Apple Helps Napster

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Did Apple (Nasdaq: AAPL) fear Napster, or what? How else to explain the official press release yesterday, explaining -- in an almost "hey, look at me!" fashion -- that "Music fans purchased and downloaded 1.5 million songs from Apple's iTunes Music Store during the same period that Napster reported selling 300,000 songs during its first week of operation."

Apple seems almost surprised at its success, but it shouldn't be. Napster may have once been the biggest name in the game. Heck, it was the game. This was the service that kicked off the file-sharing revolution and enjoyed dominant market share until the record industry -- Time Warner (NYSE: TWX), Sony (NYSE: SNE), Vivendi's (NYSE: V) Universal Music Group, EMI, and Bertelsmann's BMG -- forced it to shut down in 2001. Now, after Roxio (Nasdaq: ROXI) bought the company at a bankruptcy auction and secured deals with the major labels, it has reopened for business.

Yes, the name may be worth something, but millions of music fans have done just fine without it for two years, and it's going to have to fight for new business just like anyone else.

iTunes, meanwhile, is well-established as legal file-sharing's top dog. It has 80% market share, according to Nielsen SoundScan, even after Napster's re-launch. It blew away the music industry's lame initial attempts by offering a large catalog of songs at reasonable prices, all while allowing users to burn those songs onto CDs or transfer them to portable devices.

Apple's market dominance is certainly far from secure, but it's off to a great start. It need not issue press releases that give free publicity to fledgling competitors.