Merrill Lynch analyst Steven Milunovich said today that Yahoo’s low-priced subscription music service could cause Apple to offer a similar plan of its own through iTunes. “Apple could flick the switch on a subscription model,” Milunovich said in a research note obtained by iLounge. “Yahoo clearly is a problem for Real Networks and Napster, but will it hurt Apple? We do think Yahoo’s entry could cause Apple to offer iTunes as a subscription model later this year, especially if there is evidence of share loss.” He noted that subscriptions account for about 15% of the legal download market with iTunes holding over 70%.
Milunovich also said Apple is working to protect iPod profits. “Meanwhile, Apple isn’t standing still,” he said. “Industry observer Robert Cringely examined the new Tiger OS and found unused icons and support of the H.264 codec that hint at video capability on the iPod and an iTunes video store. Similarly, we have speculated that an iPod running video clips could be out for Christmas and that H.264 was important to future hi-def plans. Cringely also believes Tiger may have support for competing music formats, indicating that if iPod margins get squeezed Apple might license its software and switch to software-driven profits. That’s more of a stretch though Apple does appear to have learned from past mistakes.”
As widely expected, Apple has launched new versions of the iTunes Music Store for citizens of Denmark, Norway, Sweden and Switzerland. The new stores come hours after Apple quietly released iTunes 4.8, and can be accessed by clicking on the “Choose Store” link in the left navigation column of the iTunes Music Store.
Notably absent is the long-awaited Australian store, which appears to be delayed by a contract dispute with at least one record company.
Update: Apple has now sent out a press release announcing the four new stores. Of note, the company says that more than 400 million songs have now been purchased and downloaded worldwide, and that it will launch a promotion with UBS to give every Swiss citizen a free song as part of the new “UBS Generation” and “UBS Campus” packages. “UBS is offering song cards for music downloads in all of their branches, which can be used instead of a credit card to purchase tracks from the iTunes Music Store,” Apple says.
Apple has quietly released iTunes 4.8 for both Mac OS X and Windows. According to the brief release notes, version 4.8 includes “new Music Store features and support for transferring contacts and calendars from your computer to your iPod (requires Mac OS X version 10.4 on your computer).”
This update will presumably bring support for at least some of the previously mentioned new international iTunes Music Stores, including Australia, Switzerland, Sweden, Norwary, and Denmark. In fact, French iPod enthusiast site iPodGeneration is reporting that Apple will be holding a press conference tomorrow at Zurich to introduce the service in Switzerland.
iTunes 4.8 also adds new video features, including the ability to drag and drop movie clips from your computer into the iTunes Library for easy cataloging and organization. Clips appear with a new movie camera icon in your library; however, categories such as “album” and “composer” continue to be used for these files, and no new “videos” or “movies” genre has been added to accommodate them.
There is also a new “show video full screen” button that lets you easily watch full-screen movies that have been organized in your iTunes Library, as well as options to view movies in a separate smaller window, or within the main iTunes pane. When you “get info” on videos, they appear with a preview picture that can be resized to your liking. The video functionality does not appear to allow users to transfer videos to currently available iPods.
As stated in the release notes, users of Mac OS X v10.4 Tiger can now manage their contacts and calendar information right in iTunes instead of using iSync. Windows users will still need the help of a third-party utility to transfer contacts and calendars to their iPod. (See screenshots of the new video and contact/calendar features by clicking read more.)
Update: iTunes 4.8 also patches a security hole in the software. “The MPEG4 file parsing code in iTunes versions prior to 4.8 contains a buffer overflow vulnerability. Parsing a maliciously-crafted MPEG4 file could cause iTunes to terminate or potentially execute arbitrary code,” Apple says. “iTunes 4.8 addresses this issue by improving the validation checks used when loading MPEG4 files.”
Update #2: Several iLoungers report that Apple has made a select number of music videos available for download as bonuses to single or album purchases at the iTunes Music Store. For instance, those who buy Morcheeba’s The Antidote will get the video for the band’s “Wonders Never Cease” for free with the album. There does not currently appear to be any videos available for individual purchase.
“A source said yesterday Apple had planned to launch an Australian version of its popular online music store last Thursday, as widely touted, but the launch was thwarted by one unnamed major record company that refused to sign an agreement in time,” reports The Courier-Mail.
“The hurdle reportedly forced Apple to cancel radio advertisements ordered for the date, and it is expected to delay iTunes’s launch by days, or possibly weeks, as song and album prices and payments are negotiated with the holdout label,” the paper added.
As reported on Sunday, Apple is expected to launch new stores in these five countries this Thursday — the second anniversary of the iTunes Music Store.
Griffin Technology is now shipping the AirClickUSB Remote for Mac and PC computers. The $39.99 device uses RF technology that allows you to control your computer from up to 60 ft. away from anywhere in your home or office.
