Instead of going head-to-head against the world's leading digital music distributor, RealNetworks' Rhapsody has taken the more subtle approach in competing against Apple's iTunes - by embracing the iPod's MP3 format.

Rhapsody advertises itself under the slogan "Music Without Limits". This current strategy ties in with its different partners - iLike, Yahoo!, MTV Networks, and Verizon Wireless - to help connect consumers with digital music wherever they are and however they want it.

Boasting a selection of over 5 million songs from major music labels, such as Universal Music Group, Sony BMG Music Entertainment, Warner Music Group, and EMI, the Rhapsody MP3 Store offers tracks for US$ 0.99 a pop and most albums for US$ 9.99. Since music purchased off the MP3 store is unshackled by any Digital Rights Management (DRM) software, any tracks and albums bought from it can be seamlessly downloaded into Rhapsody, RealPlayer or iTunes.

It has yet to be seen whether this strategy will indeed reflect a pointed growth for the company. Analyst David Card of Jupiter Research described Rhapsody's new tact into the digital music distribution business quite appropriately by saying: "I think we'll see retailers begin to compete the way they usually compete with pricing, merchandising and promotions, rather than due to some arbitrary technology".