Following Apple’s announcement of record earnings and revenue yesterday, the company held its quarterly conference call with press and analysts. Below are the highlights pertaining to Apple’s music business, which accounted for 59% of the quarter’s total revenue.
- The iTunes Music Store had an 83% share of the US market of legally downloaded music during the month of December.
- There are now over 2,000 different iPod accessories.
- Apple said it did “very well” in sales of both Apple-branded and third-party accessories. The company sees the accessories as a “recurring revenue stream.”
- The iPod gross margins in the December quarter were above 20%.
- The iPod is now sold at more than 35,000 outlets, although not every retailer sells all iPod models.
- Stock of the 4GB iPod nano is still “lean” in certain areas, following tremendous holiday demand.
- The iTunes Music Store operated “above break even” during the quarter for a slight profit.
- There is more downloadable content on the way for video iPods.
- iPod Radio Remote sales are doing “well.” Apple said it is “currently not meeting demand” for the device, but it is “working really hard” to try to do so.
RhinoSkin has introduced a new hard case for the fifth-generation iPod and iPod nano. The new case is made of transparent, polycarbonate plastic with an aluminum back. It also comes with a a white stretch lanyard, removable post and belt clip, Stuffbak protection label, and provides access to the click wheel, dock connector and headphone jack. The RhinoSkin Aluminum HardCase for the nano sells for $30, while the 5G iPod cases, available in 30GB and 60GB sizes, are priced at $35.
XtremeMac has announced the availability of new Iconz cases for 5G iPods featuring Major League Baseball teams and pop culture characters. The rubber cases have a play-through design, clear screen protector, and are currently available in 10 designs featuring MLB teams such as the Boston Red Sox, New York Yankees, Chicago White Sox, and Chicago Cubs as well as pop icons such as Superman, Speed Racer, Homer Simpson, Tweety Bird, Darth Vader, and Batman. They sell for $30 each.
The Walt Disney Company said it plans to expand the availability of its TV shows beyond the iTunes Music Store.
Universal Music plans to digitize 100,000 out of print European recordings, beginning with 3,000 British, French and German albums from artists such as Marianne Faithfull, Brian Auger and Brigitte Bardot.
Time magazine has an article on how medical students are using iPods and recorded heart sounds to better identify abnormal heart conditions.
Tivoli has introduced a new black version of its iSongBook portable music system for iPods. The iSongBook (iLounge Rating: B+) features a flip-down dock with Apple’s Universal Docking Station inserts, user-positionable stereo speakers, and remote control. The $330 portable system also has an AM/FM tuner, 5 station presets, blue backlit LCD display, and a digital clock with sleep timer and alarm. The black iSongBook is scheduled to ship on January 23.
As expected, Apple today announced record financial results for its fiscal 2006 first quarter ended December 31, 2005. Apple’s net profit for the holiday quarter was $565 million, or 65 cents per share, on $5.75 billion in revenue—the highest quarterly earnings and revenue in the company’s history. These results compare to revenue of $3.49 billion and a net profit of $295 million, or 35 cents per share, in the year-ago quarter.
During his keynote speech at Macworld Expo last week, Apple CEO Steve Jobs announced that more than 14 million iPods were sold during the quarter, which represents a 207 percent growth in iPods compared to last year. The total number of iPods sold now stands at over 42 million.
“We are thrilled to report the best quarter in Apple’s history,” said Jobs. “Two highlights of an incredible quarter were selling 14 million iPods and getting ready to launch our new Macs with Intel processors five to six months ahead of expectations. We are working on more wonderful products for 2006, and I can’t wait to see what our customers think of them.”
Update: In an SEC filing, Apple said all iPod models accounted for more than $2.9 billion in revenue during the quarter, an increase of 177 percent compared to last year. Apple’s “Other Music Products” category—which includes the iTunes Music Store, iPod related services and accessories—accounted for $491 million of the quarter’s revenue, a 177 percent increase year-over-year.
Fox television said it is being more cautious than rival networks like NBC and ABC in making its popular TV shows available from new distribution outlets like the iTunes Music Store.
“It’s been our strategy not to try to go out first with announcements but to go out with our best strategy. We’re taking a more measured approach to what works and would not work,” Fox Entertainment President Peter Liguori said. “In terms of new technologies, it’s so early and in the nascent stages of what we can do with this. We think of this as a quintessential marathon and not a sprint… There are so many different cable outlets, a really fertile Internet, the ability to get information on wireless,” Liguori said. “‘24’ is a great show for all those various options, but again, my job is to protect ‘24,’ not to worry about what at this point is really a pretty meager audience” for video on demand or video iPods.
