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| Sunday, December 19, 2004 |
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Could iPod revive Apple?
Popular music player fueling a comeback, but analysts say wait and see
WENDY TANAKA
Knight Ridder Newspapers
With its hip new ads and even hipper marketing deal with rock band U2, the iPod has revived Apple Computer Inc.'s image as a cutting-edge company.
Shares of Apple have nearly tripled this year, and the iPod has captured nearly 90 percent of the market for portable hard-disk music players. The device, introduced three years ago, and its offspring, the iPod mini - the slimmer, lighter player that had its debut this year - are icons.
The word iPod "is a generic noun for a portable music player," said Michael McGuire, research director for media at GartnerG2, a technology research company in Stamford, Conn.
Is Apple's carrot working?
But is Apple playing the same old song, teasing investors yet again with a sizzling product that in the end will provide it with only a temporary boost? Perhaps.
Some analysts suggest that Apple's core products - its desktop and notebook computers - could ride the coattails of the iPod's overwhelming success. More than two million of the players were sold in Apple's fourth quarter, which ended in September, and predictions for the holiday season range as high as four million.
That would be a welcome boost and sweet revenge at a time when old rival International Business Machines Corp. is reported to be selling its PC business.
But some analysts also worry that Apple's stock has shot up too high too quickly.
Likewise, several shoppers at the Apple store at a shopping mall in King of Prussia, Pa., doubted that the iPod's success would translate into broader Apple sales. They were there for the iPod, period, and had no intention of giving up their Microsoft Windows-based computers, which overshadow Apple's iMac and G5 computers in the marketplace.
PCs hard to overcome
Apple's market share in personal computers peaked at 16 percent in 1986 and has hovered in the low single digits since the late 1990s. Even as the iPod was becoming a cultural and business phenomenon, the company ranked just 10th among all PC-makers in the third quarter of this year with 1.9 percent of the market, according to research firm IDC.
"I have a Dell, and I love my Dell," said Ashley Morgan, 19, a student at St. Joseph's University, who is hoping to get a pink iPod mini this Christmas.
Becky Mair, 24, echoed the sentiment.
"We were raised on the PC," said Mair, who uses Macs on the job in a cancer research lab at the University of Pennsylvania. "People aren't as familiar with the Mac."
And Jim Bulizzi, 29, who owns an Apple G3 laptop and was buying a silver iPod mini, said he doubted the device would create converts to Apple computers.
He himself still finds Windows computers easier to navigate than the Mac, a sentiment that would sound heretical to the Apple faithful. "I get frustrated with it sometimes," he said. "It's not always as user-friendly."
Follow-through problems
It's a familiar story for Apple watchers. Creating innovative technologies and high-quality products that lead the industry has been a hallmark of the Silicon Valley company, but it is equally famous for failing to maintain momentum.
Some examples: Apple produced one of the first personal digital assistants, the Newton, which disappeared after the smaller Palm Pilot and Microsoft-based Pocket PC devices appeared. It revived itself with colorful, bubble-shaped iMacs in the late 1990s, but they produced only a small upward blip in market share that has since subsided.
Now, Dell Inc., Rio Audio and others are nipping at Apple's heels with their own digital music players, and analysts do not expect Apple to hang onto its enormous lead in that market forever.
Still, at least some believe that this time may be different - that the iPod frenzy will drive sales of Apple's computers because the device works more seamlessly with Apple's own products.
"We believe that fiscal year 2005 could mark the year when . . . the iPod story 'hands off' to the Mac story," Benjamin Reitzes of UBS Investment Research said in a recent report.
Another difference this time, some note, has been Apple's willingness to make the iPod play well with Windows products. The company released versions of the player and its associated software, iTunes, for Windows computers, and made its online music-downloading store available to all computer users, not just its own customers.
It also forged partnerships with a variety of companies - including Hewlett-Packard Co., BMW Group and Motorola Inc. - to get the iPod into different areas of the marketplace quickly. HP, for instance, is reselling an HP-branded version of the iPod.
Apple "needs to extend its reach as broadly as possible," said Steve Lidberg, an analyst at Pacific Crest Securities in Portland, Ore.
In the past, Apple, which declined to comment for this article, limited its reach by refusing to license its technologies - namely, its operating-system software. In contrast, Microsoft licensed its MS-DOS and Windows systems to everyone, and Dell's cut-rate computers allowed it to dethrone Apple as king in the education market.
Gartner's McGuire said that while Apple was likely to continue focusing on computers as its core business, the iPod could be a sign that it - along with other computer-makers - needs to establish a foothold beyond PCs.
"The PC is important, but no longer the center of the universe," McGuire said. "It's other things that connect to the Internet and can get content . . . Everybody's racing to outfit the digital living room."
