Sony admits defeat to iTunes

Sony had been trying for 3 years now to defeat iTunes in the market for digital music sales. And Sony is not a small player, after it is a conglomerate with a big studio, builds a variety of electronic devices and fast selling mobile phones, but it does not have an iPod. But Sony has also been scoring self-goals in its fight with the emergence of the Apple-iTunes combination. It was slow to adopt MP3 (doing so only in 2004), but its music players have remained locked to Sony's online music store (the same as Apple with iTunes), but this constraint did not work for most people. For the iPod after all, it was the much appreciated design that got people buying iPod's and then getting locked onto the iTunes store. In addition, Sony has been lagging behind the iPod in terms of features, with video incorporation happening only this year.

Sony Corp.'s three-year effort to beat Apple Inc.'s iTunes Music Store is over. The company, which is one of the largest movie, music and consumer electronics companies in the world, said Thursday that it will be closing down its Connect Music Store in Europe and the U.S. In its place, Sony is adding Microsoft Corp.'s Windows Media technology to its music players and allowing consumers to download copy-protected content from numerous Windows Media-compatible music stores on the Internet, including those from Napster, Audible.com and WalMart.
Its first players weren't compatible with the fast-growing MP3 format and would only play Sony's proprietary ATRAC format -- something that didn't find favor with consumers. MP3 was eventually added in late 2004 but the players have remained locked to Sony's online music store for music purchases -- until this week's adoption of Windows Media. On the hardware front Sony has also had trouble keeping up with Apple. A video version of the iPod was launched in late 2005, but the same features weren't added to a Walkman player until April this year when devices went on sale in Europe. Walkman players with video still aren't available in the U.S. but will go on sale from September, Sony said Thursday.

This would be a big shock to Sony, it is not often that Sony has admitted defeat, but in the current case, it must not have been able to see any projections that would have enabled it to at some future point of time take on iTunes and win. But better to cut your losses and run.