Apple Wreckers

While Microsoft (Nasdaq: MSFT  ) towers over Apple Computer (Nasdaq: AAPL  ) on the operating system software front, we all know that the roles are reversed when it comes to digital music. Apple's successful one-two punch of its must-have iPod portable music players and its iTunes feed store has made the stylish player the market leader in digital music. Microsoft's response? In the words of the Red Hot Chili Peppers, the MSN Music online store is going to "give it away, give it away, give it away now."

Starting today, Microsoft's upstart music site will be offering a free download every day through Saturday. The daily freebie will be limited to the one editorial pick from Microsoft's MSN Music staff members that they think will win a Grammy in the song's nominated genre.

Of course, Mr. Softy isn't known for being the generous type. The five giveaways are being done to promote the fledgling service, and Microsoft is opening up the offer only to adults willing to pony up their credit card information. Why divulge your payment terms for a freebie? Well, Microsoft is naturally hoping that you will get hooked after the digital gifts and buy more in the future. That will turn many cheapskates away -- but that's probably the desired result.

In case you haven't noticed, things are starting to heat up when it comes to digital music. Napster (Nasdaq: NAPS  ) had no problem putting up the big bucks for Super Bowl ads comparing its new all-you-can-eat "Napster-to-Go" service to Apple's popular a la carte music shop. RealNetworks (Nasdaq: RNWK  ) is doing pretty well with its Rhapsody subscriber service, but despite its best intentions to hack its way into the heart of iPod users, this is still Apple's game to lose.

After 250 million digital downloads -- and another 200 million being given away through its promotion with PepsiCo (NYSE: PEP  ) -- Apple won't be easy to upseat. But that doesn't mean Apple isn't vulnerable. Some of its rivals are offering up compelling value propositions, and one has to wonder whether the specialized, commercial-free digital music channels from satellite radio upstarts XM (Nasdaq: XMSR  ) and Sirius (Nasdaq: SIRI  ) will eventually eat into the appetite for legal song downloads or enhance the hunger.

Either way, it's going to be an interesting time for the providers as they wrestle for supremacy, even if the promotional gimmickry proves crippling to near-term profits. Music fans: Listen up, because free legal downloads seem to be popping up just about everywhere.

For related Foolishness:

• Mo' Music From Microsoft
• The New Napster

Longtime Fool contributor Rick Aristotle Munarriz can set this take to a song if you would like. His band Paris By Air was once signed to Columbia Records. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.