If the music cartels pull Apples lisences it won't affect Apple much because the consumer will still be able to buy and use their iPod.
The problem comes in when consumers want to get new music.......where they will either get it illegally or from some other source. Which means this tactic will likely backfire on the cartels.
My guess is that someone will develop a way to convert (CODEC) those .mp3s to the I-pod format. Then you can download all those "pirated" tunes and play them on that I-pod.
The music companies still don't get it. They are living in the past and have no real intention to evolve and adapt to the new future. They really need to get some new blood into the biz and shake it up... a paradigm shift. For whatever reason, the big labels insist that they can milk that cash cow for years to come. Instead of realizing they can reduce their distribution and physical production costs to make up for a portion they are giving up as part of their old business model. Truly amazing.
My guess is that someone will develop a way to convert (CODEC) those .mp3s to the I-pod format. Then you can download all those "pirated" tunes and play them on that I-pod.
Why would you have to convert them? iPods have always played mp3s.