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Starbucks to offer tunes -- Zune? i-Tunes?

Posted Jan 29th 2007 2:34PM by Tom Barlow (RSS feed)
Filed under: Products and Services, Microsoft (MSFT), Apple Inc (AAPL), Starbucks (SBUX), Marketing and Advertising

After deep-sixing their CD burning experiment and pushing their own line of CD's at the register, Starbucks Corp. (NASDAQ:SBUX) is preparing to dip further into the music scene by offering MP3 downloads. Last week Starbucks' head Howard Schultz said that the company would probably roll out the new program within the next year and a half.

The market has responded with confusion and skepticism. The primary question for most is Apple Inc.'s (NASDAQ:AAPL) involvement. Already the market driver, some wonder what would tempt Apple to share the take with Starbucks. Schultz may have tipped his hand in this respect by referring to MP3s, a universal music format that iTunes does not provide.

Microsoft (NASDAQ:MSFT), on the other hand, might have great interest in such a partnership to push their new Zune player, their attempt to horn in on the Apple personal music and portable video empire. After they failed to break the iPod's lock on sales during the past Christmas season, MS might be looking for some strong cross-marketing opportunities.

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