Apple will soon be testing advertisements within iTunes, according to a report by Ad Age. The move is “sure to entice advertisers interested in reaching millions of devotees of the service. But it could be worrisome to the service’s users, who unplug from ad-supported media when they plug their earphones in,” says Ad Age. “That may be why Apple’s current plans call for the ads to appear only in the lower-left corner of the iTunes library while users listen to podcasts… But it’s a big step for the service, which has so far limited ad intrusions to audio spots embedded in some of the podcasts offered via iTunes. ESPN Radio, which supplies some of iTunes’ most popular ad-supported sports podcasts, is working with the service on the new advertising offering.”
Apple retail stores in the U.S., Canada and U.K. will be hosting pre-release listening parties on May 2nd for the new Red Hot Chili Peppers’ album, “Stadium Arcadium.” Apple said the stores will play each of the album’s 28 songs in their entirety, and will be giving away complimentary iTunes music cards (while supplies last) to download the album’s first single, “Dani California.” The events kick off at 6:30 p.m. local time. Chili Peppers fans can pre-order the album from iTunes for $19.90 to be downloaded on May 9th when it is released. In addition, those who pre-order the album will be entered to win a limited-edition Chili Peppers iPod and get the first shot at concert tickets for the band’s North American tour.
Gift cards for digital music downloads are helping to boost online music sales. “In the U.S. there’s been fantastic gift card download sales,” said Larry Kenswil, President of Universal Music Group’s eLabs unit. “Towards the middle of last year we were wondering if the digital revolution was over. But after the holiday season sales really picked up as a result of gift cards.”
Spun.com has launched a new service that allows customers to trade in their CDs, DVDs and video games for iPods or iTunes Music Store gift cards. “The transaction is fast and easy,” says Spun. “Simply log on to Spun.com, enter the ‘old media’ titles you want to exchange, and get instant credit toward digital gift cards and players. In a few days, you’ll receive your new digital entertainment gear, and a postage-paid box to ship your old CDs, DVDs and games back to Spun.”
Griffin Technology today announced a new version of its PowerJolt iPod auto charger. The redesigned model, which sells for $20, features a new black exterior with matching cables, plugs into any 12V accessory port or cigarette lighter socket, and charges your iPod while playing music or in standby mode. It comes with a detachable 48” USB to Dock Connector cable and, for use with the new iTrip and iTrip nano, a 48” USB to mini-USB cable. The PowerJolt also comes with a free LE version of Griffin’s iFill software, which
automatically loads Internet radio content to your iPod.
Jon Rubinstein, the former senior vice president of Apple’s iPod division, has signed on with the company as a consultant for one year. In a filing with the Securities and Exchange Commission, Apple said Rubinstein agreed to make himself available to the company for about one business day a week until April 16, 2007, for which he will be paid a non-material flat fee for his services. Apple announced last year that Rubinstein would resign at the end of March and be replaced by Tony Fadell, Apple’s vice president of iPod engineering. The company said Rubinstein’s official last day as an Apple executive was April 14, 2006.
Apple recently spotlighted two features of the iTunes Music Store that make it easier for users to find songs heard on television. The newest edition of “Commercial Success” offers a collection of songs featured in popular TV commercials from companies such as Budweiser, Jaguar, Cingular and Coke. The new “As Heard On” feature is being used to let iTunes customers easily find and purchase songs performed on Fox’s American Idol. Interestingly, the As Heard On section is the first to feature episode tabs for quick access to related music—in this case, the current week’s songs, music from previous weeks and the complete collection.
Along with an expansion of its computer recycling program, Apple announced today that the fifth-generation iPod, iPod nano and iPod shuffle are 100% compliant with the upcoming restrictions of hazardous substances (RoHS) in California and Europe. “iPod’s RoHS compliance comes months ahead of the July 1 deadline set by the European Union, and most of the materials covered by the RoHS directive, including mercury, cadmium, chromium VI and brominated flame retardants, were voluntarily eliminated from all Apple products years ago,” the company said. “In addition, iPod power adapters now exceed Energy Star efficiency requirements and already meet California’s stricter appliance efficiency regulations, which are scheduled to take effect July 1, 2008.”
Apple is likely to introduce new higher-capacity iPod nanos this Summer, but could delay the release of a video iPod with a larger screen until early next year, according to one analyst. Citing yesterday’s warning from PortalPlayer, Piper Jaffray’s Gene Munster said he expects 8GB and 10GB iPod nanos to be released in late Summer or early Fall. “Releasing new nanos during the back-to-school timeframe would allow Apple to capitalize on this seasonally stronger buying period, but, more importantly, we need to see the products in the market by October-November to take full advantage of holiday buying,” he said.
The New York Post claims that the record industry “may be abandoning its demand for iTunes to charge different prices for different songs.” The Post reports that “negotiations between Apple and the four major music companies… have reached a crucial point as several record executives now say they are unlikely to convince Jobs to allow variable pricing.”
British inventor Kane Kramer says he created the world’s first digital music player in 1979, but lost his patents in the late 1980’s. Kramer is now consulting lawyers to see whether he has any claim to the design and technology behind current MP3 players.
