Now Apple's business model is under attack - by 26-year-old hacker Jon Johansen. Johansen, of Norway, has decoded iPod's Digital Rights Management (DRM) encryption, known as FairPlay, according to reputable sources.
Johansen is making his hack available - for a licensing fee - to businesses seeking to sell hardware competing with iPod, and download sites competing with iTunes.
Note that Johansen's hack does not remove DRM from downloaded songs. It actually adds DRM, to trick iPods into thinking that a given song has been purchased via iTunes.
If this hack takes off, will the closed business model fall apart?
Hardly. Johansen's decision to market his hack through licensing agreements means that your average teen music-lover is not suddenly going to find his music collection iPod-compatible. Instead, she will have more choices of legal music sites, to download songs that will be iPod-playable.
The effect of this may be to lower the industry-standard pricetag of $.99 per song. Apple could face real competition from other sites that can now sell legal music to load into those insatiable iPod hard drives.
Something to consider for Microsoft Zune... if the hack was figured out for iPod, can a Zune hack be far behind?
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