Apple didn't drop their DRM because of Amazon. They wanted to drop it before then, but the publishers in order to promote an alternative to iTunes made DRM-free music available to Amazon first. Apple dropped it as soon as they were allowed by the publishers. It was written into their contract that DRM was required. Steve Jobs talked about this in his "Thoughts on Music" post. It doesn't appear to be on Apple's site now (it was written in 2007), but you can read the whole thing at,
The relevant part is:
"The third alternative is to abolish DRMs entirely. Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat. If the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM-free music on our iTunes store. Every iPod ever made will play this DRM-free music."
http://macdailynews.com/2007/02/06/apple_ceo_steve_jobs_post...
The relevant part is: "The third alternative is to abolish DRMs entirely. Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat. If the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM-free music on our iTunes store. Every iPod ever made will play this DRM-free music."