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Apple launches iTunes Japan

Puts iPod into Japanese cars too

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Apple finally launched the Japanese version of its iTunes Music Store today, but less widely reported tie-ins with three major car makers will probably have a greater impact on the company's fortunes.

ITMS Japan will offer listeners a choice of 1m songs, available at either ¥150 ($1.35/£0.76) or ¥200 ($1.80/£1.01). Apple has began to introduce differential pricing in the US, with some songs from independent labels coming in above the 99c it initially established as the standard price. However, the Japanese store is the first to launch with multi-tier pricing up front.

Apple now operates stores for 20 countries around the world, with Australia the most notable absence from the list.

ITMS Japan has taken Apple some time to prepare, after undergoing some tough negotiations with the major labels there. Japanese labels have a far greater hold on the distribution of music than Western labels do. Hurdles the company has had to overcome include criticism of the strength of its DRM technology, the limitations the copy protection system imposes on songs, and the pricing. The Japanese store's prices are higher than the US store's, but comparable to the UK's.

Separately, Apple said Nissan, Mazda and Daihatsu have all agreed to build iPod-compatible stereos into their 2006 auto line-ups. BMW and its subsidiary, Mini, along with Smart and Alfa Romeo, have also said they will support iPod in-car entertainment in the Japanese market.

Apple claims the iPod accounts for 36 per cent of the Japanese MP3 player market, ahead of Sony (22 per cent), and Creative, iRiver and Rio combined (27 per cent). But it's clearly facing a harder fight here than, say, the US, where it has 74 per cent of the market, according to June figures from market watcher NPD.

Indeed, at today's launch, Apple CEO Steve Jobs made a point of highlighting that while 6m-odd iPods shipped the company's most recent quarter, Sony shipped only 2m PSPs. Clearly PSP is seen as a potential rival, though the markets the two devices nominally target are different.

The deals with the car-makers will help, by allowing broadening the number of environments in which IPod owners can use the music player, and through the brand marketing these companies will bring. Car salespeople are not going to tell prospective purchasers that the vehicle they are looking at can take an MP3 player, they are going to specify Apple's MP3 player. Even buyers who don't care about such things, are likely to be steered toward the iPod should they decide later on they need a digital music player.

Auto-makers can be powerful allies and demonstrate the 'iPod ecosystem' extends well beyond add-on carry cases and speakers. it's very powerful brand reinforcement indeed. ®

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