Gates vs. iPod: Same Tune, New PlatformGates vs. iPod: Same Tune, New Platform

Bill Gates was being disingenuous (imagine!) last week when he said that the iPod has a limited lifespan because, in the future, most mobile music will be played back by smartphones.

Gates' mission last week was talking up the Windows Mobile update, which has stronger multimedia capabilities than previous versions of the platform. Bill's company is still trying to get its foot in the smartphone platform door, so it's not hard to figure out why Gates has a sudden interest in the future of the iPod.

But the story behind the story is about how online music is distributed. Characteristically, Apple started out with a blockbuster idea -- iTunes and iPod -- executed it superbly, then refused to change with conditions, closing off its system to developers, vendors and, ultimately, users. If you buy into iPod, you're buying into buck-a-tune downloads from iTunes.

Microsoft, however, is the force behind PlaysForSure, which is the technology behind the new subscription music services like Napster-to-Go and Yahoo's Y! Unlimited. For a relatively small fee per month (as low as five bucks for the Yahoo! service), you can download all the songs you want to your desktop and compatible device.

There are many reasons why Microsoft is getting into this business. Most obviously, whether it's this upgrade or the next, Windows Mobile will eventually be tightly-tuned to these music services, which many (myself included) expect to put the hurt on Apple's offerings. That, in turn, will make Windows Mobile more attractive to device vendors. It's reminiscent of how, more than a decade ago, Microsoft convinced IT shops that Windows clients worked best with Windows servers.

There's an even more powerful bit of deja vu here. As happened in the 80s and 90s, Microsoft is again attempting to put the hurt on Apple by making system software available to any vendor -- as long as they compete with Apple and its closed approach to system software. It's ancient history now, but Windows, as deployed by the Dells and Compaqs of the world, obliterated the Macintosh. Now, MP3 players from the likes of Creative Labs, iRiver and Archos -- and eventually smartphone vendors -- have a legitimate shot of obliterating iPod and iTunes.

As near as I can tell, the only way that Apple can come out of this with its iPod line intact in the next few years is to capitulate to Microsoft. Initially, Steve Jobs said that would never happen. Last week, though, he acknowledged that, while he still doesn't like the PlaysForSure approach, Apple's non-subscription theology isn't really a religion, meaning there's some room for Apple to save itself.