Apple Rebukes RealNetworks Over Rhapsody Flap

Updated from 12:39 p.m. EDT

In comments likely to encourage rumors of an impending lawsuit, Apple issued a harsh retort Thursday to online music rival RealNetworks, which surprised onlookers earlier this week with news that it has cracked open the proprietary software for Apple's iPod digital music players.

In its statement, Apple accused Real of adapting "the tactics and ethics of a hacker" and said it's delving into the legal implications of its rival's actions.

In further comments aimed to undermine consumer interest in Real's offerings, Apple added, "We strongly caution Real and their customers that when we update our iPod software from time to time it is highly likely that Real's Harmony technology will cease to work with current and future iPods."

In a follow-up release, Real said: "Consumers, and not Apple, should be the ones choosing what music goes on their iPod." While Apple has invoked the digital Millennium Copyright Act in support of its position, Real said the DMCA "explicitly allows the creation of interoperable software."

On Monday, Real said it has developed software to let consumers play songs from its Rhapsody music store on Apple's iPods. The announcement was not welcomed by Apple, which designed iPods to only play music purchased from its own iTunes music store, and prompted a wave of speculation that Apple will respond in court. An Apple spokesperson said at the time that the company had no comment on whether it would file suit against Real.

Apple, which has long cast itself as the purist loner of the tech world, has lately reversed course in an effort to broaden the reach of its highly popular online music store and iPod technology. Over the past nine months, it's struck deals to extend its musical reach into non-Apple computers, high-end autos and even cell phones via arrangements with Hewlett-Packard, BMW and Motorola.

But it has shown no interest in working with Real, rejecting an offer from its competitor earlier this year to develop iPods into an open platform that would play music from Real's online store.

In recent trading, Apple was up 29 cents, or 0.9%, to $32.56, while Real was off 8 cents, or 1.4%, to $5.50.

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