- August 5, 2004
John C. Dvorak for CBS MarketWatch explains that RealNetwork’s recent iPod song compatibility hack for its Harmony jukebox software is screwing up Apple’s plan to put iPod technology into Motorola cell phones.
“This grand scheme only works if the platform is secure. You can’t sell an iPod phone and lock in all this easy money if people can buy from just anyone or just use bootleg music, can you? So along comes the RealNetworks hack, which screws up this scheme. Suddenly the iPod looks a lot like any other MP3 player except for its good looks, and those go away when it’s in the phone.
This explains why Steve Jobs and Apple wouldn’t let RealNetworks license any of its technology when asked last April. You can be certain that the Apple-Motorola scheme hatched before that and probably right after Ed Zander, Jobs’ friend, took over Motorola in January. With this scheme they had to keep the iPod locked down and that meant no licenses for interlopers and potential competitors.”
- August 1, 2004
MacMinute is reporting that Apple Chief Executive Officer Steve Jobs is hospitalized and recovering from successful surgery for pancreatic cancer. Using a PowerBook to e-mail from his hospital bed, Jobs wrote to tell Apple employees that, “I had a very rare form of pancreatic cancer called an islet cell neuroendocrine tumor, which represents about 1 percent of the total cases of pancreatic cancer diagnosed each year, and can be cured by surgical removal if diagnosed in time (mine was). I will not require any chemotherapy or radiation treatments.” Jobs will return to his Cupertino office in September, presumably after the Apple Expo in Paris.
iLounge wishes Steve the speediest and fullest of recoveries, and invites our readers to leave a “get well” message for Steve in this comments thread, which we will forward to Apple. (Negative messages will be deleted and their posters banned; please use good judgment in leaving messages for a man recovering from cancer.)
- July 23, 2004
“Apple Computer is outraged over new advertisements by upstart music channel Fuse that resemble ads for the iPod, Apple’s popular digital music player, The Post has learned.
Apple lawyers have been calling Fuse and threatening to sue unless the ads — which went up in outdoor locations in New York City on Monday — are taken down.
Not only do the ads resemble Apple’s iPod ads, but they also are quite risque: one depicts a man masturbating, while another shows a woman pole dancing.”
- July 14, 2004
Apple today announced financial results and sales statistics for its fiscal 2004 third quarter ended June 26, 2004. Of interest to iPod lovers: 860,000 iPods were shipped during the quarter, representing a 183 percent increase in iPods over the same quarter last year. By comparison, Apple shipped 876,000 Macintosh units, representing a 14 percent increase in CPU units.
For the quarter, the Company posted a net profit of $61 million, or $.16 per diluted share. These results compare to a net profit of $19 million, or $.05 per diluted share, in the year-ago quarter. Revenue for the quarter was $2.014 billion, up 30 percent from the year-ago quarter. Gross margin was 27.8 percent, up from 27.7 percent in the year-ago quarter. International sales accounted for 39 percent of the quarter’s revenue.
On possible future iPods: A tantalizing first possible bit of information on new iPods was dropped casually during Apple’s financial results conference call with analysts. Eleven minutes into the conference call, Apple CFO Peter Oppenheimer mentioned that a “higher mix of iPods” is planned for the September quarter, with a commensurate decrease anticipated in Apple’s gross profit margins. Apple was not asked and did not clarify whether its lower margins would be attributable to lower iPod prices, more expensive components, or greater shipments of iPod minis relative to third-generation iPods.
On current models: “the [iPod] mini demand far exceeds the supply,” in the United States is “staggering,” with overseas ordering “unprecedented.” On possible partnering with another company to secure additional iPod mini Microdrives: “We will do what is necessary to increase the supply to try to get closer to demand.” Supply of iPods this quarter is expected to be “significantly higher” than previous quarter, but demand is expected to visibly outstrip supply through the end of the year. Based on surveys and anectodal evidence, Apple currently believes that users having great experiences with iPods are coming to Apple to buy computers, as well.
