News Archive for 05/03/07

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Analysts: Apple may be forced to offer subscription

03/07, 9:00am

iTunes subscription

Online subscription services from Napster and others are beginning to put pressure on Apple to allow users to "rent" music, reports Reuters. "The only reason they have iTunes is to sell iPods. If it turns out subscription services are important to sell iPods, they'll probably get into that business," said Jupiter Research analyst David Card. Card expects by 2009 that subscriptions will outpace downloads, generating $890 million in revenues versus $800 million for download sales. "We think many millions of people will be buying 5 to 15 downloads per year versus fewer, a few million, who will spend 10 to 15 dollars a month for subscriptions." Shares of Apple fell 5 percent or $2.33 a share after Napster raised its current quarter revenue forecast to $15 million from $14 million. Napster said demand for players compatible with its service from iRiver, Creative, and Dell was strong.