If computer-makers indeed continue evolving into broader consumer-electronics companies, Apple would seem to be well positioned to become a leader again. Co-founder and visionary Steve Jobs, who is also chairman and chief executive officer of Pixar Animation Studios, has become a Hollywood power broker with his finger on the pulse of pop culture.
Already, in the company's fourth quarter, 23 percent of its $2.35 billion in revenue came from iPod sales. |
| posted by Perimbean @ 10:00 AM |
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| Saturday, December 18, 2004 |
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Analyst: Apple iPod poised to become platform if Apple realizes and seizes opportunity
The iPod Platform
Last night I chatted with a good reporter buddy who noted that he has seen a whole bunch of stories about iPod wannabes during the last month. He wondered why. I've heard lots of talk, too, from vendors certain that other music players will match iPod during 2005 and lay its lead to waste. After some deep reflection, I don't agree, because I see these other music players as competing in an apples and oranges race (pardon the pun) with iPod. The device is quickly moving beyond the role of just being a music player into that of an emerging platform. How much of a platform depends upon Apple's vision.
By definition, a platform is something someone builds something else onto. The high-tech industry has seen platforms come and go, with whole economies building up from them. Windows is the most obvious example. Microsoft established its operating system as a standard around which other vendors built products or solutions. A massive economy revolves around the Windows operating system running on microprocessors.
Apple's iPod is moving toward its own kind of platform status. Take for example the huge economy of iPod add-on peripherals cropping up (please pardon yet another pun) around Apple's music player. Other examples: Third-party applications; podcasting; heck, even Playboy's iBods that got way too much press yesterday. The soft porn silhouettes are formated for the iPod Photo screen. Playboy could have released something similar for the cell phone, another emerging platform. What other products might other vendors sell for that screen? I can think of plenty.
Every platform needs a killer application. Apple focused on the first category, music, and now is moving to photos. Initially, I skeptically regarded iPod Photo, because I saw the price as too high for what the buyer gets. I still regard iPod Photo as pricey, but see the device's merits from the platform perspective. Apparently, so does Playboy. And there will be other vendors, not just peripheral manufacturers, all looking to make money off iPod.
Circling back to music, Apple has two killer applications: Ubiquitous MP3s ripped from CDs and the iTunes Music Store. I hear lots of FUD--that's fear, uncertainty and doubt--about Apple's unwillingness to license its Fairplay DRM to other companies. And in the past, I suggested that Apple should consider licensing deals. But as iPod emerges as a platform, I see such licensing as making more and less sense. The music player is the platform, not the music store; iTunes is one killer application for the iPod platform. Licensing Fairplay to other music stores could benefit sales of the core potential iPod platform. I do believe Apple should license Fairplay for creating "second session" rights-protected tracks on copy protected CDs. JupiterResearch forecasts have CD sales eclipsing digital downloads or subscriptions for a long, long time.
As for the licensing FUD, I hear vendors talk about how Microsoft's Windows Media Audio is more open and offers consumers more choice. OH PLEASE! Don't make me laugh. The title of last week's report from colleague Michael Gartenberg says it all; "Digital Music: MP3 Remains the File Format of Choice for Consumers." The format consumers care most about is MP3, which Apple fully supports in both iTunes and iPod. By comparison, Microsoft's Windows Media Player 10 will not rip acceptable-quality MP3s without an encoder from another vendor.
Fairplay debates aside, iPod is compatible where it counts: As a platform. And the device works quite well with the dominant Windows platform, too. If Apple's approach were as closed as some of the FUD suggests, iPod would do nothing more than play music and only using Apple software. That's simply not the case. Consumers can use a variety of programs to copy data and other programs to the iPod and get utility out of them. What Apple needs to do, if the folks in Cupertino are really smart, is to extend other capabilities around the iPod interface. Music and photos would be the obvious starting place.
For the record, platforms aren't necessarily open. They may be interoperable with other platforms, but not necessarily open. Microsoft controls Windows, and it is the company's intellectual property. Windows' dominance makes it the standard other vendors must ensure interoperability, but that wasn't always the case. I remember complaints about Microsoft's closed approach back when more operating systems vied for platform dominance. Even today, Windows is not exactly fully interoperable with all other platforms. Remember that interoperability was an issue in government antitrust cases on two continents; cases Microsoft lost, I might add. Fairplay aside, today's Apple sells many products, Mac OS X in particular, with great cross-platform interoperability. The iPod is one of them.
Lots of vendors have attempted to establish platforms and failed, and I'm not 100 percent convinced Apple fully understands the iPod platform potential or how to extend it. The creation of a separate iPod division is a promising sign. Apple Macworld announcements on January 11 could give more indication.
