Apple Seeks Royalties for "Made for iPod" Logo
Apple Seeks Royalties for "Made for iPod" Logo
by , 6:40 AM EST, March 17th, 2005
Apple Computer is asking third party iPod accessory vendors for as much as 10% of their wholesale costs in exchange for the right to use a new "Made for iPod" logo that would certify an accessory as approved for the digital media device. The program was announced in January, 2005 at Macworld Expo, but a report from CNet News on Wednesday offered new details on the program.
According to the news outlet, Apple at one time was asking accessory manufacturers for 10% of retail pricing for the right to display the logo, but recently changed that to 10% of wholesale pricing. Apple has not confirmed or such pricing information, but did tell CNet News in a statement that:
"With more than 400 iPod accessories on the market and growing, the Made for iPod logo program is designed to help consumers choose iPod accessories that work properly with their iPods, and also provide participating iPod accessory makers with guidelines and technical specifications to develop their products."
Piper Jaffray Gene Munster supports the idea of a licensing fee for the logo would help the company advertise the iPod, and that Apple could see as much as US$25 million a year from such licensing.
"The risk is the outside chance that they upset one of the people that are helping build this economy," Mr. Munster told CNet News. "The reality is this whole ecosystem is dependent on Apple anyway. Apple has a bigger opportunity to tax that."
The two page article has much more information on the story, and can be found at CNet News.
Observer Comments
I'm not sure I like this accessory tax idea. Companies that choose not to participate will likely feel their products are second-class citizens in the iPod marketing ecosphere, while those who opt-in to the program will make less money, leaving them less room to innovate and build the market.
I would imagine the Apple people know better than I how to run their business, but this just seems too greedy.
IF all the money they collect relly goes back into advertising the iPod then this could be a good idea. You know like how milk farmers all pay the milk council money ad they run "milk" ads? A deal like that could be good for all of these small companies in the long run.
But I'm afraid Apple will have a hard time convincing everyone that they're really using the money this way and not just saving it in the bank. Perhaps they should create a small sub-company designed only to collect these fees and re-use them in ways that benefit the iPod.
Thu Mar 17, 2005 9:10 am Subject: I'm insulting you again iLemmings
Thu Mar 17, 2005 10:21 am Subject: What is the usual fee?
The 10% royality struck me as high also, but I do not know what is the usual fee. What do other businesses charge?
QuoteSteve W wrote:
I understand why they're doing it; "iPod" is a registered trademark and they have every right to restrict how it's used. Ten percent seems a little high, though, and accessory makers are rightly going to wonder just why they should pay such a toll.
Thu Mar 17, 2005 10:30 am Subject: Next iLemmings Will Have To Pay For Apple Tattoos
Thu Mar 17, 2005 11:15 am Subject: Re: Next iLemmings Will Have To Pay For Apple Tattoos
I am a proud mac owner and have been for years and own an original and current ipod and don't care much for windows or microsoft's business plan. But let's be honest - if this article was about Microsoft, everyone here would be screaming through the roof about how greedy and evil they are - and no one would ever suggest that such a policy might benefit the little guy.
I love Apple products, but Apple is not a charity or a philanthropic organization - it is a business - driven, in the end run, by the bottom line, just like every other company - fortunately, it does what it does with great style and design and makes excellent products (imho the best in the industry), but they can be just as greedy, self-important and cut-throat when it comes to doing business as anyone else.
So, a "made for iPod" logo is going to guarantee product compatibility with my iPod? Yeah right! Apple can't guarantee its own products, let alone anyone elses. This is just a business tactic to get more money. Apple better watch out, before they become the next Microsoft with hackers targeting them.
Apple makes excellent products, but the consumers pay the premium. Not only do we pay high prices to beta test product (Apple is notorious for releasing defect-ridden product), but we have to shell out for warranties too.
You can never make too much money.
I agree that 10% of wholesale is a little high, though that's pretty close to what the NFL gets from most manufacturers that decorate sweatshirts and coffee cups with team logos. Most colleges get 8-10%.
However, this is a bit different. Having an "officially licensed" logo not only protects Apple (and the trademarks it owns), but also adds perceived quality to the end user. The 10% rate will probably scare off some of the lesser-quality vendors/manufacturers, and therefore protect the quality vendors in return. The non-licensed people can still manufacture and sell accessories that fit the iPod, thay just hafta say they are for "digital music players" or the like.
