We know there are better formats than MP3 today but getting mass adoption is difficult. Open source ALAC will give birth to new 3rd party supporting players, not to mention apple products already supports it & we have higher chances of mass adoption.
It doesn't make sense to use ALAC on mobile players. It's lossless so the file size is huge — you can't tell the difference between an ALAC file and whatever is sold in the iTunes store on a mobile device. Especially when the storage space is so little.
We know there are better formats than MP3 today but getting mass adoption is difficult. Open source ALAC will give birth to new 3rd party supporting players, not to mention apple products already supports it & we have higher chances of mass adoption.