On iTunes generally: “We couldn’t be happier with all the success we’re having…” The iTunes Music Store generated a “small profit” overall, and is the market leader in the United States. iTMS Europe is “by far the leading music store in U.K., France and Germany,” and European customers were attracted by Apple’s “total solution” (hardware and software) to their music needs. “As the Music Store launched, iPod sales began to move with it. There’s a definite correlation there[.]”
- July 1, 2004
During Apple’s World Wide Developers Conference Keynote on Monday, Steve Jobs introduced a new promotional video touting the success of iTunes and iPod. The iPod, iPod mini, musicians, music video snippets, Airport Express, Airtunes and the recent BMW iPod integration are featured.
- June 14, 2004
The Wall Street Journal’s Walter Mossberg interviewed Steve Jobs at the D: All Things Digital conference in Carlsbad, California. Mossberg talked with Jobs about the success of iTunes, Mac’s future, and movie piracy, during which Jobs casually mentioned he would like to the lower the price on iPods. “I mean, we’re not happy with iPods costing $300 and $400 and we want to keep driving the prices down on them so we’re working very hard on that.”
“Walt Mossberg: You’ve been the leader in legal music downloading. Where does it stand today?
Steve Jobs: We have about 70% market share of the legal downloads, which is great. But if you look at everybody together—100% of the legal download market—we’ve gone from pretty much zero a year ago to about 2% of the legally sold music in the U.S. That’s not a giant number, but if you look at it and say it’s been accomplished in a year and you look at the trajectory, it’s not inconceivable to see it breaking through 5% in the next 24 months as an example, maybe sooner.”
- May 27, 2004
MacMinute reports Apple’s iPod is a hit, but analysts’ belief that it commands 25 percent of the global market may be overblown, Alex Salkever writes in his latest “Byte of the Apple” column for Business Week Online. He says this is because “very little good data exists on international sales of consumer electronics.” “According to one of those chipmakers and to industry analysts, worldwide shipments of digital-music-player chips hit about 15 million last year,” Salkever writes. “An April, 2004, report from investment bank CIBC on this market estimated global sales of flash and hard-drive music players at 17 million. If that’s true, then the 1.5 million iPods sold in 2003 gives Apple 8 percent to 10 percent of the global market.”
- May 26, 2004
Apple today released Mac OS X 10.3.4. We don’t normally announce operating system software updates, but this particular update makes mention of USB 2.0 support for iPods. iPods connected via USB 2.0 are now recognized by iTunes and iSync. The update is available via the Software Update preference pane.
- May 21, 2004
In his latest column for PBS, Robert Cringely has written an editorial on why Apple recently created a separate division for the iPod. “Apple is essentially getting out of the business of making its own products… Why would they take someone used to producing products like the G5 workstation and turn his attention to little music players? It’s hardly a comparable challenge… I think it comes down to a combination of structural changes in the industry and Apple trying harder to cut costs, which really means raising profit margins.”
- May 19, 2004
Apple has created a new division within the company to sell and promote the iPod. Jon Rubinstein, who has led Apple’s hardware engineering efforts, will run the new division. Timothy Cook, head of the company’s worldwide sales and operations, will now lead a newly organized Macintosh division. The moves were announced today in a company-wide internal email sent by Apple CEO Steve Jobs. “This organizational refinement will focus our talent and resources even more precisely on our industry-leading Macintosh computers and the wildly successful iPod,” an Apple spokesman told Reuters.
- May 18, 2004
“A federal judge says rapper Eminem’s copyright infringement claims over use of his song “Lose Yourself” in a commercial for Apple Computer can go forward.
Apple featured a 10-year-old boy singing the Oscar-winning theme song to the rapper’s movie “8 Mile” in an ad on MTV for the computer company’s iPod music player and iTunes music service.