Still, establishing a platform requires many things. One is something people can build onto. Another is a killer application. Typically other companies won't build onto a potential platform until people begin buying it in mass. Apple may have that problem licked. News reports about perceived iPod shortages suggest strong holiday sales. Those would be on top of two million units sold in the last quarter, more than a third of total sales over three years in just three months.
A strong base of iPod users would be great opportunity to make the platform play, and that includes extending to third parties new capabilities through the device's interface. Even if Apple fails to fully exploit the opportunity, I believe that third parties will. Millions of consumers will be carrying huge data stores on their belts or in their backpacks and purses--4GB, 5GB, 10GB, 15GB, 20GB, 40GB and 60GB--more capacity than most people need for music.
My buddy is right that there have been more news stories about other portable music players and their potential to snatch iPod's crown. I would argue that the iPod is posed to become much more than a music player. But, eventual platform success is predicated on many factors, including the will of Apple to seize the opportunity. Will Apple?
Posted by Joe Wilcox at December 18, 2004 08:35 AM |
| posted by Perimbean @ 10:00 PM |
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An new Apple for teacher
By Julie Henry and Emily Mackay
(Filed: 19/12/2004)
Forget an apple for the teacher; these days, only an Apple I-Pod will suffice. Children are now presenting their favourite tutors with expensive Christmas gifts, including vintage Champagne and designer watches.
The festive show of appreciation to school staff has become an expectation in many schools and while a box of Roses was once considered sufficient, in some schools gift-giving has taken on a distinctly consumerist edge.
Parents are now shelling-out for expensive bottles of wine, top-of-the-range toiletries and up-market store vouchers in a trend that has spread from America where generous gifts such as cashmere tops and Gucci cosmetic bags are increasingly common. T
The largesse of pupils and parents at some leading independent schools has staggered staff. Andrew Cunningham, a former house master at the £21,306-a-year Uppingham School, in Rutland, was amazed when a 16-year-old pupil presented him with an Omega watch and a bottle of vintage Dom Perignon.
"I couldn't believe it," he said. "The pupil was the son of a Hong Kong shipping magnate and money was obviously not a problem. He had given me a lot of grief during the year and must have thought the gifts would make up for it all.
"The watch is worth about £1,000. It is still sitting in its box. In fact at one stage I tried to exchange it because it wasn't quite my thing."
Mr Cunningham, who now teaches English at Charterhouse School, in Surrey, said parents with children who board often went the extra mile in the present-giving stakes.
"House masters tend to get the better stuff because they are more directly concerned with a pupil's general well-being,'' he said. ''Cases of claret are not unusual."
Teachers at Annemount School, a prep in Hampstead Garden Suburb, north London, have also received luxurious gifts from parents – from caviar to health spa treatments.
Geraldine Maidment, the head teacher, said: "One gift that has been very much appreciated was a collaborative effort by parents, who put together and bought vouchers for Selfridge's, for quite a wad of money, so that the teachers could buy what they liked.
"Also teachers have had very luxurious beauty products that are focused on relaxation, as if to acknowledge how incredibly hard the teachers work and how stressful their jobs are. Other teachers have received theatre vouchers or beauty days at the Sanctuary in Covent Garden.
"Some parents give very generous gifts. This year staff have received very beautiful, decorated scarves from Pakistan that they would in no way be able to afford themselves. One of my most original gifts came from a Russian girl who gave me caviar and vodka."
Alcohol was a favourite in other schools in the independent sector. A generous parent at The Charterhouse Square School, in the Barbican, central London, presented staff this year with a case of six bottles of wine, with a bottle of champagne for the child's class teacher and the head teacher.
For some state schools, however, gifts of booze are out of bounds. A code of conduct for Leicestershire county council employees, including teachers, tells staff to refuse presents such as wine and spirits because they could encourage bribery. Only gifts of a token value, such as calendars and inexpensive chocolates, can be accepted and have to be recorded.
State school staff generally reported more modest offerings than their independent school counterparts. Teachers at Taylor Road primary, a state school in a deprived area of Leicester, have received an interesting mix of presents from grateful parents and pupils this year. "I've had a dancing Santa, a flying fairy and a set of disco lights," said Chris Hassall, the head teacher.
"More often it's the standard box of Maltesers. We don't tend to get the expensive stuff – the most expensive thing I've had is Thornton's chocolates. It's not about the gift, though, it is about the sentiment. I would rather have a watch from a pound shop than a Gucci watch."
With more than 400,000 teachers in Britain, school gifts represent a substantial market. The tradition is now so firmly established that Marks & Spencer have a range called "Teachers' Treats" for up to £10 an item.
