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Apple tops list of world’s most innovative companies

BusinessWeek and the Boston Consulting Group have released the results of their second annual ranking of the 25 most innovative companies. Apple’s iPod and iTunes put the company at the top of the list this year. “To launch the iPod, says innovation consultant Larry Keeley of Doblin Inc., Apple used no fewer than seven types of innovation,” reports BusinessWeek. “They included networking (a novel agreement among music companies to sell their songs online), business model (songs sold for a buck each online), and branding (how cool are those white ear buds and wires?). Consumers love the ease and feel of the iPod, but it is the simplicity of the iTunes software platform that turned a great MP3 player into a revenue-gushing phenomenon.”

Apple trademark ruling unlikely before Easter

A ruling in the Apple vs. Apple trademark case is unlikely before Easter. Following closing arugents yesterday, judge Edward Mann said his judgement in the legal battle between Apple Computer and the Beatles’ Apple Corps over the use of the apple logo was unlikely to be before the Easter break. “In one corner, Apple Corps Ltd.‘s lawyer Geoffrey Vos said Apple Computer is a ‘Johnny-Come-Lately’ that is attempting to steal the British company’s trademark and increasingly encroach on its territory,” reports the AP. “In the other corner, Apple Computer lawyer Anthony Grabiner said the company is doing nothing wrong and music lovers are smart enough to tell the difference between the use of the apple logos.”

Apple lawyer gives closing arguments, defends right to logo

During his closing arguments in the Apple vs. Apple case today, Apple Computer lawyer Anthony Grabiner defended the company’s right to use its logo on the iTunes Music Store and in ads for the service. Grabiner said ads featuring U2, Eminem and Coldplay were entitled to use the Apple logo because they were promoting the iTunes store and not the music itself. “Viewers aren’t ignorant people, but… have significant understanding of what Apple Computer does and the object of the exercise, accepted by people watching, was to get the benefit of the download,” Grabiner said. “Apple Computer has the exclusive right to use the apple mark on such a broadcast, if used to indicate the source or origin of the hardware and downloading services mentioned in the advert.”

Apple vs. Apple: iTunes exec takes witness stand

Eddie Cue, vice president of iTunes at Apple Computer, took the witness stand Monday to defend his company in the trademark lawsuit brought on by The Beatles’ Apple Corps. Cue testified that Apple Computer did not violate a 1991 agreement between the two companies by using the Apple logo on the iTunes Music Store. Apple Corps lawyer Geoffrey Vos asked Cue to confirm that the iTunes Music Store had offered exclusive songs from artists such as U2 and Bob Dylan. “We have tracks that are temporarily exclusive to us in the Music Store, and so do most of the other services,” Cue said in the High Court in London. James Hoffman, CEO of Woodstock Systems, testified earlier on behalf of Apple Corps that Apple Computer converts its music files into a proprietary format to restrict how they are used.

Apple: iTunes doesn’t violate trademark agreement

In the second day of the Apple Corps vs. Apple Computer case, lawyers for Apple Computer said iTunes does not violate a trademark agreement the companies signed in 1991 and that it has rights to distribute digital music. Apple Computer lawyer Anthony Grabiner said the “distribution of digital entertainment content” was allowed under the agreement, adding that “even a ##### in a hurry” could tell the difference between iTunes and a record label like Apple Corps.

Apple vs. Apple trial begins

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The Beatles’ Apple Corps and Apple Computer faced off in court on Wednesday in the first day of their trademark battle over the Apple logo and the iTunes Music Store. “Apple Computer can go into the recorded music business in any way they want. What they cannot do is use Apple (trade)marks to do it,” Apple Corps counsel Geoffrey Vos said in his opening presentation. Vos said the use of the Apple logo on the iTunes Music Store is a violation of a previous agreement.

iPod propels Apple to top of BusinessWeek top 50 list

Apple has taken the top spot on this year’s BusinessWeek 50 list, which ranks the best performing companies of 2006. “All those little white earbuds are a bona fide cultural phenomenon—and serious business for Apple. Booming sales of its iPod music players have propelled the Cupertino (Calif.) icon to the top of our list of the best corporate performers,” says BusinessWeek. “Apple shows few signs of slowing down. Of the 42 million iPods sold since the line was introduced five years ago, 32 million were sold in 2005, including 14 million in a killer Christmas quarter. Apple’s profits leapt 216% in 2005 on a 66% jump in sales. Investors are still bullish, not only for what Steve Jobs has done, but also for what lies ahead.”