The AirClickUSB enables you to wirelessly control several popular applications, including: iTunes, PowerPoint, and QuickTime. Griffin said future software updates will add support for additional applications.
The small remote control — which features play/pause, next track, previous track, volume up and volume down buttons — is identical to the AirClick for iPod remote and can be used to control either your iPod or your PC if you already own the iPod AirClick.
Apple this week may use the second anniversary of the iTunes Music Store to launch new versions in Australia and a handful of European countries.
Actor/musician Russell Crowe told listeners to a radio station that an Australian iTunes Music Store would open on Thursday, April 28. Crowe said that the store would sell his new solo music offerings, and that songs would cost AUD$1.80 a track.
Meanwhile, German site Music.ch reports that Apple will also use Thursday to debut iTunes Music Stores in Switzerland, Sweden, Denmark, and Norway.
Motorola’s iTunes-compatible mobile phone will see the light of day in the next few months, the company’s chief executive, Ed Zander, said Wednesday. During Motorola’s first quarter financial conference call, Zander confirmed that the phone is still coming out despite questions that arose after the company cancelled the introduction of the phone at the CeBIT conference in March.
“There has been some speculation that Motorola might delay the launch of its music-playing mobile phone because of lack of enthusiasm among US network operators,” reports The Financial Times. “Zander sees innovative mobile phones, such as the sleek and successful Razr, as the key to competing with Nokia, the market leader.”
Apple plans to launch a version of its iTunes Music Store in Japan by the end of the year, according to the Mainichi Shimbun newspaper, which cites Apple Japan’s representative director Yoshiaki Sakito.
“Apple previously held back from starting such operations due to problems such as the strict management of copyright ownership by Japanese record companies. But the rapid growth in the digital music market in Japan as well as a more open approach by record companies has made the move toward offering online music services possible.”
During a hearing Wednesday to discuss enforcement of digital music compatibility standards, a House panel said it does not want to force interoperability on the industry, but may have to consider actions in the future.
Lawmakers met in part because of “concerns that had been mounting about Apple’s overwhelming hold on the digital music market after the company altered its iPod and iTunes technology to prevent the playing of files downloaded from competitor RealNetworks’ Harmony system,” according to Elana Schor of the Medill News Service.
“Government intervention can probably prohibit innovation,” said Rep. John Conyers, D-Mich., senior Democrat on the House Judiciary Committee. “Consumers will choose interoperability over closed platforms” like the iPod.
Digital music subcommittee chairman Rep. Lamar Smith, R-Texas, was reportedly vocal in his skepticism of Apple’s closely guarded system, and was not happy that the company turned down an invitation to appear before his panel. “Generally speaking, companies with 75 percent market share of any business… need to step up to the plate when it comes to testifying on policy issues that impact their industry,” he said. “Failure to do so is a mistake.”
Only a day after Apple blocked the original version of PyMusique, Jon Lech Johansen says that he has posted an updated version of his software that allows users to once again tap into the iTunes Music Store and buy songs without digital rights management (DRM) protection.
In a post on his blog entitled “So sue me,” Johansen writes: “The iTunes Music Store recently stopped supporting iTunes versions below 4.7 in an attempt to shut out 3rd party clients. I have reverse engineered the iTMS 4.7 crypto which will once again enable 3rd party clients to communicate with the iTMS.”
Apple today confirmed that it has closed a security hole that allowed users to connect to the iTunes Music Store and purchase songs without digital rights management (DRM) restrictions. The company said that iTunes users will need to upgrade to version 4.7 or higher in order to buy songs. While not specifically stating so, Apple apparently updated the store to block access with PyMusique, recently released software created by three programmers including “DVD Jon” Johansen that enabled users to tap into iTunes to buy DRM-free tracks.
“The security hole in the iTunes Music Store which was recently exploited has been closed, and as a consequence the iTunes Music Store will now sell music only to customers using iTunes version 4.7,” Apple said in a statement provided to iPodounge. The company went on to note that approximately only 15 percent of iTunes users will be affected by this forced upgrade.
At the South by Southwest music festival last week in Austin, Apple debuted a new series of prepaid iTunes cards that feature song download codes specific to more than 200 artists. Unlike Apple’s current prepaid cards, which are available in retail stores such as Target, the custom iTunes cards can only be used to download predetermined songs or albums by a certain artist.
“The cards can be used to obtain a specific single from iTunes and are being distributed at shows, press conferences and other events throughout the festival,” according to The Hollywood Reporter. “As one example of what is possible from the promotional and marketing perspectives, Virgin/EMI recording artist the Gorillaz distributed a limited-edition iTunes card good for the premiere of their unreleased new song, ‘Dirty Harry,’ to everyone who attended its world premiere listening party in Austin.”
Update: More information on iTunes Custom Cards can now be found on Apple’s site.