I still say 10% is high, tho. 7-8% would be more appropriate, IMHO.
Thu Mar 17, 2005 12:15 pm Subject: "Made for Microsoft" is already here!! a.k.a. &quo
QuoteGuest wrote:
But let's be honest - if this article was about Microsoft, everyone here would be screaming through the roof about how greedy and evil they are
Microsoft already does it:
From the MS "PlaysForSure" licensing page:
"You will need to separately license and implement several technologies from Microsoft in order to be fully PlaysForSure-verified. ... Some of these Microsoft technologies have an associated fee for licensing."
http://www.microsoft.com/windows/windowsmedia/Consumerelectronics/p4skit/p4s_1.aspx
http://www.playsforsure.com/WhatIsPlaysForSure.aspx
Thu Mar 17, 2005 12:17 pm Subject:
QuoteGuest wrote:
So, a "made for iPod" logo is going to guarantee product compatibility with my iPod? Yeah right! Apple can't guarantee its own products, let alone anyone elses. This is just a business tactic to get more money. Apple better watch out, before they become the next Microsoft with hackers targeting them.
Apple makes excellent products, but the consumers pay the premium. Not only do we pay high prices to beta test product (Apple is notorious for releasing defect-ridden product), but we have to shell out for warranties too.
You can never make too much money.
Please do provide links to proof that Apple is notorious for releasing defect-ridden products. Defects do happen in any product line from any company, and Apple is no exception. But to call them defect-ridden is a baseless claim.
And EVERY COMPANY makes you pay for extended warranties. Some will give them in promotions, but that is very much the exception (to make it seem like you are getting a good deal on your Dell).
Please check your facts before commenting.
Thu Mar 17, 2005 12:56 pm Subject: Re: If the makers get taxed, you get taxed
QuoteAnonymous wrote:
The people who make iPod accessories are just going to turn that new cost on the the consumer. Thank you Apple for increasing the prices on accessories of all things.
Don't bet that it will be passed on to the consumer, especially if it is based on the wholesale vice retail price. Many (not necessarily all) will consider this a "cost of doing business" and absorb it, since the benefits to them (and there are benefits to the accessory manufacturer) outweigh the cost.
Did anybody actually read the article? Not many manufacturers are complaining about this change. Most understand the benefits. And it is not an unusual approach for a company to take (Apple's approach).
Apple is howling how pat-right charging 10% for its itunes songs is unreasonable and now wants 10% of the GROSS wholesale price (not of profits) on all such items. If this were microsoft we would all be howling MONOPOLY BASTARDS. This is outrageous. I hope they lose the pat-right case.
Honestly, apple is acting like a charicature of corporate pond scum. Suing kids. Taxing the community that is adding to its success FOR NO VALUE ADD (logo my a$$). Attacking the 1st amendment. It's hypocrisy seems to know no bounds, and it's conformist zombie loyalists follow and justify every bad move like a bunch of lemmings.
QuoteGuest wrote:
Apple is howling how pat-right charging 10% for its itunes songs is unreasonable and now wants 10% of the GROSS wholesale price (not of profits) on all such items. If this were microsoft we would all be howling MONOPOLY BASTARDS. This is outrageous. I hope they lose the pat-right case.
Honestly, apple is acting like a charicature of corporate pond scum. Suing kids. Taxing the community that is adding to its success FOR NO VALUE ADD (logo my a$$). Attacking the 1st amendment. It's hypocrisy seems to know no bounds, and it's conformist zombie loyalists follow and justify every bad move like a bunch of lemmings.
I forgot to add, systematically targetting their resellers by using predatory trade practices (you know, the very same ones that carried apple on its back through the dark years).
Unreal. this company is total scum. I really hate that they make good products and I have to deal with such a scummy entity to get them.
QuoteGuest wrote:
a fact, apple is THE highest rated computer manufacture in Consumer Reports for customer satisfaction service.
not one of the highest, but the number one.
period.
So what. that is no justification for acting like a petty tyrant dictatorship and all around pond scum actions. It's like saying that Dr. Mengalov was the #1 surgeon of the time, so that must justify his other horrific practices. Get off the junk man.
Thu Mar 17, 2005 1:16 pm Subject: Re: crazy
QuoteAnonymous wrote:
Apple is howling how pat-right charging 10% for its itunes songs is unreasonable and now wants 10% of the GROSS wholesale price (not of profits) on all such items. If this were microsoft we would all be howling MONOPOLY BASTARDS. This is outrageous. I hope they lose the pat-right case.