Beatles’ Apple Corps, Apple Computer to meet in court this week

The Apple Computer vs. Apple Corps case is scheduled to begin on Wednesday at London’s High Court before iPod-owning Justice Edward Mann. Apple Corps, owned by the Beatles and their families, claims that the iTunes Music Store breaches a 1991 agreement on the companies’ use of the Apple trademark. “Any damages for this latest clash could amount to tens of millions of pounds because it concerns Apple Computer’s hugely successful iTunes Music Store and iPod,” reports the Times UK newspaper. “The court will be treated to a demonstration of an iPod, but it is unlikely to play a Beatles song.”

Report: Apple choosing manufacturers for ‘iPhone’

Apple is working on “an iPod with phone functions” and could use Taiwanese electronics manufacturer Hon Hai Precision to build the device, says Johnny Chan, a J.P. Morgan analyst based in Hong Kong. Barron’s Online reports [paid sub. req.]: “Apple still hasn’t decided whether to give the contract for what’s being referred to as an ‘iPhone’ to Hon Hai or to another manufacturer, says Ellen Tseng, a Morgan Stanley analyst in Taipei. One analyst in Taipei who declined to be identified said Taiwan Green Point Enterprises, which makes plastic cases for the iPod, is in talks with Apple for a role in the phone.”

Analyst: 75% chance of iPhone in next 12 months

Apple’s stock will benefit this year from new iPods, Intel-based Macs and the possibility of an Apple-branded cell phone, investment firm Piper Jaffray told clients this week. “We would be buyers of AAPL on the recent pullback given we believe iPod demand will accelerate in mid-CY06, based on upcoming positive seasonality and new form factor iPod’s,” Piper Jaffray analyst Gene Munster wrote in a research note sent to iLounge. “Additionally, we believe Apple will benefit from the new Intel-based Mac’s, along with what we estimate to be a 75% chance of a iPhone in the next 12 months.”

Apple posts new, non-silhouette iPod + iTunes ad

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Breaking with its well-known series of “silhouette” ads, Apple Computer this evening introduced a new 1,000 Songs television commercial, depicting the piece-by-piece construction of a city from album cover building blocks. The blocks then transform into a tornado that funnels into the top of an iPod nano, followed by the tagline, “1,000 songs in your pocket.” Already spotted by readers on television, Apple’s new ad can be seen online at this link; high-definition (720p/1080p) and iPod versions are also available.

Analysts weigh in on Apple announcements

The consensus among tech analysts is that Apple’s new iPod Hi-Fi and updated Mac minis bring the company closer to the center of the digital living room, but also show that Apple is not afraid of alienating iPod accessory makers.

“Both these products are a way to get more people slowly hooked into the Apple brand in the living room, sort of like what Sony did in its heyday,” said Sam Bhavnani, an analyst at research firm Current Analysis.

Needham & Company analyst Charlie Wolf said he thinks the announcements are “just the start” of Apple’s digital home strategy. “It’s still a little computer, but it’s adding a lot of capabilities that will allow it to morph into an entertainment center in the living room,” said Wolf.

“Apple is taking steps to move their brand to other rooms beyond just the Mac,” said analyst Tim Bajarin of research firm Creative Strategies of the Hi-Fi. “It’s no longer just sitting in the den.”

“I think they are going straight at the ultimate goal of digital convergence,” Lehman Brothers analyst Harry Blount commented. “Apple already has a powerful media portal on the Internet and they need to extent the virtual portal into your living room.” Blount said Apple “stills need to do more work on the boom box,” referring to the iPod Hi-Fi. “That is where I wasn’t blown away.”