To coincide with the launch of iPod connectivity in its 2005 model line, Volvo announced today that it will showcase music from Scandinavian artists on the iTunes Music Store. The car company will present a live music event in Times Square to launch “nu: the sounds of new Scandinavia” on March 23, with music available on the iTunes Music Store to help promote developing Scandinavian artists. Volvo’s “nu” will feature a monthly 12-song compilation, and select tracks will be available for free.
The Volvo iPod Adapter will be available for S60, S80 and V70/XC70 models and will connect by plugging an iPod into a cable located in the car’s armrest compartment. The Volvo S40, V50 and XC90 feature a dashboard mounted FM transmitter. The Volvo iPod Adapter allows users to listen and control their music through their Volvo sound system and steering wheel controls.
Motorola did not debut its mobile phone with support for Apple’s iTunes earlier this month because of the companies differing approach to launching new products. Motorola said it tends to show its phones weeks and sometimes months before they’re ready to ship, but Apple CEO Steve Jobs does not.
“The first thing you’re seeing here is a merger of two different industries with different ideas of launching products,” Ron Garriques, president of Motorola’s mobile phone division, said at a news conference at the CTIA wireless show in New Orleans. “Steve’s perspective is that you launch a product on Sunday and sell it on Monday.”
Garriques made it clear that the delay was not due to a disagreement with mobile phone carriers. “I’ve got lots of carriers fighting to be the first one we go with,” Garriques said.
At last month’s Grammy Awards, Melissa Etheridge and Joss Stone performed a medley of Janis Joplin’s “Cry Baby” and “Piece of My Heart.” The live track is now available exclusively on the iTunes Music Store, with all proceeds benefiting two premier cancer research organizations - City of Hope and Dr. Susan Love Research Foundation.
“I’ll never forget those two-and-a-half minutes on stage,” says Etheridge, who recently completed a course of chemotherapy to battle breast cancer. “It was the best get well present a girl could have.” Stone added, “Singing with Melissa was a dream come true. She’s an amazing singer, songwriter and without a doubt an amazing person, definitely a woman to look up to.”
Today at the CeBIT conference in Germany, Motorola said it is working on several iTunes-compatible moble phones and that some will be able to store up to eight hours of music. The Motorola ROKR, which has yet to be shown, will be the flagship phone. The ROKR is expected to be unveiled later this month at the M3 music event in Miami, Florida.
“Over the course of the year, you’ll see more (iTunes) devices,” said Alberto Moriondo, Motorola’s global director of entertainment for mobile devices. “The Walkman for the 21st century is the Apple brand.”
Update: The Chicago Tribune reports that Motorola was set to publicly unveil an iTunes phone today at CeBIT, but that “a last-minute message from a wireless carrier or carriers indefinitely postponed the announcement—a highly unusual occurrence.” The company had previewed the iTunes phone to the media earlier this week. It was said to have “a display screen akin to the iPod” and could hold up to 100 songs.
Apple’s iTunes Music Store is facing its strongest challenger in subscription services from Napster and others. At least one analyst says that subscriptions will outpace downloads within the next five years.
“Subscriptions are a great thing for real fans because you get access to a lot of music. The appeal is it’s on-demand. As long as you keep paying, its all there,” Jupiter Research analyst David Card says.
Many believe Apple CEO Steve Jobs will change his stance on subscriptions (he says they won’t succeed because consumers want to own, not rent) if iTunes and the iPod are challenged.
“The only reason they have iTunes is to sell iPods. If it turns out subscription services are important to sell iPods, they’ll probably get into that business,” Card says.
Update: Today at the iHollywood Forum Digital Living Room conference taking place in San Mateo, California, RealNetworks CEO Rob Glaser said that one day Apple CEO Steve Jobs will have to move iTunes to subscriptions. “The day that they introduce subscriptions is the day that Steve Jobs has the brilliant revelation that subscriptions are a good thing,” Glaser said.
Motorola is expected to announce its first handset with iTunes integration on Thursday, March 10, according to a Newsweek article. While not noted by the publication, CeBIT 2005, an electronics event considered to be the largest in the world, will kick off in Hannover, Germany, on Thursday. Previous reports have said the flagship iTunes phone will be called “ROKR.”
“The music phones to be launched this month will allow customers to play their existing iTunes songs, and presumably buy new ones, on their Motorola phones,” writes Newsweek’s Brad Stone. “The problem for Motorola and Apple is that wireless operators like Sprint are interested in setting up those stores themselves.” Motorola CEO Ed Zander argues that consumers will “demand brands like iTunes but concedes that the carriers will ultimately get the first shot at selling songs on phones.”
Apple today announced that more than 300 million songs have been purchased and downloaded from the iTunes Music Store since it launched. The company also said that the benefit single “Across the Universe,” available exclusively on the iTMS, debuted at No. 22 on the Billboard Hot 100 singles chart, making it the most successful exclusive digital track ever in its first week of release.