Amazon May Take On iTunes, iPod

Amazon is looking to get into the iPod/iTunes business. While it has been rumored for some time that Amazon would sell songs digitally, it seems that Amazon is taking a different tack than usual. Rather than developing the software for its music store in house, it looks like it will be outsourcing this step. According to the Wall Street Journal, Amazon is in talks with four digital music companies to set up a service with features that would set it apart. Amazon will also set itself apart by having Amazon branded MP3 players designed and sold at a steep discount if purchased with a subscription to their music store. Hoping to follow the model of the cell phone industry, Amazon will preload these MP3 players with tunes and sell them with a subscription. Will the idea of a free MP3 player and unlimited tunes be enough to convince people to fork over $15/month ($180/yr)? Will Amazon be able to sell enough subscriptions (they sell 10% of the MP3 players on the market) to cover their costs?