Recently, someone (I believe it was Nicholas Carlson) said to me: “what most people forget about the iPhone is that it is also a very capable iPod."  This was said in the context of a discussion of how successful Android will be this year.  Now this is an interesting alternative view to Bill Gurley’s assertion that the head-on comparison is wrong because Android aims at the much broader market of folks who have feature phones today. But: for everyone who wants to upgrade from a feature phone and already has a lot of DRM'ed content in iTunes the iPhone still makes a ton of sense (and that is a lot of people).

Palm’s approach to this was a series of ultimately futile attempts to let the Pre sync with iTunes. That was an attempt at competing by being compatible. Another approach is to compete by doing the same, in the form of music stores, such as Mewbox (Android), 7digital (working with Blackberry), or amazonMP3.  But that kind of a head-on competition doesn’t provide much of an incentive for folks to switch.  Anyone with DRM'ed content would have to repurchase that content.

Instead, leapfrogging seems the way to go.  At home, we have had a Sonos with Rhapsody for a while and the subscription model works incredibly well.  What has been wrong though is the price point, at least for broad adoption on mobiles.  Now, however, it looks like we will soon be getting $9.99/month subscriptions streaming (I have been testing a service on my Blackberry) and love it).  That to me is the answer for how Android and Blackberry should compete with the iPhone when it comes to content and I certainly hope that video won’t be far behind.