Honestly, apple is acting like a charicature of corporate pond scum. Suing kids. Taxing the community that is adding to its success FOR NO VALUE ADD (logo my a$$). Attacking the 1st amendment. It's hypocrisy seems to know no bounds, and it's conformist zombie loyalists follow and justify every bad move like a bunch of lemmings.
There is no evidence at this time that pat-right has a case. It is called a nuisance claim.
The rest of it I will leave alone since it is an obvious troll.
I don't know if it's right or wrong to suggest royalties, but there's now a million dollar industry built around ONE product - the iPod. Some of these companies should thank they ground Apple walks on for creating the flipp'n thing. (Doesn't mean they owe Apple money, but for alot of companies iPod products have been very profitable.)
QuoteGuest wrote:QuoteGuest wrote:
But let's be honest - if this article was about Microsoft, everyone here would be screaming through the roof about how greedy and evil they are
Microsoft already does it:
From the MS "PlaysForSure" licensing page:
"You will need to separately license and implement several technologies from Microsoft in order to be fully PlaysForSure-verified. ... Some of these Microsoft technologies have an associated fee for licensing."
The cNet article points out that Microsoft certifies some equipment as "Made for Windows XP" but doesn't charge for the certification. The "PlaysForSure" is a little different because they're charging you to use their DRM, while the Windows XP certification just says the computer meets the right specs. It sounds like Apple's iPod certification will be more like Windows XP than PlaysForSure and I think 10% of wholesale is too much. What's to certify? "Yup, the plug works and nothin' blows up when you plug it in." That's not worth 10%.
As always, I could be full of prunes too.
I read it and yes it did not seem that none of the 3rd parties are in too much of lather. Furthermore the article says "Piper Jaffray analyst Gene Munster said the benefits to Apple outweigh the risks."
Other than headphones, I would want to know that a charging cable or something that I connect to my iPod is not going to do any damage.
QuoteIntruder wrote:
Did anybody actually read the article? Not many manufacturers are complaining about this change. Most understand the benefits. And it is not an unusual approach for a company to take (Apple's approach).
Quote
The cNet article points out that Microsoft certifies some equipment as "Made for Windows XP" but doesn't charge for the certification.
Maybe they don't charge for the use of the sticker, but in most cases those systems that have the sticker also have Windows XP preloaded. Hence where Microsoft gets their money.
As for the Made for iPod... well, it's a volentary program, so if not enough people bite at 10%, Apple can always lower it.
QuoteIntruder wrote:
Don't bet that it will be passed on to the consumer, especially if it is based on the wholesale vice retail price. Many (not necessarily all) will consider this a "cost of doing business" and absorb it, since the benefits to them (and there are benefits to the accessory manufacturer) outweigh the cost.
Did anybody actually read the article? Not many manufacturers are complaining about this change. Most understand the benefits. And it is not an unusual approach for a company to take (Apple's approach).
What's that?
Whishfull thinking economics?
QuoteSmall White Car wrote:
IF all the money they collect relly goes back into advertising the iPod then this could be a good idea. You know like how milk farmers all pay the milk council money ad they run "milk" ads? A deal like that could be good for all of these small companies in the long run.
But I'm afraid Apple will have a hard time convincing everyone that they're really using the money this way and not just saving it in the bank. Perhaps they should create a small sub-company designed only to collect these fees and re-use them in ways that benefit the iPod.
Like thoose money are coming from the sky. Thoose money will came from mine and your pockets mister.
QuoteAnonymous wrote:QuoteSmall White Car wrote:
IF all the money they collect relly goes back into advertising the iPod then this could be a good idea. You know like how milk farmers all pay the milk council money ad they run "milk" ads? A deal like that could be good for all of these small companies in the long run.
But I'm afraid Apple will have a hard time convincing everyone that they're really using the money this way and not just saving it in the bank. Perhaps they should create a small sub-company designed only to collect these fees and re-use them in ways that benefit the iPod.
Like thoose money are coming from the sky. Thoose money will came from mine and your pockets mister.
So?
"They'll have to pay a tax to have a "Made for Mac" label stapled to their foreheads."
Only if they were a Macintosh accessory. Come on, at least think your JOKES through.
