While advertisers struggle to reach consumers who have abandoned traditional radio in favor of their iPod, Apple says it has no plans to allow commercials on its device or iTunes.
“We have gone out of our way to not take advantage of advertising opportunities,” said Greg Joswiak, vice president of iPod product marketing. “We don’t think it’s part of the experience we want to give.”
Except for a handful of podcasts, industry experts believe there’s little opportunity to place ads on devices such as the iPod.
“People are using an iPod because they want to choose the music they listen to,” said Craig Davis, chief creative officer of WPP ad agency JWT Worldwide. “To interrupt and intrude on that with advertising would be pretty unwelcome.”
Hewlett-Packard has decided to stop reselling Apple’s line of iPods, the Wall Street Journal confirmed Friday [paid sub. req.]. HP spokesman Ross Camp told the paper that “the iPod doesn’t fit in with our digital entertainment strategy,” and said the company will quit selling the iPod at end of September.
“The deal between the two companies, which compete against each other in the PC market, was originally viewed as a major step for both companies, but the breakdown of the partnership isn’t likely to be a big loss for either side,” The Journal reports. “H-P on average accounted for only about 5% of iPod sales, which totaled about 6.2 million of the devices, worth more than $1.1 billion in revenue, for Apple last quarter.”
Camp told CNET News.com that HP’s “current plan” is to continue including Apple’s iTunes on its desktop and notebooks like it has done since 2004. The HP representative also said that under the terms of the partnership with Apple, HP cannot develop or market a rival digital music player until August 2006.
Apple and HP first announced their partnership in January 2004 at the Consumer Electronics Show in Las Vegas. HP started selling iPods in August 2004, then later added the iPod mini and more recently the iPod shuffle to its HP-branded line.
American Technology Research analyst Shaw Wu expects Apple to ship its video iPod in October.
In a research note discussing Portal Player’s second quarter financial results, Wu wrote: “We believe new iPods including color iPod minis, higher capacity flash, and a video-capable iPod will not likely ship until the October timeframe in the December quarter.”
Wu said he expects Apple to ship 7.1 million iPods this quarter, 3.1 million of which will be iPod shuffles. He also believes that Portal Player has “secured the design win in a new 2GB iPod mini using flash” and that Apple will discontinue its 4GB iPod mini.
iPod chip maker PortalPlayer said it expects to see “significant demand” in the second half of the year for “exciting new models” from its partners, hinting that Apple does indeed have at least one new iPod coming this Fall. Analysts believe that since more than 90% of PortalPlayer’s sales come from Apple, the company is forecasting upcoming demand for a new iPod.
“We have completed the design win activity for our customers’ exciting new models intended to ship in the second half of 2005,” PortalPlayer CEO Gary Johnson said. “In addition, we worked with the supply chain to prepare our operations for significant demand in the second half of the year.” Johnson went on to say that his company is “excited about the upcoming back-to-school and holiday season and believe we are very well positioned for significant growth in the second half of the year.”
Johnson also said that PortalPlayer will soon benefit from its flash-based designs and wireless technologies. The company believes that “market demand for high-capacity flash players (1GB or greater) has accelerated.” Johnson also noted that PortaPlayer “accelerated its investment in innovative wireless technologies that we believe will help fuel our growth in 2006 and beyond.”
After being left in the dust by Apple’s iPod and iTunes, Microsoft is working harder than ever to become the “gatekeeper for the home video business of the future,” according to an LA Times article published today.
The software giant has taken rather large steps recently to persuade Hollywood that it is the right company to lead the next wave of digital media. Microsoft has already made pacts with Time Warner, Walt Disney Co. and News Corp., the Times reports.
Microsoft chairman Bill Gates says he vows not to play the victim in “Son of iPod.” After being humbled by Apple’s success with digital music, “we’re really having to work more closely with partners in the hardware industry and content industry, to really think through the whole end-to-end experience and make it better,” Gates said. “That’s where we’ve done our mea culpa. We are fixing that.”
The Times reports, however, that content creators “may stand pat, place their bets with multiple technology partners or choose someone other than Gates.” The paper says that “few in Hollywood would be shocked to see Apple founder Steve Jobs pull another rabbit out of his hat, unveiling a perfectly thought-out system for moving paid video to computers and portable devices.”
