iTunes and the iPod without any problem. It just wouldn't play DRM-laden files that were not Apple FairPlay. Apple had no reason to support third-party DRM on their system.

Yeah this is probably the most absurd thing I have ever heard.

That's like me making a computer that only runs my proprietary 'cool play' apps (Apple DRM), and all normal windows, OS X and, Linux apps. Then someone suing me for not being able to play emulated Wii U games on my new computer.
 
The DRM in those days was mostly for show IMO. My first MP3 player was a Sandisk Sensa. I bought a fair amount of DRM protected music from iTunes to play on it between 2006 and 2009. All you had to do was to burn it onto a CD from itunes and then to rerip that CD into Windows Media Player or Napster (the later legal version) as a new MP3 file. Then move it onto your non-apple player. Yes, there was redundancy, but you had multiple backups including physical media, which is still the best back up source. It was just as easy to go the other way - from 3rd party to Apple, which is what I did with my first ipod.

Doing what you suggest would result in audio quality LOSS since you are re-encoding something with MP3 that already is missing most of its information. The 2nd pass then throws out MORE information. Repeating this will lead to seriously degraded audio and it is simple to test/demonstrate. Just do it multiple times (you don't have to actually dump to CD; just convert back to wav and then back to MP3 again and again and listen to the results). The only way to avoid that and still use it in something like iTunes would be import with WAV, AIFF or Apple Lossless (or FLAC outside of the Apple ecosystem). This way you're at least not degrading the audio further than it already was by buying it in MP3 form in the first place.

Oh come on... it's not that bad ;)

Some people are more sensitive to digital lossy encoding than others. I cannot stand low bit-rate MP3s. That "pumping" sound and steely highs sound just awful. Tapes tended to get less dynamic and introduce more hiss and lose highs. Yes, it was noticeable, but it didn't sound like the frequency was shifting on cymbals.

You're giving the impression that the results will sound like crappy AM radio.

Even AM radio doesn't produce the types of horrid distortion low-rate MP3s had at 128kbps and less rates. AAC at 128kbps is MUCH better, but it's not really transparent until 256kbps. MP3s need 320kbps, IMO to sound transparent. Even then, some will say they are inferior. But then some say CD sound isn't good enough either (the whole 24/96 thing, despite the fact that those specs are beyond human hearing limits and digital filtering arguments ignore technological improvements made since the CD first came out).
 
I don't see what the issue is... It's the same as a game console or phone or other system it just happens to be music. Anyone could of purchased another device if you didn't like buying the music from them. And they still allowed you to pull music off of CD or play MP3... About 50% of the music on my iPod was from CD's.

I didn't like that it didn't work with Windows, but that was fixed...

LoL... Worse than what apple did is the utter ignorance that it's a problem by lots of the "apple faithful".........
 
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