7digital, Amazon, Napster, Zune, Rhapsody and all other DRM free retialers sell all downloads in the universal MP3 format which means they work on any iPod, any brand of MP3 player or mobile phone. The AAC file format is only compatible with iPods/iPhones and a limited number of other devices. So consumers who buy downloads from iTunes are still restricted to where they can play that music regardless of whether it's DRM free or not," Drury points out.
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New iTunes is DRM Free but It's Still Restricted
As Ben Drury of UK download provider 7Digital said in statement today: Downloads from iTunes are still in the AAC file format regardless of whether they are DRM-free."