iLounge

After the close of the stock market Friday, Apple CEO Steve Jobs took advantage of his company’s recent good fortunes to have a laugh at the expense of Dell’s boss.

Shortly after Jobs returned to Apple in 1997, Dell’s founder and chairman, Michael Dell, was asked at a technology conference what he might do to fix Apple. “What would I do?” Dell said. “I’d shut it down and give the money back to the shareholders.”

Apple’s stock price saw a 12 percent surge last week, which pushed the company’s market capitalization to $72.13 billion, passing Dell’s value of $71.97 billion.

On Friday, Jobs sent an email to Apple employees, which read: “Team, it turned out that Michael Dell wasn’t perfect at predicting the future. Based on today’s stock market close, Apple is worth more than Dell. Stocks go up and down, and things may be different tomorrow, but I thought it was worth a moment of reflection today. Steve.”

Apple has now posted the QuickTime video stream of Steve Jobs’ Macworld Expo keynote address. During the speech, Jobs introduced the new iPod Radio Remote and other iPod accessories, as well as Intel-based Macs and updates to its iLife and iWork suites.

In a rare move ahead of next week’s expected earnings report, Apple CEO Steve Jobs revealed the company’s holiday financial numbers during his speech at Macworld Expo. Jobs reported that Apple had its highest revenues ever—$5.7 billion. “One for the records,” said Jobs. In addition, the Apple boss noted that Apple retail stores had their first $1 billion revenue quarter.

Burst.com, which develops video and audio delivery software, said it was sued by Apple on Wednesday for declaratory relief, alleging patent invalidity or non-infringement. The suit, filed in U.S. District Court in San Francisco, follows “a breakdown in protracted negotiations for issuance of a license of Burst’s patents to cover Apple’s iPod and iTunes products,” according to the company.

“Burst anticipates responding to the complaint and filing a counterclaim for patent infringement shortly,” the company said in a statement late Thursday. “Burst remains committed to the enforcement of its intellectual property and looks forward to successfully resolving this litigation through a license covering Apple’s Quicktime, iPod and iTunes products, including Apple’s iTunes Music Store.”

In March of last year Burst settled a major patent and antitrust suit against Microsoft. The software giant paid Burst $60 million to license its patents. “Since the Microsoft settlement, the company has been in patent licensing discussions with several companies engaged in the distribution of audio and video content on computer networks,” Burst said.

Apple Computer is interested in updating the list of cameras that are compatible with the Apple iPod Camera Connector to reflect as many compatible models as possible. Developers and vendors of cameras can self-certify their cameras by downloading the PDF document iPod Camera Connector Compatibility, and follow the instructions to have products added to Apple’s list of compatible cameras.

In its annual report (SEC form 10-K) filed Thursday with the Securities and Exchange Commission, Apple summarized several iPod and iTunes related details.

Apple said that net sales of iPods rose $3.2 billion, or 248 percent, during 2005 compared to 2004. The company said it sold 22.5 million iPods in fiscal 2005, an increase of 409 percent from the 4.4 million iPod sold in 2004. Apple has now shipped more than 30 million iPods since the device’s introduction four years ago.

“Strong sales of iPods during 2005 continued to be experienced in all of the company’s operating segments and was driven by strong demand for the iPod shuffle introduced in January 2005, the release of an updated version of the iPod mini in February 2005, the release of the iPod nano in September 2005, and expansion of the iPod’s distribution network,” Apple said in the filing.

Apple said that net sales of other music related products and services, which consists of sales associated with the iTunes Music Store and iPod accessories, increased $621 million, or 223 percent, compared to last year.

“The company has experienced strong growth in sales of iPod services and accessories consistent with the increase in overall iPod unit sales for 2005,” Apple said. “The increased sales from the iTunes Music Store is primarily due to substantial growth of net sales in the U.S. and expansion in Europe, Canada, and Japan.”

IDG World Expo today announced that Apple CEO Steve Jobs will once again deliver the opening keynote address at next month’s Macworld Conference & Expo in San Francisco. The event is being held at the Moscone Convention Center January 9-13, 2006. The keynote will begin at 9:00 a.m. PT on Tuesday, January 10, 2006. 

