Apple and EMI - DRM Free future ?

Wow. Steve Jobs and EMI did it again, wrong-footing the market with an announcement stating that the entire EMI catalog (or the guts of it in any case) will be available, at a slight premium, DRM free. And at a higher bit-rate.

Where does that leave the other players ? Well, Microsoft-Watch's article here has focused on MS's recent DRM focus. Does this mean that MS's music strategy has been wrong-footed ?

(Oh, and bad news for folks who thought that X-Box 360's could play HD DVD's.. Ouch. )

Where does this leave MS's beleaguered Music strategy ? I wonder if Sony will join the DRM free world ?