Rumors of a video iPod have gained further credence thanks to a report in Monday’s Wall Street Journal [paid sub. req.] that says Apple has recently held discussions with major recording companies about licensing their music videos to sell through the iTunes Music Store.
“The negotiations are a possible prelude to a version of Apple’s hit iPod that would play video, a widely expected gadget that Apple has told some entertainment-industry executives that it could announce by September,” the paper says.
The Journal reports that Apple has approached Warner, EMI, Universal and Sony BMG to license music videos which could go on sale as early as September for $1.99 each. Apple is already bundling music videos with select albums on iTunes.
In addition to the four major music companies, Apple has also had talks with media companies about licensing television shows, “though securing rights to sell television shows over the Internet is highly complex and is likely to take longer than other forms of video,” the paper says.
Reporting its fiscal 2005 third quarter financial results on Wednesday, Apple announced that it shipped more than 6.1 million iPods during the quarter, topping all analyst estimates, which ranged from 4.8 million to 5.55 million.
With today’s report of Apple shipping 6,155,000 iPods during the quarter—about 800,000 more than last quarter and 5.3 million more than a year ago—the total number of iPods sold now stands at over 20 million.
Apple’s net profit for the quarter was $320 million, or 37 cents per share, on $3.52 billion in revenue—the highest earnings and revenue in the company’s history. These results compare to a profit of $61 million, or 8 cents a share, and revenue of $2.01 billion last year.
In an SEC filing, Apple said all iPod models accounted for more than $1.1 billion in revenue during the quarter, an increase of 343 percent compared to last year. Apple’s “Other Music Products
Etchamac has expanded its custom laser etching service to include the iPod and iPod mini. The company uses a CO2 laser to professionally etch the image or text (or both) of your choice directly to the backside of your iPod. Text costs $30 for both iPods and iPod minis, while an image and text costs $50 for full-size iPods and $40 for iPod minis.
“The process is done at low power and can not damage your iPod,” explains Etchamac. “The process is quick, clean, and permanent. From family pictures to corporate logos, line art, or your favorite team. You give us the art and we will etch your iPod or Powerbook.”
ThinkFree has announced ThinkFree Office 3 Show, iPod Edition, new software that allows iPod users to create, edit and transport PowerPoint presentations and use them on any PC or view them on color screen iPods. ThinkFree Office 3 Show, iPod Edition is currently in beta and will be released in August for $39.95.
“Bringing the mobility of professional expression to another level, ThinkFree Office 3 Show, iPod Edition lets anyone create and edit powerful presentation graphics on any PC or Mac, then (with the color iPod or portable multimedia player) display them anywhere, from the campus to the golf course,” says ThinkFree. “This means that sales professionals, executives and students can leave their laptops at home and can literally put sophisticated graphic presentations in the hands of their prospects.”
PumpPod is a new “portable training program” for color screen iPods and other handheld devices.
Each “PumpPod Trainer” is a collection of detailed JPEG images that are synced to your iPod, allowing you to view the exercises, instructions and tips just like you would a normal photo. The workout training is available in several levels—from cardio to abs to weights. The company behind PumpPod said that most PumpPod Trainers, which start at $29, “make up a progressive 4-6 week exercise program.”
“PumpPod is like having an elite personal trainer that fits in your pocket and goes where you go,” the company says. “The bright images and simple instructions demonstrate how to do exercises properly and effectively for better results. Best part? PumpPod is a visual training aid that won’t get in the way of you, your music, or your workout. We wouldn’t have it any other way.”
In a phone call to the father of the 15-year-old boy who was fatally stabbed over his iPod last week in Brooklyn, Apple CEO Steve Jobs conveyed his sympathies and told the man not to hesitate to ask if there was anything Jobs could do for him.
“I didn’t know who he was,” Errol Rose, father of the slain Christopher Rose, told The New York Times. “He called me on my cellphone, at 4 maybe. Or maybe it was 5.”
“He told me that he understood my pain,” Rose said. “He told me if there is anything—anything—he could do, to not be afraid to call him. It really lightened me a bit. Some people talk to you like they’re something remote,” Rose said. “He was so familiar. After every word, he paused, as if each word he said came from his heart.”
