Ok, so to recap: France's lower house passed legislation that will force Apple, Sony and everyone else to open their DRM, effectively mandating interoperability. As expected, Apple complained loudly, averring that the legislation amounted to "state-sponsored piracy:"
"The French implementation of the EU Copyright Directive will result in state-sponsored piracy," said Apple spokeswoman Natalie Kerris. "If this happens, legal music sales will plummet just when legitimate alternatives to piracy are winning over customers."
I'm not alone in opining that the lady doth protest too much. Bear Stearns analysts Andrew J. Neff, Bill Hand and Ted Chung were sanguine about the legislation's impact on Apple:
"We believe that interoperable DRM could increase the appeal of iPod to [a] wider consumer base by providing them with different options for online music purchase[s]."
Well, since we're all huffing and puffing about this, I'm gonna risk going Bill O'Reilly by asking, "How important is France?"
Shaw Wu, an analyst at American Technology Research, told Reuters that less than 5 percent of Apple's overall revenue comes from sales of iPods and iTunes songs in France.
If Apple sincerely believes the legislation will unravel the razorblade model it's got going with iPod/iTunes, then it wouldn't seem to be risking much by simply walking away from France. But if French lawmakers succeed in convincing their counterparts elsewhere in the European Union to adopt similar legislation, then there's only so far Apple can run.
Personally, as a voter, I'd prefer that competition, rather than government, be the force that compelled Apple to open its system, as competitors would be forced to step up and whip Apple straight up with better products. But if better products always won the day, we'd have been replacing Betamaxes instead of VHS players. There's a lesson looming in all this, but I suppose it hasn't shown itself yet.