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iTunes 'will win in Europe'

Analysts predict great future for Apple

Apple Computer's highly publicised iTunes music store stands to win prime place in the European download market — though Roxio's Napster service is in the running too, analysts say.

Forrester Research predicts: "The European music-download scene will turn around in 2004. Many consumers who have routinely downloaded for free will become resigned to paying for legitimate services. Portals will benefit first; Apple's iTunes and Napster will win in the long run."

Forrester senior analyst Rebecca Jennings observes that attempts to stop illicit downloading in Europe have failed, urging new commercial digital music distributors to "be patient as the market gradually changes". She expects a wave of legal action by the music industry and the introduction of legitimate services to "cause a watershed" in the market.

The research looks at the OD2-supported portal services, and innovative London-based P2P service Wippit as examples of the developing European market.

"The various distributors are all trying to establish an early mover advantage in the embryonic European commercial download market. Portals will take an early lead, Coca-Cola will fizz, but most consumer goods firms will fall flat, and iTunes will bite back," she says.

Jennings predicts that portal-based services will dominate while Europe awaits the introduction of iTunes and Napster. Her prognosis for Apple remains positive, however.

"Over time, Apple's ease of use, seamless linking with the hot iPod, and enormous brand traction will see it overtake many of the smaller services in Europe as has happened in the US. Napster may give it a run for its money in the ease of use stakes but will suffer from lower brand awareness in Europe," she said.

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