Apple said yesterday that the average selling price of iPods will likely decline in the current quarter. “We expect them to be down a little bit in the June quarter,” Apple chief financial officer Peter Oppenheimer said during the company’s second quarter earnings conference call. This suggests that Apple expects to sell more lower-priced iPods, such as the 1GB iPod nano and iPod shuffle, and that a new high-end video iPod will either not be introduced during the quarter, or not significantly offset sales of lower-end models.
Marware has announced the availability of its Sidewinder and Trail Vue cases for the fifth-generation iPod. The Sidewinder ($30) is a hard case featuring a retractable kickstand, headphone cord wrap, and flip–open dock connector cover. The Trail Vue ($35; shown right) features a front cover with Velcro closure strap, removable belt clip, and interchangeable bungee cords in five colors that provide headphone storage.
iPod chip maker PortalPlayer informed investors late Thursday that it has not been selected by Apple to power certain future flash memory-based iPods. In a statement, PortalPlayer said that “the follow-on to its PP5021 System-on-Chip, which is expected to be available in the second half of 2006, has not been selected by Apple for use in their mid-range and high-end flash based iPods.” (Emphasis ours.) The company said it believes the PP5021 will continue to be used “in other members of the iPod family.” While PortalPlayer’s non-selection announcement may seem out of the ordinary, publicly-traded companies are legally obligated to make certain positive and negative disclosures to investors. As Apple is believed to account for 90% of PortalPlayer’s revenue, such a loss could greatly impact the company’s performance.
During Apple’s second quarter conference call with analysts and press Wednesday, company executives said that Apple is actively going after the international digital music market, revealing that the iPod could be selling better in several European and Asian countries. Apple chief operating officer Tim Cook said that while the iPod is the top portable audio player in the U.S. with a staggering 78% share—and also leads in the U.K. (40%), Japan (54%), Canada (45%) and Australia (58%)—countries such as Italy, China, Korea, and those in Eastern Europe are seen as market opportunities for increasing iPod sales.
Reporting its second quarter financial results today, Apple said it shipped just over 8.5 million iPods during the quarter—slightly below analyst predictions, but a 61 percent increase compared to the same quarter last year. Apple’s net profit for the quarter was $410 million, or 47 cents per share, on $4.36 billion in revenue. These results compare to revenue of $3.24 billion and a net profit of $290 million, or 34 cents per share, in the year-ago quarter. While Apple has not yet officially announced its total iPod sales numbers, the addition of these 8.5 million additional iPods brings the total to more than 50 million iPods shipped since the device was introduced in 2001.
Apple is planning to build a new 50-acre campus near its current headquarters in Cupertino, California, company chief executive Steve Jobs said yesterday. “What’s happened at Apple is that our business has basically tripled in the last five or six years,” Jobs said at a Cupertino city council meeting. Apple “has gone from $6 billion in sales to $20 billion in sales,” Jobs said. “We’re pretty thrilled. Since we’re your largest taxpayer, I thought you might be happy for us.” Jobs said it could take three to four years to design and build the new Apple headquarters, which could accommodate 3,000 to 3,500 employees. Jobs said that, in addition to its present Cupertino campus, Apple employees are spread among 30 other buildings in the city. “We’ve rented every scrap of building we could find in Cupertino,” Jobs told the council. Updated: A video of the announcement is now available online.
Market research firm Visiongain believes Apple will launch an “iPhone” and become a mobile virtual network operator (MVNO) by the end of 2007. “Apple acknowledges the threat mobile handsets pose to portable MP3 players in the long term,” says Visiongain. “Apple will embrace mobile more fully and pose a greater threat to the mobile phone industry itself—as an MVNO challenging carriers and a cellphone brand challenging handset makers. Upcoming US MVNO Helio presents a good entry strategy for Apple’s iPhone, an own-brand Apple mobile phone that is likely to be launched by the company. Indeed, the release of which is both logical and inevitable.”
Apple has reportedly begun notifying its service partners of illegally manufactured digital audio players designed to closely resemble iPods. The counterfeit devices, usually imitations of the iPod nano and iPod shuffle, have strikingly similar designs but lack features such as a dock connector, functioning click wheel, and Apple operating system. Apple said the counterfeit iPods can be sold in very Apple-like product packaging and sometimes even come stamped with Apple logos and valid Apple serial numbers.
General Mills is now giving away free iTunes song downloads inside cereal boxes as part of its Big Groove promotion. For a limited time, specially marked boxes of General Mills cereals—including Lucky Charms, Cheerios, Cookie Crisp and Cinnamon Toast Crunch—have a 12-digit code that can be redeemed for one free song from the iTunes Music Store. The company says that 1 in 10 boxes wins 5 bonus songs.
AVA Showcase has announced its Element case for the iPod nano. The hard-shell case is made from lightweight ABS plastic with a chrome-plated exterior. Available in either silver or gold, the Element case features a screen protector, integrated hold slider switch, click wheel film, detachable lanyard, carrying pouch, and earbud cable grip. The Element case is priced at $25.
Members of the Screen Actors Guild and the American Federation of Television and Radio Artists are likely to receive a residual payment of 2 cents every time their work is downloaded for a portable device such as a cell phone or iPod.