“We live in a world which is changing rapidly,” Rose said. “We have the technology that can give us the iPod and everything else, but it’s not all these things. We have to work on the minds and the hearts. We’re failing these kids. We’re not loving them like we’re supposed to.”
Clarifying ambiguities over the actual “generation” or version number of the updated iPods released this Tuesday, a senior executive with Apple Computer confirmed to iLounge this evening that the new color-screened devices are still considered by the company to be “4th generation” (4G) iPods.
While the executive did not provide further naming details, Apple has been calling the new models “iPod with color display” in various support documents and software release notes. The company has publicly referred to the last two major iPod revisions, the iPod With Dock Connector (with a touch wheel and four touch-sensitive buttons) and the Click Wheel iPod, as “third-generation” and “fourth-generation” models, respectively. With Tuesday’s iPods still considered part of the fourth-generation family, one can now safely assume that Apple is saving the “fifth-generation” moniker for an all-new iPod yet to be revealed, perhaps conveniently at the same time as version 5.0 of iTunes.
For only the third time in iLounge’s nearly four-year history, the Editors of iLounge have awarded a flat “A” rating to an iPod—the newly introduced color fourth-generation iPod (20/60GB). Previous iPods to receive this rating were Apple’s breakthrough third-generation iPod, reviewed in May 2003, and the second-generation iPod (Mac version), reviewed in August 2002.
From our reviews of the new iPods, which are now on the site:
“It would have been easy to pass on re-reviewing Apple’s newest 20GB iPods—after all, they’re little more than cheaper, lower-capacity versions of the 30GB iPod photo released only four months ago. That simple fact has elicited groans and tears from the most devoted iLounge readers, particularly those who purchased black-and-white-screened iPods only recently.
But to view the new iPods from the perspective of existing owners would clearly miss the significance of what Apple is now offering to new potential buyers: a color-screened, photo-capable 20GB digital music player with unparalleled ease of use and the best software package on the market, all at a lower suggested retail price than any major competitor. Similarly, its bigger 60GB brother and black-bodied U2 clone are more affordable than ever before, while continuing to possess all of the key features that made them stand out at their October 2004 introductions. Owners of black-and-white-screened iPods may complain, yet there’s little doubt that they’d quickly upgrade if given the right incentive.”
Bricks-and-mortar Apple Stores have started to receive their first shipments of the new 20GB color iPods introduced this morning, including the new standard 20GB iPod ($299) and 20GB U2 iPod ($329), and are selling 1GB iPod shuffles and 60GB iPods at their newly reduced prices ($129 and $399, respectively). Additionally, Apple Store employees are now wearing green promotional T-shirts touting the company’s collegiate free iPod mini (with Mac purchase) program.
Visit our iPod photo gallery for unpacking photos of the new color U2 iPod.
Apple has now released iPod Updater 2005-06-26, which includes iPod Software 1.2 for “iPod with color display,” iPod software 3.1 for iPod with Click Wheel and iPod software 1.4 for iPod mini. The company said the update contains the same software versions as iPod Updater 2005-03-23 for all other iPod models. According to the brief release notes, iPod Updater 2005-06-26 adds integration with iTunes 4.9 for downloading and listening to podcasts.
As anticipated, Apple today announced that it is merging its iPod and iPod photo lines, dropping the “photo” naming and adding color screens to all full-size (white) iPod models.
The simplified lineup features a new 20GB color screen model for $299 (the same price as the older monochrome version), a 60GB model for $399 ($50 cheaper), and an updated iPod U2 Special Edition with a color screen for $329 ($20 cheaper). The company has apparently dropped the 30GB iPod photo model, which sold for $349.
Apple also said that starting today iPods will offer “an easy to use Podcast menu, including bookmarking within a Podcast and the ability to display Podcast artwork in color” to coincide with the release of iTunes 4.9.
