Online Music May Not Be the Same Old Song

It's become a tired axiom that in technology, low-cost commodities trump innovation. That idea will be put to the test when Apple(AAPL Quote - Cramer on AAPL - Stock Picks) squares off against Dell(DELL Quote - Cramer on DELL - Stock Picks) and Napster 2.0, two heavyweights soon to debut in the online music business.

While the potential of the music business itself remains a question mark, hardware players are racing to get into the game in a bid to boost sales of pricey digital music players. Since opening its iTunes online store in April, Apple has already seen sales of its iPod music player nearly quadruple.

Dell, which will soon roll out its own branded digital music player, likewise wants to goose sales by unveiling an online music store. And if this were like most tech scripts, the Round Rock, Texas-based powerhouse would clomp in, undercut Apple on price and start stealing share straightaway.

But the online music business just may be different.

Gadget lovers rave about the quality of Apple's music offerings, both from the software and hardware side. Sometime this fall the company will unveil a Windows version of the music store, broadening its audience far beyond the roughly 3% of the computer users who can now access iTunes through their Macs.

Another soon-to-be-competitor in online music, Napster 2.0, owned by Roxio(ROXI Quote - Cramer on ROXI - Stock Picks), is expected to grab a broad audience on the strength of its name and extensive playlist, likely to number more than half a million titles (compared to Apple's 200,000). It's teamed up with Samsung to develop its own digital music player, optimized to work with its online offerings.

It's difficult to judge how competitive Dell will be, since it hasn't yet said how much it would charge for songs or outlined how many songs it will offer. But for all its marketing muscle, Dell may find it tough to dislodge Apple and possibly Napster from leading positions in the business, given their respective advantages in consumer-friendly technology and buzz.

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