Best Buy’s Digital Music Store may swallow iPod and Zune

Apple and Microsoft have to get themselves ready to face one more competitor in the field of online music as the Best Buy Co., a retailer of consumer electronics and entertainment software on Thursday, has announced the launch of an online music store and portable device in collaboration with RealNetworks and SanDisk.

Headquartered in Richfield, Minnesota, USA, the country’s best retailer, with the aim to get access to the mass digital music lovers, has introduced the Best Buy Digital Music Store, a new service powered by the RealNetworks, Inc.’s Rhapsody 4.0 music service.

Best Buy also launched SanDisk Sansa e200R Rhapsody MP3 players that will come with built-in technology to work with RealNetworks' revamped Rhapsody music service, and will work with the Best Buy Digital service.

The way company used Real’s music service in SanDisk’s Sansa digital music players, it seems much like Apple’s iPods work with iTunes. Like Microsoft's upcoming Zune, the Sansa e200 Rhapsody device will come preloaded with songs. The company’s main focus for the preload was on the latest songs. And it will launch the service with an exclusive track from Diddy, synchronizing with his yet to launch CD, Press Play, which will strike the market on 17 October. On contrary, the preloaded Zune stuff will normally be from lesser-known, independent labels.

The Best Buy Digital Music Store and the Sansa e200R Rhapsody players are scheduled to launch Oct. 15.

The partnership among the three companies came in a time when the market is overwhelmed with the online digital services and devices. Best Buy and RealNetworks, a creator of digital media services and software will be jointly promoting the Best Buy Digital Music Store in connection with Sansa e200 Rhapsody devices.

Much alike Apple, the three are following the strategy to integrate player with digital music store. According to analysts, Apple's iPod, which is closely integrated with the company's iTunes store, boosted company’s sales and currently is the determined factor for more than three quarters of the market for portable music players. Like Apple, Best Buy also has its own music store and subscription service dubbed Rhapsody, which will power its Digital Music Store and SanDisk will provide a closely integrated device called the Sansa E200R.

"A third of the market doesn't buy iPods and want to be different - that market will be a natural for us," Rob Glaser, chief executive of Real Networks, asserted.

The newly launched Best Buy Digital Music Store offers both subscription and individual download services. Under the subscription download service, the user can get access to unlimited music listening for $14.99 a month and they can also buy individual downloads for .99 cents per song. With the launch, Best Buy is offering buyers of the Sansa a free two-month subscription with up to 30 hours of preloaded music already on the player.

This downloaded music can be either played on a computer or loaded onto the Sansa e200R Rhapsody, or even any compatible MP3 player, and can be listened time and again until the subscription expires. Though, Apple's iTunes also sells songs at .99 cents each, but does not provide a monthly subscription service.

A 2-gigabyte model of the Sansa player is priced at $139.99, which has the capacity to bear nearly 500 songs, compared with $149 for Apple's 2-gigabyte iPod Nano and the Sansa 8-gigabyte model is priced at $249.99.

After the announcement of the partnership with Best Buy, Real Networks shares jumped more than 4 percent on Thursday. Company shares closed up 4.49 percent or 49 cents to $11.40 at NASDAQ. Similarly, Best Buy closed 25 cents higher at $56.85 on the Big Board, while, SanDisk dipped 80 cents to $55.58.