Apple will once again this year host an after-Thanksgiving sale at its online and brick-and-mortar stores. The one-day event, which Apple is calling “The feast after the feast,” will take place on Friday, November 25. “Come back to the Apple Store on the day after Thanksgiving for a special one-day-only holiday shopping event,” reads a note on Apple’s website. “You’ll find dozens of great gift ideas for everyone on your list, and you’ll get free shipping on all items.” Last year’s sale saw $20 price reductions on iPods, as well as discounts on iPod accessories, iMacs, digital cameras and more.

Lugz Footwear said late Friday that it has sent a cease and desist letter to both Apple and its adverstising agency, TBWA/Chiat/Day, over the similarities between a Lugz TV commercial from 2002 and Apple’s new iPod + iTunes spot featuring rapper Eminem.

As previously reported, Apple’s new ad is strikingly similar to the three year old Lugz commercial, with both featuring an urban background in red, orange and yellow hues with a hip-hop soundtrack and black silhouette dancers.

“If you look at these spots, common sense would tell you that there’s a problem here,” Larry Schwartz, executive vice president and a principal of Lugz parent company JSSI, said in a statement. “The Apple commercial uses the most powerful elements of our campaign, making the ads disturbingly similar. We are prepared to vigorously pursue all legal remedies in order to protect our rights.”

Makers of MP3 players are facing a shortage of 1GB flash memory chips, and at least one blames Apple and Samsung for the less than ample supply that the rest of the industry is fighting for.

“One of the key challenges we face in our MP3 business is an industry-wide shortage of 1GB flash memory,” said Creative president Craig McHugh. “Industry demand for high-capacity flash memory currently outstrips supply and this will impact availability of our 1GB flash MP3 players for the holiday quarter. The shortage of flash memory, according to industry analyst speculation, is primarily a result of a special deal that Apple has secured from a key supplier for the holiday season.”

It has been reported that Samsung is selling the majority of its flash memory supply to Apple at below market cost for use in the iPod nano and iPod shuffle.

Creative CEO Sim Wong Hoo said the deal is putting pressure on many smaller companies. “The MP3 market is now consolidating, but there is a shortage [of flash memory] because of the special deal we talked about,” said Sim. “The low-end [manufacturers] went out of business in the last few months because it’s very hard to face this pressure. If Creative is losing money then it’s very difficult for other companies to really fight in this battle.”

Sim said he doesn’t expect the deal to last long. “I don’t think the vendor [Samsung] is benefiting on it, so it’s really a one-sided deal,” he said. “I don’t think anybody else out there can get [similar terms]. That’s not the way the industry practices.”

After briefly appearing online last week following Apple’s special event, the new iPod + iTunes commercial featuring rap music superstar Eminem is now back on the company’s website for viewing. There have also been reader reports that the 30-second spot began airing on TV over the weekend.

The ad, which was first shown by Apple CEO Steve Jobs during the event in San Jose, is a new 3D version of Apple’s well-known silhouette ads featuring the rapper singing his hit single “Lose Yourself” along with dancers and the new fifth-generation iPod.

The commercial came as somewhat of a surprise given the history between Apple and Eminem. The rapper’s music publisher, Eight Mile Style, filed a lawsuit against Apple in early 2004, claiming the iPod maker used “Lose Yourself” in a commercial for the iTunes Music Store without permission. The dispute was settled in May of this year, with Apple agreeing to pay Eminem and Eight Mile Style an undisclosed sum.

The disappearance of the commercial from Apple’s website without explanation sparked a bit of controversy online. Bloggers have speculated that Apple had pulled the ad because of its similarity to a three year old Lugz shoe commercial [video, screenshot comparison]. Others assumed that the ad was pulled because of a last minute demand from Eminem’s camp. Currently, no explanation has been given.

Talks between Samsung and Apple on a possible joint investment to produce NAND flash memory chips have been dropped. “We had had some talks with Apple earlier this year but it did not work out due to differences over terms,” a Samsung spokesman told Reuters on Monday, adding they had dropped the joint investment talks “at a very early stage.” Apple is reportedly in talks currently with another company for joint flash chip output.

