The Apple-EMI deal has done more than trigger a possible collapse of DRM. It may also lead to Advanced Audio Coding (AAC) as a standard for music players, according to Business Week on Thursday.

The various music formats that music players can play can be confusing. Those who don’t pay attention can draw the wrong conclusions. For example, the Microsoft Zune can in fact play AAC music (but without the FairPlay DRM). The Apple iPod can play MP3s. Music sold-on line is in MP3 format, but in a protected mode. It’s confusing to many -- except to Apple now that they’ve struck a deal with EMI to sell unprotected songs in 256-kilobit AAC format.

"Having floated the rhetorical trial balloon for selling unprotected music files via iTunes in his landmark essay "Thoughts on Music," Apple Chief Executive Steve Jobs in hindsight appears to have been deliberately ambiguous about the file format he preferred. It’s now clear why. He didn’t mean selling unprotected MP3s, but unprotected AAC songs. The decision will have important long-term effects, especially as more labels follow EMI’s lead," Arik Hesseldahl wrote.

The momentum now is to quickly move to the most popular de facto standard, that used by the iPod, AAC, and that means that Microsoft’s Windows Media Audio (WMA) has been left instantly out in the cold. "AAC-format supporters include some notable names," Mr. Hesseldahl observed, "including Microsoft’s Zune. So come May, the 16 people who own one will be able to buy EMI tracks from iTunes and presumably play them on that device. Sony’s (SNE) PlayStation Portable also supports the format, as do a few of its Walkman-branded MP3 players."

The net result, in the author’s view, will be that on-line stores that sell music in WMA format "will be forced to consider jumping into the DRM-free AAC camp, and thus become "iPod compatible," and in so doing become competitors of iTunes. Apple will be fine with this, because in its range of priorities, anything that sells more iPods can only be a good thing."

With all the momentum now on the AAC format, it may not be long before Microsoft has to throw in the towel on WMA and settle on AAC. The author reflected,"Think of it: Microsoft labeling its second Zune player as ’compatible with iTunes.’"