Orbino, a company that sells Italian leather accessories, recently launched a new collection of premium leather cases for the 5G iPod, iPod nano and iPod shuffle. The cases are hand-stitched and crafted from a variety of leathers and metals. A summary of the new collection follows.
Cambio Case ($65)
The Cambio leather case for the 5G (video) iPod is available in several different styles, including calfskin, crocodile, nappa and rawhide in black, brown, cognac and natural colors. It features a metal click wheel ring in polished palladium or brass finished in gold. The Cambio also has a metal spring-loaded combination belt clip and desk stand.
Roadster Case & Sportivo Case ($39)
Both of the company’s hand-made cases for the iPod nano feature high quality materials, the built-in combination belt clip and desk stand, and a glazed cotton lariat with polished palladium metal pendant. The Roadster is available in 9 different styles—from red pebbled leather to beige snakeskin—while the Sportivo comes in 11 styles—from chocolate colored nappa leather to tiger print haircalf.
Premium Metal Case ($39-$59)
Orbino’s Premium Metal Case for the iPod shuffle is available in 19 different styles, including several all metal cases and a number of combination metal and leather inlay cases. Like the other cases in the line, it features a combination belt clip and desk stand, and also sports palladium or brass/gold finishes and comes with an Italian waxed cotton lanyard.
The recently released iTunes 6.0.2 update brought a new feature called the iTunes MiniStore, which analyzes the the music in your library and suggests similar offerings for purchase. Following complaints from users and tech writers who said the default feature was akin to spyware, Apple has quickly responded to easily explain the feature to iTunes users and make it more optional.
While the MiniStore was always able to be turned off by selecting Edit > Hide MiniStore, Apple now explains that iTunes users can use a button at the bottom of the iTunes window to quickly turn the feature on or off. Apple has also updated the MiniStore so that iTunes users are now met with the following message explaining the feature:
“The iTunes MiniStore allows you to discover new music and videos right from your iTunes Library. As you select items in your Library, information about that item is sent to Apple and the MiniStore will show you related songs or videos. Apple does not keep any information related to the contents of your music Library. Would you like to turn on the MiniStore now?”
Reuters reports that Fox television is taking a more cautious approach than rival networks in making its shows available for download.
An Arabic version of Apple’s iPod could be launched in the Middle East soon, according to Gulf News.
The Wall Street Journal’s Walt Mossberg has written a syndicated article on “How to work around the iPod’s annoying shortcomings.”
Apple has quietly added a number of artists from Sony BMG to the Australian iTunes Music Store. Songs are priced at the current price of AU$1.69 each. Select artists include Oasis, Franz Ferdinand, Pearl Jam, Kelly Clarkson, Avril Lavigne, and more.
As previously reported, the store launched in October 2005 without music from the record label because of a contract disagreement with Apple. iTunes vice-president Eddy Cue said at the time that Apple was working with Sony BMG to get its artists on the Australian store.
iPods are apparently very popular with the first family. It was revealed last year that U.S. President George W. Bush is an iPod enthusiast, and now first lady Laura Bush also discloses that she’s a member of the iPod nation. Mrs. Bush told the Washington Times that her tastes differ from her husband’s and that she currently has songs by Tina Turner and Dolly Parton on her iPod. “He likes country music a little bit more than I do, although I actually really am very fond of country music, as well,” she said. “One of the songs on my iPod that I love is Dolly Parton singing ‘Stairway to Heaven.’ So that’s sort of a combination, country and pop.”
Sumajin has announced its Loop G5 case for the fifth-generation iPod. The silicone case includes an adjustable lanyard and screen protector, and features specially designed grooves on its back for a better grip. The $19 case comes in 10 colors—clear, white, black, purple, blue, red, pink, orange, yellow, and green. The Loop G5 case is available for the 30GB and 60GB iPod.
ID3 is a new magazine dedicated to podcasting. It will be delivered bimonthly in four formats—online, electronic (PDF), podcast, and/or print.
Apple has denied reports that it plans to set up business in the Channel Islands as a tax haven for the iTunes Music Store.
SKProducts has cut the price of its CarClip rear view mirror holder for the iPod mini and iPod nano to $10.
Hearing-aid suppliers are looking to broaden their appeal with products such as custom-molded earpieces for iPod users and Bluetooth cell-phone headsets.
