No problem: the licence fee is a $10M payment upfront, a payment of $19 per copy of application distributed, and then 97 cents per song it is used on.

If you don't like the terms...um, sorry


-hh

Remind me again why Apple, who took the initial risk and funded the development of iTMS and the iPod, is now obligated to let everyone else ride their wave? What stopped Virgin from creating their own online music service and music player? I think this is esepcially amusing given the fact that Virgin already runs both retail and electronic storefronts that sell music, among other things.

More French whining.

Close the iTMS store in France then if they don't like it. This is a matter of CHOICE, nobody is FORCING people to buy iPods. It's not the only one out there. There are lots of choices of players, songs, services. But because they have the popular one, everybody wants on board.

Tuff tooties.

The French aren't the only ones who have an overexaggerated sense of entitlement. Just look at how many people in this county feel that the world should be handed to them.

Cripes! Even the kids who work at McDonalds act lihe the customers owe them GOOD SERVICE and the company owes the MONEY.

No, I am not unAmerican. I am just tossing in a little perspective.

As far as the Apple Licensing thing goes, I truly wonder if we will see a repeat of the early OS Wars days. I have been a super loyal Mac user for a long time but if history shows us again that Apple lost a market share race due to their wanting to have all of the marbles (read, not licensing) then I will give up on this company and switch to something else.

WHY?

There is an expression I am fond on. "Fool me once, shame on you. Fool me twice, shame on me." In my mind I can give Apple the benefit of the doubt. The iPod will tell me (us) for sure if that benefit is still deserved once we see how this whole thing plays out.

Dan

With all this talk of Apple "stifling competition on the iPod," I'd like to point out that Apple has provided a perfectly acceptable method for other retailers to sell digital music for the iPod... It supports industry-standard unemcumbered MP3 and AAC files just fine.

Some record labels and stores don't like that? Too damn bad for them.

There are many record labels which see the wisdom in offering unencumbered files, and several online music stores which bring them to market. Emusic.com for instance, I enjoy their services quite a bit and spend at least $20 a month there.

I'd also like to point out that even after Real found a way to shoehorn their protected files onto the iPod, thus far Apple hasn't taken any action against them (except for calling them hackers and meaning it as a dirty word.)

These are hardly the actions of a monopolist. I'd call them the actions of a company willfully changing the business methods of an ailing & litigious industry.

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Anonymous wrote:
I have been a super loyal Mac user for a long time but if history shows us again that Apple lost a market share race due to their wanting to have all of the marbles (read, not licensing) then I will give up on this company and switch to something else.

So as a super loyal mac fan, you will switch-back due to loss of potential market share? Even if they're just doing what they've always done and hit their targets and made mac customers happy?

Not everything is about growth and being huge. This summer I am working in a regional bank that is at the small end of the "big boys" spectrum (citi, bank of america, chase, etc) but bigger than the other regional banks, and this subject of becoming a trillion dollar bank comes up a lot. Just because we're not BofA doesn't mean we're not an incredible bank meeting our customers needs as well as providing outstanding and forward thinking services and solutions. So basically it's just the frustratingly naive idea that bigger is better that irks so many people here because it's just flat out wrong.

When did refusal to license equate to illegal business practice?

Let's work it out. Apple has sold about 4 million iPods/minis and about 105 million songs. On average, that equates to 26 songs per iPod. (But no one with 26 songs is locked-in, right?) So let's take extremes for the sake of this argument. Let's assume lock-in occurs when you've bought as many songs as the cost of the iPod, which we'll say, on average, is 350 songs (very conservative). Lock-in is the point at which you will no longer be willing to switch to another format because you've invested too much already and if your iPod breaks, you will buy another iPod or curse Apple for making you buy all your songs again in another format.

At the extreme, then, 300000 iPod owners each bought 350 songs (and nobody else bought any) and these 300000 are locked in. Now, how big is this market? Apple is selling about 900,000 iPods (and minis) per quarter. If Virgin Mega or Real/Creative or Napster/Samsung or Sony sold a true "iPod-killer", they could gain more customers in one month than Apple has at most locked in. Is that a monopoly?

Of course, this doesn't even count the fact that there are at least 4 million non-iPod MP3 (likely WMA) players out there already. Nor, does it take into account that you can play unencumbered WMA (by conversion) or AAC, or MP3, or rip CDs on the iPod. (How many millions of CDs were sold last month compared to iTMS?) Is this ridiculous or what?

Apple should not license simply to avoid being perceived as engaging in any illegal business practice. They are not. They are not coercing any store or mfr to do anything. They are not forcing a majority of iPod owners (or the market) not to switch (except those poor, deliriously happy 300,000 iPod owners!)

