Below is an excerpt from the book "1,001 Things They Won't Tell You," which was published in May 2009 and highlights popular columns from SmartMoney's long-running "10 Things" feature.
Since launching the iPod in 2001, Apple has been the undisputed leader in digital music players, owning 70 percent of the market. What has set the iPod apart is not only its hip, user-friendly design but also its companion iTunes music store, the first online audio megamart, offering an ever-expanding catalog of songs for purchase at the click of a mouse. This two-pronged approach has given Apple a huge lead over competitors; so far the company has sold over 120 million iPods and more than 4 billion songs on iTunes. But the iPod’s days at the top may be numbered.
At issue is Apple’s proprietary format, which up until recently has made iTunespurchased music incompatible with other non-iPod MP3 players. According to Chris Crotty, former senior analyst for consumer electronics at iSuppli, such closed systems either move toward compatibility or get surpassed by the competition. Apple has seen the writing on the wall—in January 2009, it unveiled its plan to make it easier for consumers to recode music into the more standard MP3 format. Good idea, according to the experts. “Over time the market prefers open systems,” Crotty says.