Merrill Lynch analyst Richard Farmer wonders if the two products required a special event, and if they’re both too overpriced. In a research note provided to iLounge, he said that Apple “needs to be judicious if it expects to continue to convert journalists into marketing instruments with its aura of secrecy.” Farmer also said that high pricing for the Hi-Fi and new leather iPod cases suggests Apple “believes it can position its accessories at a premium to competing alternatives.”

“The price point and form factor are likely to appeal to people who are younger and have less disposable income, and who are making their first home stereo purchase,” said IDC analyst Susan Kevorkian. “It’s less likely to appeal to people who have a home entertainment system.”

Rob Enderle, principal analyst for the Enderle Group, said that iPod accessory makers should be wary of Apple’s major new entrance into the iPod add-on ecosystem. “If you’re an iPod accessories maker, (Tuesday’s) announcement has to make you nervous,” said Enderle. “The accessories market is clearly very lucrative, and Apple will be getting more aggressive.”

“I was surprised when I saw that Apple was releasing another major iPod accessory,” said Technology Business Research senior analyst Tim Deal, noting the release of the iPod Radio Remote earlier this year. “This sends a clear message to iPod developers and I’m sure it will breed some ill will.”

Apple to benefit from home audio slowdown

The wide-spread shift from CDs to MP3s and iPods has caused a drop in sales of large home audio systems, putting Apple in a prime position to sell its new iPod Hi-Fi to consumers looking for a simple way to enjoy their digital audio at home. While electronics manufacturers race to add iPod connectivity to their equipment, a new report in the Wall Street Journal says it may be too little too late.

“Sales of traditional stereos have taken a hit,” the Journal reports. “Last year, retail sales of home audio equipment, including stereo system components and surround-sound ‘home theater in a box’ rigs, dropped nearly 18%, to 10.2 million units, according to market-research firm NPD Group Inc. In the same period, sales of portable digital players like Apple’s iPod more than tripled, to 22.4 million units in 2005, from 7.1 million in 2004, says the Consumer Electronics Association, a trade group.”

Music fans aren’t just exclusively listening to their downloaded tunes on an iPod either. “Even when consumers aren’t using portable devices, more are shifting their music consumption away from stereos,” the newspaper says. “Among 1,031 adult respondents to a consumer-behavior survey published last year by the CEA, 34% said they listened to music at home primarily on a PC, compared with just 26% who said they used a stereo or surround-sound receiver as their main home listening system.”

Apple media event coverage, with photo gallery

  • February 28, 2006
  • Apple

imageBelow is a roundup of our coverage from Apple’s special media event, which took place earlier today at the company’s headquarters in Cupertino, California. During the presentation, Apple CEO Steve Jobs introduced the iPod Hi-Fi, leather iPod cases, and Intel-based Mac minis.

- Full iLounge Review: Apple iPod Hi-Fi
- Apple event photo gallery (iPod Hi-Fi, Jobs)
- Live coverage of Apple’s media event
- iPod Hi-Fi speaker system unveiled
- Apple intros leather iPod cases

Special Apple event live coverage

  • February 28, 2006
  • Apple

imageThe iLounge team has arrived at Apple headquarters for today’s special event. We will deliver live coverage if at all possible. Closer to the beginning of Steve Jobs’ presentation we will switch the site over to a “lite version” to better handle heavy traffic loads. While many new products have been rumored to be announced, no reliable information has been leaked. The only hint Apple gave was on the invitation to the event, which read: “Come see some fun new products from Apple.? The special event begins at 9:00 a.m. PT.

For live coverage click here

Analysts speculate on Apple event: Movie downloads, iTablet?

  • February 23, 2006
  • Apple

Following Apple’s teaser invitation to a special event next Tuesday, analysts are weighing in on what they think the company will introduce. Speculation ranges from new Intel-based Macs to a movie download service to a tablet-size iPod with HD video.

American Technology Research analyst Shaw Wu expects an entry-level MacBook laptop and an updated Mac mini, but also says Apple could announce the availability of its first full-length movie downloads. “We believe there is a greater than 50 percent chance that Apple will announce its first, full-length feature films available for download on iTunes,” he says. Wu doesn’t believe the company will debut the so-called “true video iPod.”