Some staff prefer the personal touch, however. Monica Galt, the head teacher of King's Road primary, in Manchester, was moved to tears last week when a Muslim parent presented her with a home-made Christmas cake. "The parent had been on a cake decorating course and although she didn't celebrate Christmas, she wanted to give us something nice. I was very moved. One of the best gifts I've had was an original painting by a parent who is an artist when her son got into grammar school."
Nick Seaton, the chairman of the Campaign for Real Education, suggested that parents were not always altruistic.
"This trend is an extension of the lengths parents are prepared to go to to ensure their children get the best education they can and are given the maximum benefits of the teacher's attention.
"Once one parent is buying expensive presents for teachers there is an unfortunate pressure on others to do the same, lest their child gets less positive attention." |
| posted by Perimbean @ 10:00 AM |
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iPODS In Short Supply This Holiday Season
Apple's iPod music player is becoming one of the hottest must-have items this holiday season.
The flip side of that, of course, is that for many, the must-have
device has become this year's "can't-find" item.
Shoppers at Amazon and Best Buy's online store are coming up empty and supplies at Circuit City stores are being sold off about as quickly as they can be loaded off trucks.
A spokesman for Best Buy says the company is funneling its supply of iPods from its online store to its brick-and-mortar stores.
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| posted by Perimbean @ 10:00 AM |
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Apple Sues Over Web Leak of Advance Products
By Duncan Martell
SAN FRANCISCO (Reuters) - Apple Computer Inc. (AAPL.O: Quote, Profile, Research) is suing anonymous people who leaked details about new products by posting information on the Internet, court documents showed on Friday.
Apple's complaint, filed with the Santa Clara County California Superior Court, comes only weeks ahead of the Macworld conference in San Francisco, the annual show where CEO Steve Jobs unveils the latest Apple products.
Apple is notoriously secretive about its product plans, while many fan sites routinely discuss what may be in store, including posting pictures of real products and hoaxes.
The complaint alleges that "an unidentified individual, acting alone or in concert with others, has recently misappropriated and disseminated through Web sites confidential information about an unreleased Apple product."
Apple said in the seven-page civil complaint, filed on Dec. 13, that it did not know the "true names or capacities, whether individual, associate, corporate or otherwise," of the defendants. Once they have been discovered, the Cupertino, California-based company said it would amend the complaint.
It was not the first time Apple has gone after fanatics who have posted information about upcoming products on the Internet.
In December 2002, Apple sued a former contractor who allegedly posted drawings, images and engineering details of the company's PowerMac G4 computer in July of that year, several weeks before the product was officially unveiled.
"Apple has filed a civil complaint against unnamed individuals who we believe stole our trade secrets and posted detailed information about an unannounced Apple product on the Internet," the company said in a statement provided to Reuters. "Apple's DNA is innovation and the protection of our trade secrets is crucial to our success."
Mac rumor Web sites are at their busiest ahead of the annual Macworld conventions, which are highly anticipated by the Mac faithful for product introductions and Jobs' keynote.
In recent weeks, the Web sites have been buzzing with speculation that Apple will introduce a smaller, cheaper version of its market-leading iPod digital music player that uses flash memory, rather than the hard disk drives of the standard iPods.
Flash memory chips retain data stored on them even when electrical current is shut off.
Financial analysts Andy Neff of Bear Stearns and Charlie Wolf of Needham & Co. have also published notes in recent weeks mentioning flash iPods.
"To succeed, Apple must develop innovative products and bring those products to market in advance of its competitors," the company said in its complaint. "If Apple competitors were aware of Apple's future production information, those competitors could benefit economically from that knowledge by directing their product development or marketing to frustrate Apple's plans."
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| posted by Perimbean @ 8:00 AM |
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| Friday, December 17, 2004 |
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Motorola/Apple Phone Details
Newsbrief by Michael Oryl (editor) on Friday December 17, 2004.
Forbes.com is reporting details on the rumored Motorola/Apple music phone, as told to them by Apple VP of Applications Eddy Cue. Referring to the new device, Cue was quoted as saying:
"What we've talked about is a something that is valuable for the mass market. It has to be a phone in the middle-tier of the market, not a $500-tier phone. It has to be very seamless to use. And we're very happy with the results."
Apple and Motorola announced their plans to work together back in July of 2004. At a Motorola event later Jobs was quoted as stating that the new phone would not compete directly with Apple's popular iPod series, but that it would act as an accessory. That could mean that the new Motorola/Apple phone is little more than a typical Motorola V series phone with iTunes support. Motorola and Apple have said that the new phone will indeed support Bluetooth and cable connections to both Macs and Windows PCs.
Forbes is speculating that Jobs will introduce the new device at MacWorld Expo in January. [via Engadget] |
| posted by Perimbean @ 8:00 AM |
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