The Korea Economic Daily reported over the weekend that Apple had pulled out of the joint $3.8 billion investment plan due to “deepening anti-Samsung sentiment among some South Korean politicians and civic groups.” The Korean Fair Trade Commission Chairman recently stated that Samsung could be investigated for reports of the company selling flash memory to Apple at below-market prices. Last week, Samsung was found guilty in the U.S. of price-fixing.

The October 24th edition of Time magazine features a cover story on Apple and how the company is different from others when it comes to designing new products. While Apple CEO Steve Jobs is featured on the cover holding the new fifth-generation iPod, most of the article is devoted to analyzing the design process at Apple. The cover story contains some choice quotes from a number of Apple executives, including Jobs, Jonathan Ive and Tony Fadell. A paid subscription is required to read the full article.

Time’s Lev Grossman says that there are two things going on inside Apple—collaboration and control. When it comes to a new product, it’s a joint effort—the company does not pass a product down the line, from team to team. “There aren’t discrete, sequential development stages,” explains Grossman. “Instead, it’s simultaneous and organic. Products get worked on in parallel by all departments at once—design, hardware, software—in endless rounds of interdisciplinary design reviews.”

Jobs compares Apple’s design process to other companies. “You know how you see a show car,” Jobs says, “and it’s really cool, and then four years later you see the production car, and it sucks? And you go, What happened? They had it! They had it in the palm of their hands! They grabbed defeat from the jaws of victory! What happened was, the designers came up with this really great idea. Then they take it to the engineers, and the engineers go, ‘Nah, we can’t do that. That’s impossible.’ And so it gets a lot worse. Then they take it to the manufacturing people, and they go, ‘We can’t build that!’ And it gets a lot worse.”

Time’s Grossman describes the “control” of Jobs: “Sure, Jobs is perfectly pleasant to be around. And he pays attention to what you’re saying, but if he disagrees with it… he’ll come storming back and hammer at you until you change your mind or at least shut up… In other words, Jobs is into control. In itself, that is of no real importance, except that in a lot of ways, Apple is an expression of Jobs’ personal ethos.”

Finally, Jobs talks of the new iPod’s potential. “There is no market today for portable video,” he says. “We’re going to sell millions of these to people who want to play their music, and video is going to come along for the ride. Anyone who wants to put out video content will put it out for this. And we’ll find out what happens.”

Reporting record fourth quarter and year-end financial results on Tuesday, Apple announced that it shipped more than 6.4 million iPods during the quarter, the 10th consecutive quarter of record iPod sales.

Apple’s net profit for the quarter was $430 million, or 50 cents per share, on $3.68 billion in revenue—the highest quarterly earnings and revenue in the company’s history. These results compare to a profit of $106 million and revenue of $2.35 billion last year. For fiscal 2005, Apple had a net profit of $1.335 billion on revenue of $13.93 billion, representing the highest annual net profit and revenue in the company’s history.

With today’s report of Apple shipping 6,451,000 iPods during the quarter—about 300,000 more than last quarter and approximately 4.4 million more than a year ago—the total number of iPods sold now stands at over 26 million.

In an SEC filing, Apple said all iPod models accounted for more than $1.212 billion in revenue during the quarter, an increase of 126 percent compared to last year. Apple’s “Other Music Productsâ€? category—which includes the iTunes Music Store, iPod related services and accessories—accounted for $265 million of the quarter’s revenue, a 170 percent increase year-over-year.

Following complaints from Korean digital music player makers, Samsung and Apple could be facing an antitrust probe over NAND flash memory chip pricing. Samsung is said to have sold its flash chips to Apple for the iPod nano at below-market prices, crippling makers of iPod competitors who cannot now build comparable devices at the same price points.

