[diablojota]

Well, at the moment, you can still buy music from iTMS, then burn it to a CD. Then you can reencode this as an mp3, thus allowing the media to be placed onto any mp3 player.
If Apple where to start slipping with regards to quality, that is when there are many, many firms who'll be able to jump in and compete at that point. For example, Sony would be primed to go if that were to occur, and they would have access to the record labels, as they own one of the largest. Microsoft will also have the capital to go after this goal as well.
Apple would never boycott the record companies. That would be suicide if they were the monopoly. Why bite off a source of 2 streams of revenue? That would mean that their iPod line would stop selling, as well as their iTMS songs.
There won't be an opportunity for Apple to be alone in this arena. Microsoft will be there to keep Apple innovating, and on its toes. Even though microsoft suffers from the inability to develop quality and easy to use products on their first go, they can throw tons of money into a project and eventually catch up.
For Apple to maintain its dominance, they will have to stay at the forefront. Steve Jobs, while an amazing executive, can't keep up with every little part of the process. The corporate culture at Apple won't allow for shoddy products to be released.