Best Buy Joins SanDisk, Real Networks Against Apple's iPod

Best Buy Co. Inc. (BBY) on Thursday said it will introduce a new music service with digital music player maker SanDisk Corp. (SNDK) and music software company RealNetworks Inc. (RNWK) to create the latest competing service to Apple's (AAPL) iPod and iTunes combination.

Best Buy, the top U.S. consumer electronics retail chain, said it would use Real's Rhapsody subscription service.

The service is designed to work hand-in-hand with the new line of SanDisk Sansa e200R Rhapsody digital music players, much in the way that iPods work with iTunes.

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The service and players will both be available starting October 15.

Several major device manufacturers and software makers have been trying to make a dent in the dominant market shares of Apple's iPod digital media player and its compatible iTunes Store software.

ITunes has an 88 percent share of legal downloads in the United States, while the iPod has well over half of digital music player sales. SanDisk is a distant number two in that market.

In the last two months, Microsoft Corp. (MSFT), mobile handset maker Nokia (NOK), Sony Ericsson and Samsung Electronics Co. Ltd.have all announced their plans to offer music download services combined with new devices.

Microsoft is making the highest profile push with its Zune brand portable media player, which is launching in time for the U.S. holiday season.

The companies are hoping to emulate Apple's success by offering a seamless service between device through to software.

"The customer expects everything to work together," Jennifer Schaidler, vice president of music for Best Buy.

Best Buy said it will throw its promotional weight behind the new service, offering buyers of the SanDisk Sansa player a free two-month subscription to its music store allowing consumers unlimited access to millions of songs during the period.

But users won't be able to listen to the songs after the promotion expires if they don't sign up to the service. The subscription download service is normally priced at $14.99 a month, and users can also buy individual downloads at 99 cents a song.

Apple's iTunes also sells songs at 99 cents each, but does not have a monthly subscription service.

The Sansa player is priced at $139.99 for the 2-gigabyte model, which holds roughly 500 songs, compared with $149 for the 2-gigabyte iPod Nano listed on Apple's Web site.

The Sansa 8-gigabyte model is priced at $249.99, comparable to the 8-gigabyte iPod Nano.