Robert Cringely writes:
Is Apple selling iPods to sell music, for example, or selling music to sell iPods? It is most decidedly the latter. Based on a claimed 1.5 billion song sales at $0.99 each, Apple has made gross revenue from music sales of just under $1.5 billion since 2001. Yet in the same time period the company claims to have sold 60 million iPods, which represent (at an average $200 price) $12 BILLION, or EIGHT TIMES as much revenue. So the game is about selling razors, not blades, at least not yet.
…
Apple deliberately repositioned its movie offerings to be better than broadcast quality but less than DVD quality and quite a bit less than HD-quality. Doing so saves on bandwidth (though less than you’d guess — moving NerdTV from 320-by-240 MPEG-4 to 720-by-480 H.264 increases the required bandwidth by only about a factor of two, the new codec is so much more efficient), but it is also politically expedient when thinking about Wal-Mart, Best Buy, and Target — the three largest sellers of DVDs and, not at all coincidentally, the three largest sellers of iPods, too.
