The two companies are coming at this with two completely different goals.
Microsoft is hoping to make a profit off of its proprietary format; WMA. It wants to do this by licensing the format to as wide a variety of applications, vendors, and music-players as possible. Having the WMA-format on the iPod would mean a real claim to cross-platform digital music.
Apple wants to sell iPods. The iTMS is making a minor profit -- but only exists in order to sell more iPods. It's a Trojan horse.
The way I see it, Apple has two ways to go on this. One is short-sightedly good for the consumer right now -- the other is better for Apple now and the consumer down the road.
The first being to simply license the WMA-format from Microsoft. Add support for it in iTunes and on the iPod. This could mean that people buying music through Napster would use iTunes as their jukebox of choice (and iPod as their player of choice).
Although this would mean an added choice to the consumer, right now, it would also strengthen Microsofts proprietary WMA filetype. That isnt good, in the long run, for anyone.
If Apple instead chooses to licence AAC/FairPlay, they'd be even better off.
Someone mentioned that Apple should licence it to Real, and I agree. They should. What better ways to leverage iPod sales, than to have two competing music stores support the player?
What could, however, put a dent in Apple's digital music armour, is if they did the "right thing", and started licensing FairPlay to not only music vendors, but music players.
This could mean a slight reduction in iPod sales, on the whole, but would, in the end, be better for the market.
If, however, Apple were to eat the cake and keep it too, by adding support for WMA on the iPod and in iTunes while wanting to licence AAC to other companies well, there wouldnt be much of a reason for vendors to pick AAC over WMA, would there? And wed be back on issue #1 again
(MS strengthening their proprietary format).
And, as I said, it would be in Apples best iPod-selling interest to licence FairPlay out to other music-vendors, but not to other music players. Even if the market at large, and the AAC standard, would be better off with FairPlay open to most any company that wanted it.
Is this a Microsoft-ish scheme? Why, yes. Yes, it is... But all is fair in love of Mac and war on Windows. Or something.
Then again, one *could* put confidence in the iPod selling on its own, and thus licence AAC even to other music vendors, just because it's better for the consumer.
