This. I think Apple is convinced that 3 months is enough time to get customers in the HABIT of using their service such that they'll look at the new $10 charge

This. I think Apple is convinced that 3 months is enough time to get customers in the HABIT of using their service such that they'll look at the new $10 charge on their iTunes bill, shrug their shoulders, and go back to listening to music. The whole "no royalties" thing is just Apple playing hardball to try to minimize the cost of the free trial. Personally, I think they should subsidize some of the smaller/indie labels that can't afford the 3-month drop, but that's plan F or even M for Apple.