(Updated: see below) Well, the Apple-RealNetworks Harmony controversy has blown up and I’ll be documenting it in almost real time time (no pun intended!)...more to come later.

So first, Apple has released a terse statement: a “stunned” Apple accused RealNetworks of adopting the “tactics and ethics of a hacker” with the release of its Harmony software. “It is highly likely that Real’s Harmony technology will cease to work with current and future iPods,” the company said in its statement.

Then, RealNetworks released a counter statement: it contends that consumers, not Apple, should be the ones controlling which music files can be played on their iPods. In the statement, Real says the DMCA is not applicable to Harmony. (Full statement here)

So now, I’ll bring in other bloggers and analysts into the play:

—Fred Wilson: “I think this is blowing what Real did way out of proportion. For example there are a bunch of software applications that allow you to print to a PDF file that aren’t made by Adobe. There are a bunch of programs that allow you to create .xls and .doc programs that aren’t sold my Microsoft. Have these developers “hacked” into Acrobat, Word, and Excel? I don’t think so.”

—Derek Slater: Some legal perspective to this, and links to other legal views on this.

—Forrester’s View: As Apple’s 70 percent market share in portable devices and downloads erodes, the iPod maker could be forced to license its format or once again see a market it created swarmed by Microsoft-compatible hardware and software.

—Dan Gillmor: “I’m no fan of Real’s sometimes slippery ways, but if you don’t like Real you don’t have to use its service. To deny people who want more choices in how they use their iPod, however, strikes me as illogical.”

—Siva Vaidhyanathan: “If Apple is smart (as it occasionally is, but rarely in this domain) it will welcome Rhapsody users. Tethering may be the hot corporate move of the moment. It may be what all the consultants are pushing (corporate consultants are basically anti-competitive). But it’s ultimately bad business and - when backed up by law - bad public policy.”

—Yankee Group analyst Michael Goodman: “I think we’ll see Apple knocking out Harmony and Real applying fixes to reconnect to the iPod,” he said, likening the quarrel to the IM interoperability war between Microsoft, AOL, and Yahoo.

—Forbes.com: It’s important to consider two multi-billion industries that have thrived despite their proprietary technologies.

—James DeLong: “If society wants to encourage innovative devices, such as the iPod, then the innovator should be able to choose its strategy for exploitation. Real can compete by partnering with other device makers or by starting its own integrated business, but it should not be allowed to wait until Apple has run all the risk—the iPod was no sure thing—and then demand to share in the rewards.”

—Umair Haque: “I’ve argued time and time again that iTunes is not the kind of radical innovation that is going to disrupt the media industry - it’s the same old business model with a nose job. This is a great example. Apple’s goal, now threatened by Real, is not to disrupt or even to change industry structures, but simply to maximize it’s position - to become a monosponist.”

—Om Malik: “This is clear capitulation on part of Real Networks, and its failure to gets it own online music service going.”

—Bill Thompson: “Both [Apple and RealNetworks] choose to present themselves as friends of the people, offering us a liberation that we only need because our digital freedoms have been eroded. Perhaps it is time to uninstall RealPlayer and trade in my iPod.”

Related:

—RealNetworks Plans to Sell Songs to Be Played on iPods

—For Apple, Harmony Is Off-Key

—Apple Exec Cancels Keynote After RealNetworks’ News