If you think Apple should license because they will grow more quickly, that is a different argument. In that case, we will first need to agree that growing quickly and big is good; some will say it depends what you trade off (like user experience). For more, see the family store owner vs. Walmart/Home Depot etc on this.

But even if agree big is good (greedy shareholders, we?), we do not know Apple's long-term business plan. Which is the item that will generate the long-lasting profit - songs (content), players (hardware), licenses for software (services), etc? The b-school theoreticians keep thinking this is the same as the Mac/Windows war so Apple must go to licenses. But these theorists can't tell you what they should license (Fairplay DRM or iTunes software/firmware?) or to whom they should license to (other music stores, player mfrs, cell phone mfrs, pda mfrs, car or home stereo mfrs, all or just some of the above?).

There are clear differences from Mac/Windows so I disagree with the b-school argument. Further argument will revolve around your forecast of the future (Apple has one too) - so it is hard to argue conclusively.

In Reply To:
As far as the Apple Licensing thing goes, I truly wonder if we will see a repeat of the early OS Wars days. I have been a super loyal Mac user for a long time but if history shows us again that Apple lost a market share race due to their wanting to have all of the marbles (read, not licensing) then I will give up on this company and switch to something else.
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I for the life of me can't understand why people keep making this argument.
It does not make any sense.
It's simple. iTunes/iPod/Quicktime are cross platform...the Mac OS was not.
Totally different scenario.

One group is saying Apple's current strategy is hurting itself via isolation and is reminencent of Apple's Mac strategy. Another group is saying Apple's current strategy is only helping Apple and is hurting competition.

So which is it?

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Kircle wrote:
One group is saying Apple's current strategy is hurting itself via isolation and is reminencent of Apple's Mac strategy. Another group is saying Apple's current strategy is only helping Apple and is hurting competition.

So which is it?

This is helping apple. In the short term, people may somehow look at apple as being the bad guy to people looking for handouts, but screw that, they're just looking out for themselves and protected what they've made great: iPod+iTunes+iTMS, and just wait till this christmas season, Jobs will be whiping his butt with $100 bills

Guest wrote: I for the life of me can't understand why people keep making this argument. It does not make any sense. It's simple. iTunes/iPod/Quicktime are cross platform...the Mac OS was not. Totally different scenario.

Here here! This is so right!
When Apple had iPod+iTunes only on the Mac everyone said that they were being closed, ala 1985 and the Mac. Then when Apple brought the iPod to the PC and worked with Music Match (crappy software!) everyone begged them to bring iTunes to the PC and be a more 'open' company and not to fall into the traps of old 1985 Mac thinking. Now Apple has the iPod + iTunes + iTunes Music Store supported on the PC and these same self-rightous analysts and press are talking about Apple still being the same old Apple that had locked itself into a niche strategy back in 1985.

What's the moral of the story? It doesn't matter what you do, these no-nothing analysts and press (can you spell Enderle and Kay?) will keep raising the bar higher and ask for more. Enough I say! Apple has a great solution on the Mac and Windows. If someone wants a part of it, sell iPods and support iTunes, if not go do your own thing.

Ya had to make into a nationalist discussion didn't you. Loser.

Say what? Where is there a "nationalist" argument in this thread? I see no mention of any particular nation or country viewpoint. Who's the loser, maybe the one who doesn't know the meaning of the words they post?

To above "Guest,"

There's a pretty clear mention of FRANCE in the headline, you moron. And the "Let them eat bits' is a reference to FRANCE, idiot.

And you're suggesting someone might not know the meaning of words they post?

This board gets dumber and dumber every day.

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Anonymous wrote:
This board gets dumber and dumber every day.

If you don't like it, you're free to leave.

I'd rather stay and enjoy intelligent posts. Why can't we have both?

1. This board would be nicer without personal attacks. The first use of "loser" by Guest was unneccessary (and also vague as he/she didn't say who the loser was).

2. Every story on the Internet about this news item refered to France in the headline and opening paragraph, since that's where the lawsuit is. So nothing special going on there.

3. "Let them eat bits" was a humurous addition to an otherwise very straight forward story. That little bit of humor didn't make anything in the coverage "nationalistic", maybe you didn't think it funny but that's different.

Apple is dominant. We can say it, everybody knows it. but the market is new and things can change and turn. If there is a dominant, it's not because the other competitors are bad, it's because they are newer or they does not invest enough into something revolutionary enough. It's just another way to slowdown the race Apple is going to win.