JanSport has announced a new collection of products with integrated iPod connectivity and controls, including six new backpacks and 10 new jackets for men and women. To handle the new iPod features, the company has launched the proprietary LiveWire system, which comes in three options—LiveWire, LiveWire+, and LiveWireBT.
LiveWire, available in the backpack models, simply connects to an iPod via the headphone jack and offers a pocket for the player, but no control pad. LiveWire+, available in the backpacks and jackets, connects via the dock connector and has a soft-fabric key pad with five-button control of all iPod features. LiveWireBT utilizes Bluetooth technology to link a mobile phone and an iPod for hands-free use when carrying a backpack.
Backpacks include the Alt Pack (shown), Kingpin, Lo-Fi, Trinity, Audio Pack, and Dreamer. LiveWire jackets for women include the Wired Puffer, Wired Shell, Denim Jacket, Power Jacket, and Power Hoodie, while the men’s jackets include the Wired Puffer, Power Jacket (shown), Power Hoodie, Velocity Jacket, and Denim Jacket. Pricing ranges from $125-$300.
UK-based Disruptive Technology Channels today announced that its PodGear brand of iPod accessories has been renamed GEAR4. The company also announced plans to release several new iPod products this month.
“The PodGear brand accessories have become a hit around the world (now being sold in over 20 countries) and works brilliantly as an iPod accessories name, but is limiting in the way that it is so obviously iPod related,” said Tom Dudderidge, managing director, Disruptive Technology Channels. “The move to GEAR4 is intended to enable other digital accessories to be sold along side the massively successful iPod collection, all under the same brand name—GEAR4.
The NHL and NASCAR are close to reaching agreements with Apple to offer video downloads of their sports content on iTunes. The Sports Business Journal reports [paid. sub. req.] that officials at both the NHL and NASCAR said they have similar deals that are within weeks of completion. “It would be fair to say we are close,
Koyono today announced four new outerwear garments that include integrated ElekTex iPod controls. The first design that will be available is BlackCoat Work, a lightweight jacket made from water resistant stretch cotton. It is scheduled to ship in March for $180. The other designs include coats named Sport and Minimal, which will be released before May, and a “surprise garment innovation” for summer. Prices range from $150 to $1,000.
“Like all BlackCoat designs, the Work has a minimal appearance and is made from the latest encapsulated waterproof fabric technology. What makes the Work different is its’ stretch cotton construction for uncompromising comfort. You will have just the right number of pockets to manage your gadgets and other mobile necessities and feel good.”
Both NBC and ABC have seen a rise in viewer ratings since adding select TV shows to the iTunes Music Store. NBC credits the availability of its shows on iTunes for the recent increase in viewers during prime time for one of its popular comedies.
NBC’s “The Office,” the most popular show on iTunes, delivered a 5.1 rating last Thursday—its highest ever—among adults 18 to 49. The series delivered a 4.5 the prior week. An NBC executive said he is confident that the iTunes exposure contributed to the rise. Frederick Huntsberry, president of NBCU Television Distribution, said iTunes is bringing new audiences to the show that would not otherwise have watched.
Meanwhile, ABC has also seen a ratings increase for its two most popular shows available on iTunes. Since they were added to Apple’s store in October, both “Lost” and “Desperate Housewives” are up versus the same period last year. “Lost” has seen its total audience rise 14 percent and ratings for adults 18 to 49 are up 28 percent. The total audience for “Desperate Housewives” is up 7 percent and 18 to 49 ratings are up 3 percent.
Following his keynote speech last week at Macworld Expo, Apple CEO Steve Jobs spoke to Newsweek in an exclusive interview. While the majority of the excerpts pertain to the new Intel-based Macs, Jobs does talk about iPod competition and Apple’s record-breaking 14 million iPod shipment number.
“The problem is, the PC model doesn’t work in the consumer electronics industry, where you’ve got all these companies and some do one thing and another does another thing. It just doesn’t work,” Jobs said. “What’s going to happen is that Microsoft is going to have to get into the hardware business of making MP3 players. This year. X-player, or whatever.”
Jobs also said that Apple could have sold more than 14 million iPods during the holiday quarter if it had received more components.
“We couldn’t get enough flash memory, we couldn’t get enough of everything [to meet all the demand],” Jobs said. “We had to call the numbers six months in advance. So we sat around and had some meaningful discussions about what that number should be, and we ended up picking the highest of the numbers. You’ve got to admit, picking 14 million in the spring of last year, when the most you’ve ever sold was four and half million, was a pretty big bet. But it turned out that that number was too low.”