On Monday, US District Judge Anna Diggs Taylor ruled that the suit brought by Eminem’s publishing company can proceed against several companies, including MTV parent company Viacom and advertising agency TBWA/Chiat/Day.”
- May 14, 2004
The Mac Observer is reporting that This Week in Consumer Electronics (TWICE) magazine has ranked Apple 23rd out of a list of top 100 electronic retail chains - moving up from 34th.
“‘For the editors of TWICE, there is little doubt that the iPod was, and still is, a big factor in the sales growth of Apple’s retail stores.
“That’s quite a leap for Apple to 23rd spot,” Alan Wolf, a senior editor at TWICE, told The Mac Observer. ‘The iPod is a driving force behind this jump we believe, as well as the popularity of the iTunes Music Store. They have such a unique niche, sort of like Sony, where you find the brand everywhere and it transcends everything. Apple is in that same category.’(http://www.macobserver.com/article/2004/05/14.7.shtml’”
- April 15, 2004
“Jaffe has been wearing the same bright yellow shirt since April 5, hoping to win Apple’s promotional competition.
Jaffe is one of 30 members of the Kappa Sigma fraternity who are participating in Apple’s new promotional campaign that requires participants to wear a bright yellow shirt from April 5 to April 29 in order to win free iPods.
‘It’s a crazy stunt that 30 crazy frat guys are pulling off,” said Matt Van Horn, a student representative for Apple.’
- April 14, 2004
For the first time, the iPod has outsold Macintosh computers. “We feel great,” Steven P. Jobs, Apple’s chief executive, said in an interview. “We sold a lot of Macs, but we’ve sold more iPods in the quarter than all the Macs put together.”
- April 14, 2004
MacMinute reports that Apple on Wednesday posted a net profit of US$46 million, or 12 cents a share, for its fiscal 2004 second quarter ended March 27, 2003. These results compare to a net profit of $14 million, or 4 cents per share, in the year-ago quarter. Revenue for the quarter was $1.909 billion, up 29 percent from last year. Apple said it shipped 749,000 Macs and 807,000 iPods during the quarter, representing a 5 percent increase in CPU units and a 909 percent increase in iPods over the year-ago quarter. “Apple had a great quarter with 29 percent revenue growth and 200 percent earnings per share growth year-over-year,” said Apple CEO Steve Jobs. “We experienced growth in most areas of our business-most dramatically in selling a record 807,000 iPods, up more than 900 percent over the prior year.”
- March 31, 2004
MacMinute is reporting that Apple has extened its iPod personalization promotion, which allows customers to get free custom laser engraving on any new iPod purchased between March 28 through June 26, 2004. The engraving normally costs US$19 extra.
- March 16, 2004
- March 12, 2004
The iPod mini has “fueled a 22 percent increase in the company’s [Apple] stock in the past two weeks.” “Shares of Cupertino-based Apple have risen to their highest since September 2000 as investors bet the business card-sized iPod mini, released last month, will boost profit.”
- March 10, 2004
StarBrite, developers of the pPod PocketPC iPod emulator software has been asked by Apple legal to change the name and to revise the interface so it does not resemble an iPod. StarBrite has complied with Apple’s requests and has changed the name to pBop and changed the layout so the touch wheel is now located between the menu and row of buttons. “Apple felt pPod was being ‘passed off’ as an Apple iPod,” says Ryan Kelly, a Starbrite spokesperson. “We were surprised to hear this as we have heard of no one buying a Windows-powered Pocket PC application being confused they are buying a hardware device.”
- March 2, 2004
“In a research report Monday, he said the success of the iPod demonstrates Apple’s “tech know-how and strong brand” and could make the company “relevant again.”
And the iPod isn’t expected to be small business for Apple. Milunovich estimates iPod’s revenue to come in around $1 billion this year, contributing 15 cents to per-share earnings. By fiscal year 2006, the analyst said revenue for the iPod could double to $2 billion, adding 25 cents to the EPS.”