I’m not surprised at all. They’ve got higher quality files (256kbps vs 128 for iTunes), lower prices, iTunes integration, and the more portable MP3 format. While I love my iPods, I’m not that enthralled with the iTunes store or being locked into the iPod via their AAC format. Even though iTunes does offer some music in 256kbps AAC with no DRM, it never seems to be the stuff I’m looking for.
All we need now is for one of them to offer a lossless format.