So what if Apple is dominant. They may be a monopoly in the Digital Music world, but they got that way beacuse they produced a superior product, and the consumer agreed. They have NOT used anti-competion tactics. They have not locked in music labels or bought out competitors. I find it bizzare that that everyone wants Apple to open FairPlay (a rather ironic name, ja?) when it was Apple who made the investement and took the risk. BMW doesn't go to GM and DEMAND that they hand over their four-wheel steering technology. Why? Beacuse GM developed it and put the work into it. I feel Apple is making a big mistake by not attacking these people back. If Real and Virgin are the only ones talking, people will start to listen. In the American President, Michael Douglas Charachter is speaking about the political attacks against him and he says: "Look, if the people want to listen to Rumson, fine", to which his adviser responds "They don't have a choice! Bob Rumson is the only one doing the talking! People want leadership, Mr. President, and in the absence of genuine leadership, they'll listen to anyone who steps up to the microphone" Thoughts?

Quote

AFCdtLoeb wrote:
In the American President, Michael Douglas Charachter is speaking about the political attacks against him and he says: "Look, if the people want to listen to Rumson, fine", to which his adviser responds "They don't have a choice! Bob Rumson is the only one doing the talking! People want leadership, Mr. President, and in the absence of genuine leadership, they'll listen to anyone who steps up to the microphone" Thoughts?

Well, wildly tangential, but someone seems to like quoting The American President.

At the moment Apple holds a dominant position, yes. That does not however make them a monopoly (yet) nor does it obligate them to enter into any sort of licensing deal -- after all, as it stands right now Global Widgets International could produce the Widget 9000, capable of playing every format under the sun, with a drop-dead gorgeous casing, elegant interface, and an associated music store that is everything to everybody, and pull the rug right out from under Apple, and there's not a thing Apple could really do about it. (Dear Lord, is that all one sentence??? I feel like Faulkner. )

Abuse of monopoly power, so far as I know, is using a monopolistic position in one market as a wedge into a related one. I'm not seeing Apple doing that yet. Now, when Apple tells the record labels to enter into an exclusive contract with the iTMS or risk losing the entire online market, and the labels have to do it, then we can talk abuse of monopoly power. Right now, Apple is only a major player in both the MP3 player market and the online music store market.

Jason

Why stop at forcing Apple to license Fairplay?

Why not force M$ to either license or open up the .doc and .xls formats?

By allowing every other company to read and write word document files, it would be better for everyone! That would increase competition. The main limiting factor is that other programs are not 100% compatible with Office. That is stiffling competition too.

Why should Apple be forced to allow other people to read and write files encrypted with Fairplay, but companies like M$ to keep their formats secret?

[quote="Anonymous"]Why stop at forcing Apple to license Fairplay?

Why not force M$ to either license or open up the .doc and .xls formats?

...

Why should Apple be forced to allow other people to read and write files encrypted with Fairplay, but companies like M$ to keep their formats secret?[/quote]

A very, very good point.

"What's good for the Goose..."


-hh

I was going to mention the same thing

Quote

Jeff Kievlan wrote:
With all this talk of Apple "stifling competition on the iPod," I'd like to point out that Apple has provided a perfectly acceptable method for other retailers to sell digital music for the iPod... It supports industry-standard unemcumbered MP3 and AAC files just fine.

Some record labels and stores don't like that? Too damn bad for them.

There are many record labels which see the wisdom in offering unencumbered files, and several online music stores which bring them to market. Emusic.com for instance, I enjoy their services quite a bit and spend at least $20 a month there.

Jason, you are quite correct in your assesment of "abuse" of monopoly power.
Monopolies in an of themselves are not wrong or evil. Often times they are necessary. But when they become evil that is bad... another case would be if they changed the iPod firmware to ONLY play Fair-Play protected AAC files...
As My Econ Professor used to say "Big is not illegal, Bad is not illegal, Big and Bad is VERY illegal"...

Quote

Jason Varner wrote:

Abuse of monopoly power, so far as I know, is using a monopolistic position in one market as a wedge into a related one. I'm not seeing Apple doing that yet. Now, when Apple tells the record labels to enter into an exclusive contract with the iTMS or risk losing the entire online market, and the labels have to do it, then we can talk abuse of monopoly power. Right now, Apple is only a major player in both the MP3 player market and the online music store market.

Jason

Lanthar, that's a great way to put it. Thanks for the capsule explanation of 'abuse of monopoly power'.

Jason

I agreed with the author of the article. Virgin is only whining. Apple did not exhibit any anti-competitive behaviour.