In a well timed move it has been revealed that Amazon will be reducing the price of many MP3 music downloads to just 29p at a time when iTunes has announced the introduction of a variable pricing strategy. The range of pricing for iTunes tracks will now be 59p, 79p and 99p although we are yet to see exactly which downloads will attract the highest prices and which will attract the lower prices.
It is estimated that iTunes, the brainchild of Apple, controls over 70% of the MP3 download market although with Amazon determined to eat into its market share we could be on the verge of a significant price war. Whether we see a substantial movement in download trends in the short to medium term remains to be seen but if Amazon is able to fund a significant pricing war with iTunes there is every chance that current Apple clients will look elsewhere.
While Apple is unwilling to be publicly drawn into a pricing war there is no doubt that the company will at some stage respond with a raft of cheap downloads to try a muddy the water. Music analysts believe that Amazon is something of the "sleeping giant" in this particular field and if it can replicate past successes in different areas of the consumer market then Apple could have a fight on its hands. |
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