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Friday, September 15, 2006

Can Amazon Flank The iPod?


Merrill Lynch analysts have been following the new Amazon Unbox movie and TV download service with great interest. Part of their observations is that the new product from the online book seller will work on a number of devices and will start with 1,400 movies from 20th Century Fox, Paramount Pictures, Sony Pictures, Universal Pictures, Warner Bros., MGM and several independents.

By way of contrast, the Apple iTunes platform works on the iPod. The new Apple video download service begins with movies from Disney. That's it. Of course, Steve Jobs positions as Disney's largest shareholder and board member may have helped.

The iPod and iTunes platforms have the advantage of representing by far and away the largest portable multimedia platform in the world. Players from Sandisk have a tiny percent of the market. The Microsoft Zune has yet to launch.

So, Amazon has a window, but it is small. According to Merrill, Apple's base of iPods is 57 million. But, its limited library of movies will make video downloads for the iPod less attractive. At least for now.

If Amazon does not "hit the crease" as they say in hockey, they will have to pack up and go home.

Douglas A. McIntyre can be reached at He does not own securities in any of the companies that he writes about.

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