Is Amazon Ready To Take A Bite Out Of Apple's iTunes?

It was an announcement that, on the face of it, couldn’t have come at a worse time for Apple.

Just as the company unveiled a new price range for its iTunes music store last week, which means songs will now cost between 59p and 99p, Amazon rather quietly launched plans to sell more than a 100 tracks on its rapidly rising online MP3 store for just 29p.

The bargain basement price (seriously, 29p!) includes songs that range from pop to classical and new (Lady Gaga’s ‘Poker Face’) to old (Neil Young's ‘Rockin' in the Free World’), and is expected to last indefinitely.

In the ongoing war to crack Apple’s digital download dominance, Amazon’s move last week was an audacious one - but is it enough? Indeed, are Amazon even ready to take a bite out of Apple’s iTunes store?

Since it launched in 2003, iTunes has, thanks largely to its innate connection to the iPod, sold over 6 billion songs around the world. (iTunes currently passes a new billion milestone on average every six months.) The store boasts for than 10,000,000 songs and, more impressively, last year overtook retailer Wal-Mart to become the biggest music seller in the US.

Overall, these figures mean iTunes current share of the legal digital download market lies roughly between 80 and 90 percent. Suddenly, the odd 29p song doesn’t sound like that big of a deal, does it?

Well, in short, it isn’t, or, at least, not yet anyway. While Amazon’s price cut is certainly a bold move - the first real challenge to Apple -it’s unlikely to make a dent into the company’s dominance.

Amazon MP3 – and other music stores for that matter – still face two major hurdles, which just to make it more difficult, are also linked.

1. iTunes has become synonymous with the digital download.

Not only is the store attached to the iPod (which has sold over 151,000,000 units worldwide), it also recently began selling music that’s free of Digital Rights Management technology (DRM). This means downloaded songs can be used with virtually any portable MP3 player.

2. The alternatives – Amazon MP3, 7digital – aren’t, as yet, as practical to use.

A large part of iTunes success is thanks to the software’s location on users’ computers, and more recently, mobile phones. At present, users to rival stores still have to download tracks via Internet sites, although 7digital's recent partnership with Songbird suggests this could change in the future. But still, special offers, such as Amazon's occasional £3 promotions on some new albums, have yet to prove enticing enough.

Of course, these hurdles aren’t insurmountable. Indeed, of all the competitors, Amazon is perhaps best placed, with a library of more than 5,000,000 songs. It is also a well established household name thanks to its position as the market leader in online book retailing. But lets not forget, it didn’t have to overcome a competitor as big as Apple to reach that position.

If Amazon wants to really sink its teeth into iTunes then offering songs for 29p is going to have be just the tip of the iceberg.