The sad thing is that people are forgetting is that Apple could sell tunes to Palm Owners. All Palm has to do is devise a syncing program that reads Apple's Library XML like many pre-existing syncing programs (like one from MarkSpace) do and nobody would have any problem with that. Sure it may not be all that convenient, but it is certainly not Apple's obligation or best interests to actively make life easier for its competitors. I guess you can call that unfortunate, but thats how life is sometimes.
Overall, your point is accurate. iTunes does exist to sell Apple hardware. The success of the iPod, and the Nano have shown to be successful. Of course they arguably did not get that way just by iTunes - The iPod was a great player and the iPhone is a powerful product. But product association is not a guaranteed hit. The Apple TV is a great example of a product that is tied to iTunes and yet it's sales are disappointing - even Apple has admitted that and has basically ignored the product. Music sales are a very minor part of Apple's sales figures. I remember a breakdown of sales that mentioned that the lions share of money goes to the studios and overhead. Application sales can't be all that profitable since Apple doesn't charge for free apps (outside of developer subscriptions) and they take a small cut out of the paid apps. Apple also has to invest a great deal of money to improve the store and iTunes itself. One could argue that you can buy tons of music, use iTunes, and never pay apple a penny. But that is neither here nor there....
Indeed. The business model of iTunes is to sell hardware. That's been the case since the iPod was developed and expended to Windows. Its very similar to their business model to OSX - except the major difference is that Apple, by their own admission, is not interested in market share. They are in that business for profit of their own hardware.
ETA: Beaten to it!
. Why can't Palm make there own iTunes store ?
