Apple Computer Inc, maker of the iPod portable music player, is expanding into the music business with an online store where personal computer users can buy songs from the world's top five record companies.
The store will sell digital songs for US$0.99 each to users of Apple's Macintoshes. The record companies agreed to sell more than 200,000 songs through Apple, including those by groups like the Eagles that opposed other digital music services. Apple won't charge a subscription fee, and users can make unlimited copies of the songs on CDs for personal use.
"We think subscriptions are the wrong path. People have bought their music for as long as we can remember," Chief Executive Steve Jobs said at a press conference.
Jobs, who regained control of the company in 1997 after two years of losses, helped turn Apple around by focusing on PC design and software tailored for tasks such as managing digital music and photos. Jobs is relying on new products to spur demand at a time when many users see little reason to buy new computers.
"Jobs is willing to press ahead with novel ideas where other people won't," said Brett Miller, an analyst with A.G. Edwards Inc, which rates Apple "neutral" and makes a market for the shares. "We have a whole industry that's just sitting idle with a tonne of capabilities and nothing to do with it."
Apple shares, which have declined 40 percent in the past 12 months, rose US$0.51 to US$13.86 by 4pm New York time in NASDAQ Stock Market trading.
Apple is betting it can profit from a business that has so far been dominated by free file-swapping sites such as Kazaa and the now-defunct Napster Inc, which attracted more than 50 million users before lawsuits from the recording industry shut it down.
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