Leave it to Apple Computer to swim against the flow.

At about the same time as the recording industry announced the launch of a series of legal actions against online song downloaders, Apple unveiled new 20 gigabyte and 40 gigabyte versions of its iPod digital music player.

In a press release this week Apple said its 40 gigabyte version can hold up to 10,000 songs. Separately, Apple said music fans have purchased and downloaded over ten million songs from its online iTunes Music Store.

That is a purchase of about an average of 500,000 songs per week since the service was launched four months ago. Apple promises to make the iTunes Music Store available to Windows users by the end of this year.

However, Apple has not said when the service will be available to music lovers living outside the US. Apple's online music store offers songs from major and independent music labels for just 99 cents each. Users can purchase and download their favourite songs or complete albums as digital files.

The system allows users to burn songs at no extra cost onto an unlimited number of CDs for personal use.

The songs can be played on up to three computers and listened to on an unlimited number of iPods. This is a reasonable solution to the problem of illegal downloading of music, and I'm sure many were converted to become paying customers.

While Apple was celebrating its smart approach to music sales the Recording Industry Association of America announced it had filed hundreds of lawsuits against individual music downloaders, accusing them of illegally downloading and sharing pirated songs over the Internet. The 261 lawsuits were filed in US federal courts on behalf of the organisation's members, including Universal Music Group, BMG, EMI, Sony Music and Warner Music.

The RIAA also said it would grant amnesties to people who admit they illegally share music online. They must promise to delete any illegally downloaded music and not participate in illegal file-trading again. What does this mean for music downloaders in Bermuda?

First, you are shut out from Apple's cheap and liberal iTunes service. Secondly, you are breaking copyright laws by downloading songs from file sharing services like Napster, Morpheus or Kazaa. I believe that most people do not mind paying a fair price for music if such a service is available. But they are faced with paying a high price online for songs (to download a music album on AOL's service would cost you more than the price of a CD), and a high price for CDs from a store. The fact facing the music industry right now is that it is paying the penalty for its gouging on the price of CDs and albums. Illegal downloading of songs online has in part been driven by this fact.

How do we know we are being gouged? Universal Music in effect admitted that disks were overpriced when it announced last week it would slash CD prices as much as 30 percent. Universal said it would lower its prices for a CD to $9.09 from $12.02. This means retailers could sell CDs for as low as $10 instead of the $16 to $19 currently charged.

We should also not forget that in February 2000, the US Federal Trade Commission found that the major record labels had acted together to keep CD prices artificially high in the stores. The FTC estimated consumers had overpaid by as much as $500 million for music CDs between 1995 and 2000. After the ruling 43 states took the record companies to court for price-fixing. The companies agreed to pay $64-million in cash and $76-million in donated CDs to settle the case.

I hope that with the FTC keeping its investigatory scrutiny on the industry that other record labels will also lower their prices to acceptable levels. Then we should look carefully at music retailers to see whether they choose to lower the prices or take higher profit margins. Whether the music industry will then allow more legal online music at acceptable prices to become available worldwide is anybody's guess. Let's call this decision time for an industry that has so far resisted change.

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Tech Tattle deals with issues in technology. Contact Ahmed at editoroffshoreon.com