Unsurprisingly, all of the new full-size iPod models support the photo and album artwork features of the previous iPod photo models, allowing users to view their photo libraries on the iPod’s screen or on a TV. Apple said the new 20GB iPod holds up to 20,000 photos, compared to the 60GB version which holds up to 25,000. Both can import photos from a digital camera with the optional iPod Camera Connector.
iLounge has noted Apple’s gradual shift away from using the word “photo
Creative Technology’s warning of sagging demand for its devices is no indication that the MP3 player market as a whole is suffering, a Wall Street analyst said Monday. Creative earlier today cut its fourth-quarter sales outlook and said it will have an operating loss, citing weaker-than-expected demand for its products.
“We believe that iPod’s continued dominance of the portable audio market, especially as shuffle gains market share for flash-based players, is likely having an impact on Creative,” Piper Jaffray senior analyst Gene Munster said in a research note obtained by iLounge. “In addition to Apple’s market share gains in the flash segment, we believe the June quarter is a seasonally slow time for this market and we do not expect blow-out iPod numbers from Apple (expect iPod units of 5.5 million for June, up from 5.3 million in March). We do, however, believe that Apple will significantly benefit from back-to-school and holiday buying in the September and December quarters.”
Munster also said that his recent retail survey shows that Apple’s presence in stores remains significantly greater than Creative. “We spoke with MP3 player sales reps at 100 U.S. retail stores about what portable audio devices they recommend to customers and why,” he said. “58% of reps recommend some variation of iPod, while only 16% of salespeople would point their customer to a Creative device. We believe these checks provide another indication that Apple is holding its ground, if not gaining momentum, as the leader in portable audio.”
Piper Jaffray analyst Gene Munster said on Friday that Apple “will likely not show significant upside for the iPod in the June quarter” with sales of 5.5 million units, but that the iPod business will “reaccelerate” in the seasonally strong September and December quarters.
Munster’s positive expectations are based on results from a recent survey of MP3 player sales reps at 100 U.S. retail stores (non-Apple), which on average 58% of recommended the purchase of an iPod over a competing device.
Munster said in a research note obtained by iLounge that 63% of sales reps recommend an iPod model in the 5GB or larger category, in most cases recommending the 6GB iPod mini or 20GB iPod. In the 5GB or less category, 52% of sales reps recommend an iPod (4GB iPod mini or iPod shuffle).
The analyst said that 32% of salespeople who recommend the iPod do so because of the device’s ease of use. Munster said that 21% see the “massive eco-system” of iPod accessories as the top reason to own an iPod.
Meanwhile, the top reason given by 25% of sales reps for recommending something other than an iPod was its lack of an FM receiver. Approximately 14% said its close integration with iTunes is too limiting, and an another 14% said there are some players that have a better design or are smaller than the iPod.
The 8.4 million iPods Apple shipped in 2004 accounted for nearly one third of all digital audio players last year, a recent report by research firm In-Stat found. Various models of the iPod made up 30.2% of the combined worldwide hard drive and flash-based music player market in 2004.
The firm said revenue for MP3 players reached approximately $4.5 billion, “a remarkable increase of almost 200% over 2003.”
In the same report, In-Stat also said that “the exploding market” for portable audio players is expected to reach over 104 million units by 2009, up from 27.8 million units in 2004. “Drivers for this booming market include falling prices, the availability of legitimate subscription and pay-per-download online music sites, smaller hard disk drives, and increasing Flash memory capacities,” the firm said.
As part of “a growing skirmish between the record labels and digital music master Apple,” both Sony BMG and EMI are releasing more and more copy-protected CDs that can’t be transferred to an iPod.
“CDs with the protective technology prevent users from posting them on the Internet and allow users to burn only three copies onto other discs, which themselves can’t be copied again,” reports Variety. “Sony BMG is already selling about half its discs with the technology, while EMI releases its first this summer. But the technology also prevents consumers from transferring songs onto an iPod… because the technology uses Microsoft’s Windows Media software.”
Variety says that both labels hope to reach a deal with Apple that will allow iPod owners to legally rip and transfer music from the CDs to their iPod for listening on the go.
“By launching the copy-protected CDs without iPod compatibility, the labels are raising the stakes in an ongoing conflict between Apple and the rest of the music business, which wants the tech company to open its proprietary iPod and let others sell antipiracy-protected songs that work on the device,” the publication reports.