Panic "Retires" Audion; Reveals Inside Story

Panic, Inc. has officially ended development of Audion, its MP3 player/encoder, saying slow sales, the cost of improving the product, and competition from Appleis iTunes software were reasons for the decision.

In a letter to users released Thursday, Panic co-founder Cabel Sasser detailed the The True Story of Audion from its original development to the final and tough decision to end future development. In it, Mr. Sasser revealed little known facts behind the life of what was once a popular product in the Mac software community.

Mr. Sasser also gave insight behind Appleis decision to buy software maker Casady & Greeneis Soundjam product and turn it into what is now the iTunes Music Store (iTMS) software, and how Panic almost became a part of America Online. He also reveals the strong and what some would call unprofessional comments of Apple Chief Executive Officer Steve Jobs who after announcing iTunes in January 2001 told Mr. Sasser, "I donit think you guys have a chance" competing with iTunes.

In responding to questions of why Panic decided to abandon future development, Mr. Sasser said it "wasnit an easy decision." all boils down to an inability to compete fairly with iTunes, which is free and, you know, pretty good," he wrote. "

Mr. Sasser said that to compete with iTunes, Panic would have to re-engineer the product support for streaming to the Airport Express. "But streams to the Airport Express are encrypted using a cryptographic key that we donit have access to ? only Apple does," he wrote.

In addition, he said competing against a free product like iTunes is an uphill battle. "When you find yourself competing against something free, and youire unable to make your product free, you face a monumental challenge," he wrote.

Despite harsh words for Apple, Mr. Sasser acknowledged iTunes is good software thatis hard to beat. "Sure, itis inflexible, and it could do more. But Apple has done things with iTunes that we would have never, ever been able to do with Audion ? things we couldnit even have imagined."

Cautioning that Panic isnit "whining or complaining", Mr. Sasser said, "this business is rough, and all about rolling with the punches. If it wasnit Apple who made iTunes, it would have been someone else ? we just needed to adapt, and focus our energy elsewhere. Also, letis be honest: if we could have, we would have done the crushing ourselves!

"No, this isnit a sad story. This is just the completion of one. Audion is a lucky piece of software ? itis been a lot of places, seen a lot of things, and had some great adventures. And although we canit reasonably work on it any more, weire forever thankful for where it has taken us."

Although Audion is no longer being actively developed or supported, Panic has released the software for free. Registered users of Audion have been sent a special coupon code by e-mail off the purchase of other Panic software products.