"Apple makes excellent products, but the consumers pay the premium. Not only do we pay high
prices to beta test product (Apple is notorious for releasing defect-ridden product), but we have to
shell out for warranties too. "
Apple makes excellent products, but they're notorious for releasing defect-ridden products? You should take lessons from more accomplished liars, like Reality Check. He doesn't contradict himself in a single post.
"Apple is howling how pat-right charging 10% for its itunes songs is unreasonable"
That patent case is a sham. The company filing the complaint is saying that since Apple didn't patent Fairplay, then they must be using their particular DRM patent. That's like saying if you aren't me, and the queen of England isn't me, then you must be the queen of England. Charging Apple 10% per iTunes song isn't unreasonabe, it's comething they literally can't do, because there's no hope of their complaint succeeding.
"Honestly, apple is acting like a charicature of corporate pond scum. Suing kids. Taxing the
community that is adding to its success FOR NO VALUE ADD (logo my a$$). Attacking the 1st
amendment.
"
Let's see. Suing kids? Do you mean the one that broke the NDA he signed, and the one involved with releasing a trade secret that wasn't at all within public interest, which is against the United States' law? Yeah, you're right. What a blackhearted monster Apple is, going and protecting itself. They should let themselves be driven out of business.
As for attacking the 1st amendment, you must not have followed the story. It has nothing to do with the first amendment, it has everything to do with leaking a trade secret. Apple's a corporations, and corporations have laws protecting them. They even have rights. And one of those rights is to keep secrets so long as those secrets aren't illegal or harming anyone.
And about taxing the community, maybe it's a good things, maybe it isn't. It all depends on whether or not that 10% goes into seriously advertising the iPod.
"It's hypocrisy seems to know no bounds, and it's conformist zombie loyalists follow and
justify every bad move like a bunch of lemmings."
What hypocrisy? They haven't leaked another corporation's trade secrets. They haven't broken any NDAs. They aren't complaining about the taxes they have to pay.
If you wan't to talk about lemmings, then let's try you. You don't understand the ThinkSecret case or the ruling on it, you don't understand the NDA case, but you jump in screaming that Apple is evil. You even say Mac fans justify every bad move Apple makes, when there are plenty of Mac fans on this very thread who've said they aren't sure the 10% Apple wants is exactly a good thing.
You're just calling them a terrible corporation becuase some other people are. You remind me of those punks who buy a nice shiny pare of Nike sneakers at Wal-Mart and then crusade against corporate evil.
Also, I forgot to add..
" I really hate that they make good products and I have to deal
with such a scummy entity to get them."
Really? That's funny, because you don't have to deal with them. So either you're lying, or you haven't heard of thriftshops, eBay, and independant Mac retailers. Or can't you go to any of them?
"So what. that is no justification for acting like a petty tyrant dictatorship and all around pond scum
actions. It's like saying that Dr. Mengalov was the #1 surgeon of the time, so that must justify his
other horrific practices. Get off the junk man."
Why don't you actaully check the facts and read the thread, instead of cluelessly jumping in? That was in response to somebody lying through their teeth and saying Apple was notorious for making shoddy products. It wasn't a justification for anything. It was debunking a lie.
QuoteSmall White Car wrote:QuoteAnonymous wrote:QuoteSmall White Car wrote:
IF all the money they collect relly goes back into advertising the iPod then this could be a good idea. You know like how milk farmers all pay the milk council money ad they run "milk" ads? A deal like that could be good for all of these small companies in the long run.
But I'm afraid Apple will have a hard time convincing everyone that they're really using the money this way and not just saving it in the bank. Perhaps they should create a small sub-company designed only to collect these fees and re-use them in ways that benefit the iPod.
Like thoose money are coming from the sky. Thoose money will came from mine and your pockets mister.
So?
You must be a very good christian!
I mean you HOPE that Apple will do something worthwile with your money.
But then again you might just buy headphone without apple's label.
QuoteAnonymous wrote:
You must be a very good christian!
I mean you HOPE that Apple will do something worthwile with your money.
But then again you might just buy headphone without apple's label.
I just might.
If one brand wants to charge extra because of this, fine. I'll simply buy from the companies that decide to absorb the cost. Some will do it that way, and they'll be the ones I buy from.
Rewarding the lowest cost provider is what capitalism is all about.
I have NO idea what being a "good Christian" has to do with smart shopping.
[quote="Small White Car"]
QuoteAnonymous wrote:
If one brand wants to charge extra because of this, fine. I'll simply buy from the companies that decide to absorb the cost. Some will do it that way, and they'll be the ones I buy from.