Piper Jaffray analyst Gene Munster thinks the event will be Intel-focused, but could also bring new iPods. However, he says it is less likely that Apple will release the rumored touch-screen iPod. “While it is difficult to predict exactly what Apple will announce next Tuesday, it is easier to predict what Apple will announce in the next 12 months,” which he says could include new iBooks and Power Macs, a larger-screen iPod, a new iPod shuffle, Airport Express for video, an Apple-branded cell phone.

Bear Stearns analyst Andrew Neff says a new video iPod is likely, though it could turn out to be “tablet-sized or HDTV-based.” “As speculation begins to build around what Apple could announce on February 28, we think—focusing on the adjectives ‘fun’ and ‘new’—the most likely products are either a tablet-size iPod or a larger HDTV-based iPod,” says Neff. “While more Intel-based products (new iBook or iMacs) or a phone are possible, neither strikes us as ‘fun’ or ‘new’.”

Michael Gartenberg, an analyst at the industry research firm Jupiter Research, reminds Apple watchers that no one really knows what to expect. “We’re talking about Apple, so it could be all of those things, none of those things, or something brand new,” says Gartenberg. Ross Rubin, an analyst at the market research firm NPD Group, said trying to speculate on what Apple might roll out at the event is a “fruitless guessing game.”

Apple to hold special event on Feb. 28

  • February 21, 2006
  • Apple

imageApple has sent out an invitation to select media, including iLounge, to a special event that will be held at Apple headquarters in Cupertino, California on February 28th.

The invitation, which only features the iCal-like calendar image shown right, reads: “Come see some fun new products from Apple.” The special event begins at 9:00 a.m. at Apple Town Hall, Building 4.

iLounge has confirmed with Apple that this event will be taking place and is not a hoax like the email sent out last week purporting to be an Apple invitation to a special event on March 1st.

Apple confirms AIDS-related special event invite a fake

  • February 15, 2006
  • Apple

Contrary to an earlier report, Apple will not be holding a special event on March 1. An Apple representative has confirmed to iLounge that an electronic invitation—marked with indicia of a benefit for AIDS—is an elaborate fake. The sender was apparently taking advantage of recent speculation that Apple would introduce a red iPod as part of Bono’s Product RED initiative. iLounge apologizes for any confusion this may have caused.

Companies including American Express, Converse, Gap and Giorgio Armani have all joined the project and plan to release specially-designed red products with a portion of the profits going to the Global Fund to support AIDS programs in Africa. The U2 frontman was reportedly overheard mentioning that Apple would be joining the initiative by introducing a red iPod.

AT&T warns Apple of video patent infringement

  • February 10, 2006
  • Apple

AT&T claims that Apple and others are infringing on its MPEG-4 video compression patents. Looking for global licensing agreements, AT&T has targeted Apple, CyberLink, DivX, InterVideo, and Sonic Solutions as companies whose products use the MPEG-4 technology. AT&T has also reportedly contacted national retailers that sell products from the companies, informing them that they may be held liable for infringement.

“With the recent explosion of products that use the MPEG-4 standard, including Apple’s video iPod and Creative’s Zen Vision:M, AT&T could stand to gather a financial windfall from its patented technology,” reports PC Magazine. “An increasing trend in mobile phone multimedia also signals potential future profits to be made through the global licensing program.”

Analysts see iPod speakers, iPhone in Apple’s future

Following a meeting with Apple executives at company headquarters in Cupertino, California, analysts from UBS Investment Research believe Apple could introduce several new products in the coming year, including iPod speakers and an Apple-branded cell phone.

“We also believe that Apple may choose to enter new consumer markets for iPod speakers and Apple branded cell-phones over the next year where the company would be able to leverage its market leading innovations and creative designs that have made the iPod such a tremendous hit with customers,” the firm said. “In addition, we anticipate that Apple will continue to announce new partnerships with content providers and build on the media it currently has available for download.”

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