Oh it's on: Amazon MP3 vs. iTunes

Quite a bit happened Tuesday at T-Mobile's conference introducing the G1, the world's first Android-based phone. Sure, it offers GPS, apps, and an open platform to make every iPhone lover cringe, but one major announcement that many have glossed over is the inclusion of Amazon.com's DRM-free MP3 store pre-loaded on each Android phone.

On October 22, thousands of people will be introduced to DRM-free music and Amazon's store. Many of those people won't know the value of owning DRM-free songs and others may wonder what Amazon's MP3 store is. But once they find out for themselves by downloading songs onto their G1, you can bet that they'll never look back at iTunes again.

Why? It's simple really: iTunes is a locked-down service that will only let you play your songs on Apple devices. Quite the contrary, Amazon's DRM-free store will let you download songs online or now, on the G1, and let you take that song to any other device you wish. Want to add it to your iTunes library? Go for it. Want to put it on your Zune? What are you waiting for?

Sure, we've known about this for quite some time--the store already has 6 million songs, you know--but there is a huge base of people who have used iTunes for so long that they don't even know what's out there. Some may not want to switch and will continue using iTunes, but now that Amazon's store is slowly gaining some of the limelight, Apple should start paying more attention to Amazon's offering.

There are two main issues working against iTunes: its songs are slightly more expensive (generally) than the same songs on Amazon's service and the record labels don't want to play nice.

It may only be 10 cents, but saving that much actually matters to people. And when you can buy a song and bring it with you wherever you'd like, it only makes sense that you'd want to buy an Amazon song instead of the same track from iTunes.

But the only reason all this is possible is because the record labels simply don't like Apple. Apple has tried to make its case and coax the record labels into a DRM-free deal, but they wouldn't budge--except for EMI--until Amazon came along.

And while Amazon has been successful and the company is making in-roads, it's still a long way from competing with iTunes, the world's largest music retailer. But the only reason why is because Amazon didn't have the platform it needed to promote its store and become a real competitor to iTunes.

Think about it--Amazon doesn't have a PMP to link its store to and until today, it didn't have cell phone integration. But now it does have that cell phone integration and it's in the same market as the iPhone's iTunes app. Granted, the G1 probably won't sell nearly as well as the iPhone 3G, but we can't forget that the G1 is just one device of many that Google and its partners will be rolling out over the next year.

And that's when the real competition will start.

Google's foray into the cell phone market is just as much a battle with Microsoft as it is with Apple and Research In Motion. The company is providing software for vendors and now that Amazon has signed on, it's following Google in its drive to become the most powerful mobile software company in the space.

Can it happen? It's debatable. Apple and RIM have a stranglehold on the cell phone market and we can't count Microsoft out yet either. But given consumer desire for a touch-screen device that can "do it all", there's no reason to suggest Android can't become the platform of choice a few years from now.

And if that happens, look for Amazon to become the music service of choice around the same time.

One of the keys to Apple's success with iTunes was its ability to provide hardware users with a real need to use its software. Now that the Amazon store is available on Android devices, Amazon has that luxury too.

The fight is on. Amazon isn't just an online service to buy songs any longer and it's slowly moving into the space where most believe the future really is. G1 owners will be able to download songs directly to their phones and become acquainted with all the benefits that go along with buying songs from Amazon's store.

It may not be panic time yet, but Apple better keep a close eye on Amazon's partnerships and growth over the next few months. Once more people catch wind of DRM-free songs at a generally cheaper price, Apple may be faced with some serious trouble.

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