Rewarding the lowest cost provider is what capitalism is all about.
there is for sure one company wanting to charge extra. its apple.
and about manufacturers absorbing apple's 10% ... yeah wright!
They will make a sticker reading "costs absorbed"
QuoteAnonymous wrote:
and about manufacturers absorbing apple's 10% ... yeah wright!
We shall see, but it's not unbelievable. A lot of these 3rd party items are $40 or $50 for a piece of plastic that costs much less to make. They can charge that much because they're the only ones making that particular product and they were the first to think of it.
And good for them. They should charge whatever they can get. But as competition increases and other companies come out with similar items, which one will win? The one with the lowest price, plain and simple. If the company can find a way to absorb the cost they absolutely will, because it can mean the difference between selling a lot or none at all.
The reaction to this is so out-ot-bounds.
No one selling accessories for the iPod is in any way required to participate in this program. They've ben doing quite well for a long time now without it. They only need to pay a royalty to place a trademarked logo "Made for iPod".
Now as to the 10% of wholesale, I personally think it's rediculously high. But not one of the vendors has to pay it (and if they're really smart, they wont unless the price drops substantially).
The "Made for iPod" logo is meant to make a person think that the product it endorses is "better" for your iPod than one without it. My concern is, is that what it really means?
Does the presence of the logo mean that Apple has worked with the accessory manufacturer and applied rigorous testing to the accessory in question? Or does it simply mean that the accessory manufacturer is funneling money to the component suppliers of whom Apple approves?
In the first case, the logo does add value, and could well be a good thing. In the second, it's just a deceptive marketing ploy that doesn't improve the quality of the products for the consumer.
The story says that "An Apple representative declined to discuss any fees or royalties associated with the program, what the requirements are to take part, how products earn certification and whether such certification will be required of products sold in Apple stores."
That's the sort of thing I'd want to know before I accorded such a logo any importance in my purchasing decisions whatsoever. If it's just a case of "pay up, or your product will never appear in an Apple store" then yes, Apple is behaving badly.
Oh, and in response to some of the trolling above--the article notes Made for iPod logo will only apply to accessories with an electrical connection to the iPod, like chargers and car adapters and cables and such; not to cases or other cosmetic accessories. Secondly, Apple does offer a Mac logo program (to show compatibility with OS X) that doesn't require fees, which is exactly like Microsoft's "Designed for Windows XP".
Comments are currently closed. Please email the author instead.
Recent Headlines - Updated February 9th
- Wed, 10:46 PM
- Product News - White MacBook Finally Meets Its End
- 10:20 PM
- News - Microsoft Echos Apple’s Call for FRAND Standards
- 5:59 PM
- News - Air Force Might Replace Manuals with 18,000 iPads
- 4:30 PM
- Product News - Vonage Mobile for iPhone Offers Free Texting, Calls
- 4:03 PM
- News - iPhone App Path Uploads User Contact Lists to Servers [Update]
- 3:02 PM
- Deal Brothers - 13” MacBook Pro 2.4GHz Dual-core Intel i5: $1,019
- 3:00 PM
- Quick Look Review - Akron’s TAB802 Table Mount For iPad Is Sturdy
- 2:05 PM
- News - Paul McCartney to Stream Live Performance on iTunes, Apple TV
- 11:13 AM
- News - Sprint Activates 1.8M iPhones, 40% are New Customers
- 10:08 AM
- Hot Forum Topic - Reader Discussion: Email App Feature Wish List
- 9:34 AM
- News - Apple to EU: Set FRAND Licensing Standards
- 8:45 AM
- TMO Quick Tip - iCal: Moving Events Between Calendars
The Mac Observer Reader Specials
TypeStyler 11 is now in the Mac App Store!! -- Special Introductory Price of $59.95!! -- To Buy From The Mac App Store Click Here Now!! Or buy direct
from Strider Software.
Mac RAM Upgrades: MacBook Pro 16GB kits $475, 8GB Kits for $119.99! iMac 16GB RAM Kits (4x 4GB) for $229.99! Mac Pro Memory 32GB Kit for $399.99, 64GB Kit for $889.99! Mac Hard Drives 2TB Seagate SATA II for $249.99! Click Here!
If you're using a Mac, then you've gotta check out Online Poker Mac.
This mac poker and online casino mac site
actually does the unthinkable, it actually rewards!
