Pc Vs Macs

When purchasing a personal computer, buyers used to grapple with the decision: a Macintosh from Apple Computer or a Microsoft-based PC?

Microsoft effectively won that operating system debate years ago and claims more than 90% of the PC operating system market.

But in the push to legally sell digital music, Apple and Microsoft, and their incompatible file formats, are at it again. Consumers are in the position of having to choose as hardware makers line up behind either Microsoft or Apple's software format.

Hewlett-Packard's recent surprise decision to snub longtime PC partner Microsoft and offer Apple music software on its PCs shows how unpredictable this battle may be.

"Microsoft lost the first round of the digital music war," says Phil Leigh, an analyst with research firm Inside Digital Media. Apple's iTunes software "was good enough to persuade (H-P) . . . to switch. That's huge."

For now, Dell, which battles H-P for PC market share dominance, promotes music in Microsoft's Windows Media Audio (WMA) format on its computers -- as do most Windows-based PCs.

Likewise, most portable music devices sold today -- with the exception of Apple's best-selling and acclaimed iPod -- use Microsoft's format.

That means consumers who use portable music players and buy songs from Apple must use the iPod; consumers who purchase from non-Apple online music stores must use portable devices based on Microsoft's format.

Adding to the digital disorder: Sony is set this summer to launch yet another music service, Connect, with songs that can be transferred only to Sony devices, such as mini-disc players.

"There's a lot of confusion about different formats," says Mike McGuire, analyst with research firm GartnerG2. "But the digital music business is so young right now, nothing's permanent."

For now, H-P's decision strengthens Apple. H-P will sell Apple's iPod under its own name and use Apple's iTunes music software on PCs beginning this summer. In announcing the alliance, H-P CEO Carly Fiorina said it had been working on developing its own portable music player, but "concluded that Apple's iPod . . . and iTunes . . . were the best."

Despite the hoopla for the H-P/Apple deal, Microsoft says its momentum hasn't slowed. "You'll continue to see more (music) stores coming out in Windows Media," says Dave Fester, general manager of Microsoft's Windows Media division. Just Monday, Coca-Cola in Europe opened a new Windows Media-based online store. Others are in the works, including Microsoft's own.

The battle takes shape

Last year, Microsoft signed up company after company (including Wal-Mart, Musicmatch and Best Buy) to sell digital music in the Windows Media format. It clearly had the companies on its side -- even while Apple was winning the heart of consumers.

Apple effectively kick-started the legitimate digital music business last April with the introduction of the iTunes Music Store. Originally just for Mac users, Apple opened it to Windows users in October. Apple now claims sales of 30 million songs and a 70% market share.

Apple's iTunes success was helped by the smash success of the iPod. Some 735,000 were sold in the last quarter alone, and 2 million to date. Microsoft says there are 4 million portable devices that can play Windows Media -- including units from Dell, Creative Labs and Rio Audio.

Microsoft's Fester insists that the Apple/H-P deal will further confuse consumers. For instance, an H-P PC owner who buys a digital song at the iTunes store won't be able to move it to a non-Apple portable device -- like an H-P iPaq Pocket PC, which is built on Windows Media software. They can listen to it on their computer but not take it with them. "It's like buying a CD from Amazon.com, but Amazon is the only store where you can