Amazon Rumored to Be Plotting iTunes Challenge

Posted on February 21, 2006

Multiple nedia outlets are reporting on a story that originated in the Wall Street Journal that says Amazon is in talks with record labels about launching its digital music service including a digital music player. The Mercury News says is not commenting on the deal.
But analysts are mixed on whether it can do what Apple's competitors so far have not: Create a serious threat to the Cupertino company's successful iTunes online music and video store. And further, Amazon might be looking to create a portable digital music player to challenge the iPod, which dominates the U.S. market.

The Wall Street Journal reported on Thursday that Amazon executives are in "advanced" talks with four record label giants. The paper said the Seattle-based company is exploring the possibility of launching its own Amazon portable digital music player and subscription service offering discounted rates.

"We never comment on rumors and speculation," said Amazon spokeswoman Patty Smith. Apple did not respond to requests for a comment.

It's not the first time Amazon has been rumored to be getting into digital music. In August, reports pointed toward a possible September launch of a similar service, after two years of sporadic negotiations with music executives.
The Mercury News also mentions the conflicts Amazon would have if it launches its own digital music service and player because already sells MP3 players in its electronics store including the popular iPods from Apple Computers. The Ecommerce Times says geeks are calling the Amazon player the Apod and that Amazon would try to enter the market by offering low prices: "The rumors have reached fever pitch in recent days, and there were suggestions last week that Bezos plans to sell a cut-price Amazon music player bundled with a subscription to an all-you-can-download service based on the company's Web site."