“Speaking at a local radio talk show, FTC Chairman Kang Chul-kyu said questions about Samsung and Apple engaging in unfair trading could be investigated by the antitrust body,” reports Asia’s Yonhap News. “The issue of whether Samsung provided cheap flash memory chips for use in Apple’s latest MP3 music player was raised earlier this week during a parliamentary audit on the FTC. Rep. Kim Hyun-mi claimed that Samsung sold its NAND chips for US$54, or roughly 50 per cent of market prices.”

Motorola CEO Ed Zander added to the ongoing speculation of Apple’s intent to create its own mobile phone with comments today to CNET News.com. “We know that they are going to build a smart phone—it’s only a matter of time,” he said after his presentation today at Technology Review’s Emerging Technologies Conference at the Massachusetts Institute of Technology.

Also, as a Motorola representative did earlier this week, Zander downplayed his comments about the iPod nano, claiming they were “taken completely out of context. We have a great relationship with Apple. I’ve known Steve Jobs for 15 years. Sure, there is some tension there. We have the Rokr, and they have the Nano. They are a competitor as well as a partner.”

Contrary to earlier reports, Apple CEO Steve Jobs will not be delivering a keynote presentation at Apple Expo in Paris this month. The show’s organizers updated the Apple Expo website today with a brief message saying that there would be no keynote at the event. Apple confirmed the news, but said Jobs and other Apple executives would be at the event to host a Q&A session for media.

“While this year’s Apple Expo will not feature a formal keynote presentation, members of Apple’s executive team will be hosting a Q&A session for members of the media on the opening day and will be at Apple Expo throughout the week,” an Apple spokesperson told iLounge.

As previously reported, Apple Expo takes place September 20th through the 24th. There has been much speculation that Apple would unveil new products at the event. With no keynote, it is unlikely that the company will make any introductions at Apple Expo this year, and puts even more significance on Wednesday’s special event in San Francisco.

Target has introduced a new iPod case as part of the branded products in its Red Hot Shop. The Cosmic Flowers iPod case is made from white patent-PVC and features black and white “swirling psychedelic flowers” with a red Target bullseye logo. It fits fourth-generation iPods, and offers a clear screen protector, a red patent-PVC wristlet strap, and a clasp to clip the case onto a belt loop or bag. Target said the new iPod case would ship later this month for $14.

“Play it safe, if you must,” says Target. “Put your iPod in a case that’s the equivalent of slacks. Jingle your change. You’re responsible. You’re established. But your bumpin’ tracks and rebellion bass really deserve more attitude than that. Something unique, expressive. And that’s exactly where this beauty enters into it.”

The Detroit News reports that the record label of Eminem has agreed to an undisclosed financial settlement in its lawsuit over the use of one of the rapper’s songs in an Apple ad that appeared on MTV. “The parties were able to reach an amicable resolution,” said Howard Hertz, lawyer for Eight Mile Style and Eminem.

The commercial for the iTunes Music Store featured a young boy singing Eminem’s “Lose Yourself” and aired on MTV beginning in July 2003. In February 2004, Eight Mile Style filed a copyright infringement lawsuit against Apple, MTV and others claiming that Apple used the hit song without permission. Eminem’s lawyers said at the time that “even if he were interested in endorsing a product, any endorsement deal would require a significant amount of money, possibly in excess of $10 million.”

At Apple’s annual shareholders meeting Thursday, chief executive Steve Jobs defended his company’s environmental efforts after being questioned about recycling policies.

While activists picketed outside Apple headquarters, Jobs said inside that the company takes its environmental responsibilities seriously and noted that the company accepted more than 1,500 tons of old products in 2004 through its recycling program.

The activists — including one who dressed up as an iPod with the words “My trendy toy turned toxic trash today” — focused on the iPod and the device’s hard-to-replace battery. “Most consumers are just going to throw it away and get a new one,” said Sheila Davis, director of the Silicon Valley Toxics Coalition.

Jobs said that consumers often throw old batteries away, and pointed out that tens of thousands of iPod owners have already gotten their batteries replaced through Apple’s $99 program and that the company properly disposes of the old ones.

Jobs also admitted that the iPod contains a small amount of lead, but that much more is found in other computer and conusmer electronics products including cathode-ray tube (CRT) monitors.