Softbank has issued a brief statement [Japanese language] denying claims that it is working with Apple to develop an “iPhone.” The Nihon Keizai Shimbun Japanese newspaper reported on Friday that Apple had partnered with Softbank to create and manufacture a new cell phone with iPod-like music-playing features and the capability to download songs directly from the iTunes Music Store.
Apple has partnered with Softbank to build a new cell phone with iPod-like features and the capability to download songs directly from the iTunes Music Store, according to a report in the Nihon Keizai Shimbun Japanese newspaper. The article claims that Softbank president Masayoshi Son and Apple CEO Steve Jobs met earlier this year and formed the partnership to develop the long-rumored device. The phone will reportedly be a 3G model with music-playing features and high-speed web connectivity. The report says that the phones will be released in Japan “sometime this year at the earliest,” and then later in the U.S.
In an article looking at the different approaches taken by Apple and Microsoft in building products, Walt Mossberg of the Wall Street Journal claims that Apple is working on a cell phone and a home-media hub. “In the post-PC era we’re in today, where the focus is on things like music players, game consoles and cellphones, the end-to-end model is the early winner,” Mossberg says. “Tightly linking hardware, software and Web services propelled Apple to a huge success with its iPod. Microsoft, meanwhile, has struggled to make its component model work on these devices and, in a telling sign, is using the Apple end-to-end model itself in its Xbox game-console business. Now, Apple is working on other projects built on the same end-to-end model as the iPod: a media-playing cellphone and a home-media hub.”
Apple Computer has won the trademark lawsuit brought on by the Beatles’ Apple Corps, and can continue using its logo on the iTunes Music Store, a judge in the U.K. ruled Monday. Apple Corps has long-accused Apple Computer of violating a 1991 agreement by moving into the music business. The iPod maker has contended that iTunes was primarily a data transmission service and permitted by the agreement. Judge Edward Mann of Britain’s High Court ruled that Apple Computer did not breach the agreement because the logo is used for the store itself and not the music. “I think the use of the apple logo is a fair and reasonable use of the mark in connection with the service,” Mann said in his judgment. “I find no breach of the trademark agreement has been demonstrated. The action therefore fails.”
Piper Jaffray senior analyst Gene Munster has released a research report in which he addresses more than 20 unanswered questions on Apple, the majority of which are iPod and iTunes related. In the report, Munster gives his views on several topics, including the possibility of a built-in iPod FM tuner, an Apple iPhone, how the iPod will keep its competitive advantage, and whether or not the iPod shuffle will be cut from the iPod lineup. The analyst also digs into the average number of iPods each iPod owner has, advertisements in iTunes, the downtick in last quarter’s iPod sales, Sony’s hopes of creating an iPod competitor, and when we’ll see full-length movies on the iTunes Music Store. You can read Munster’s answers to the iPod and iTunes questions in their entirety after the jump.
Six lawsuits filed against Apple over iPod nano problems have been consolidated and transferred to the Northern District of California. The case will now be heard by Judge Ronald Whyte in San Jose. “Three lawsuits have been filed in California and one each in New Jersey, New York and Louisiana on behalf of customers who claimed their iPod nanos scratched excessively with normal use,” reports CNET News.com. “The suits also allege that Apple failed to disclose and repair the alleged defect and that Apple failed to abide by the warranty.” Meanwhile, Macworld UK reports that the judgement in the Apple Computer vs. Apple Corps case will take place on Monday, May 8. “Justice Edward Mann has been deliberating on the case since before Easter,” the publication notes. “At the ruling he will reveal if he has decided to grant an injunction barring Apple Computer from using its logo within iTunes.”
During Apple’s annual shareholders meeting yesterday, Apple CEO Steve Jobs described Apple’s upcoming products as “the best I’ve ever seen in my life,” and said that he had no interest in becoming an executive at Disney. While Jobs didn’t go into detail, he hinted at an Apple media center device and mentioned that an “exciting” television ad campaign would launch next week. Jobs said that after Disney completes the acquisition of Pixar, where he is also the CEO, he actually plans to spend more time at Apple. In response to a concerned shareholder question about his role at Disney, Jobs said “it’ll require less of my time than Pixar did.”
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.
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.”
Responding to a preemptive lawsuit filed by Apple earlier this year, Burst.com today announced that it has filed counterclaims officially accusing Apple of patent infringement. Burst alleges that Apple’s iTunes, iTunes Music Store, iPod, and QuickTime application infringe on four of Burst’s U.S. Patents (4,963,995; 5,995,705; 5,057,932 and 5,164,839). Burst’s counterclaims come after a suit that Apple filed against the company in January, seeking a declaration that Burst’s patents are invalid and that Apple does not infringe on them. Burst is seeking “a reasonable royalty for Apple’s infringing products and services, and also seeks an injunction against further infringement.”
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.”
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.”
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.”
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.
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 moron in a hurry” could tell the difference between iTunes and a record label like Apple Corps.
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.
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.”
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.”