Napster today introduced a portable version of its digital music subscription service, backed by a $30 million print and broadcast ad campaign that takes aim at Apple’s iPod and iTunes Music Store. Napster’s promotion will include a Super Bowl ad, called “Do the Math,” that argues it would cost up to $10,000 to fill up an iPod, while it would only be $14.95 a month to load up an alternative player through the new Napster To Go service. The ad campaign also includes strategic alliances with companies that make rival players to the iPod—Creative, Dell and iRiver.
“Napster To Go provides infinitely greater value and is much more exciting than the iTunes pay-per-download model,” said Napster CEO Chris Gorog.
Apple CEO Steve Jobs said he does not believe that there is a significant number of music fans willing to pay $180 a year to subscribe to a collection of tracks that they do not permanently own. “When you rent stuff, in the end you’re left with nothing,” Jobs said.
Tuesday’s USA Today features a cover story on the impact Apple’s iPod has had since the device was introduced in 2001. The article touches upon several general topics, including the iPod economy, cultural trends, iPod-using universities, iPod naysayers, podcasting and more.
“Apple may have introduced its innovative digital music player in 2001, but of the 10 million iPods sold to date, 8.2 million of the $249 to $399 gadgets were purchased in 2004. Nearly 5 million were bought over the holiday season alone. With its new $99 Shuffle, Apple expects the streets to soon sprout even more iPod people,” writes John Zich.
Click “Read more” to see a full-size version of the USA Today front page.
Business 2.0 has included the U2 silhouette iPod ad campaign in its 2005 Smart List, the magazine’s “annual tip of the hat to the brightest minds in business and the miraculous feats they’ve accomplished.” The Apple-U2 creation was named the “Smartest ad campaign.”
“Thanks to a smart decision to cross-promote two well-known entertainment brands—a collaboration hatched by U2 lead singer Bono and Apple CEO Steve Jobs, who are longtime friends—each side contributed an edgy dose of cool to the advertising effort, which was produced by TBWA/Chiat/Day,” writes Thomas Mucha. “The pairing scored with music fans. Following its exclusive release on Apple’s iTunes Music Store, U2’s How to Dismantle an Atomic Bomb went on to top the iTunes sales charts for weeks after its late-November debut. Offline the album launched at the top of the U.S. pop charts, selling almost twice as many copies as U2’s last U.S. release did during its first week.”
PortalPlayer, whose chip powers hard drive-based iPods, reported record revenue on Thursday thanks to strong sales of Apple’s music player. PortalPlayer said it had revenue of $44.7 million for its fourth quarter, up from last year’s revenue of $8.1 million—a 75 percent increase. The company posted a profit of $10.5 million, or 50 cents per share, compared to a net loss of $759,000 in the fourth quarter of 2003.
Synaptics, maker of the touchpad technology used in the Click Wheel of Apple’s iPod, said Thursday that second quarter profit jumped 178 percent due to increased demand for the iPod during the holidays. The company reported income of $9.7 million, or 33 cents a share, up from $3.5 million, or 13 cents, a year earlier. Synaptics said revenue rose 65 percent to $56.5 million from $34.3 million.
Stan Ng, Apple’s director of worldwide iPod marketing, is the latest Apple executive to dismiss a video-capable iPod. “There is no legal way today of taking a DVD and making it viewable on a portable device. There are issues with video, and no infrastructure for acquiring that content,” Ng said. “For a player with a 3.5-inch screen, you have to wonder if it would be worthwhile. You can’t watch video while you’re jogging or mountain biking. Fundamentally, at a corporate level, we’ve been clear about our involvement in music and photos—we’ll see what happens with video over time.”
Apple is looking for its new iPod shuffle to help boost its share of the digital audio player market in Japan to 80 percent from around 50 percent now. Apple Japan vice president Yoshiaki Sakito said Apple has already received more pre-orders for the tiny device in Japan than those placed for the iPod mini. Sakito also said that a Japanese version of Apple’s iTunes Music Store is expected to launch before the end of the year.
Creative CEO Sim Wong Hoo has offered some harsh words for Apple’s new iPod shuffle. “Actually, to me it’s a big let-down: we’re expecting a good fight but they’re coming out with something that’s five generations older,” Wong Hoo said. “It’s our first generation MuVo One product feature, without display, just have a (shuffle feature). We had that—that’s a four-year-old product.”
“So I think the whole industry will just laugh at it, because the flash people—it’s worse than the cheapest Chinese player,” he added. “Even the cheap, cheap Chinese brand today has display and has FM. They don’t have this kind of thing, and they expect to come out with a fight; I think it’s a non-starter to begin with.”
Speck Products today announced the first third-party plastic case for Apple’s new iPod Shuffle. Designed with shock-absorbing, tear-resistant plastic, the SkinTight for iPod Shuffle case “adds protection without adding bulk,” according to the company. The rubberized skin features a two-piece design that allows for easy synching and charging of the iPod shuffle. The SkinTight for iPod shuffle is scheduled to begin shipping in mid-February. Singles in multiple colors will be priced at $19.95 and 3-packs will be priced at $29.95.
iLounge has selected the following six new products as its 2005 Macworld Expo San Francisco Best of Show winners. All of the products were tested first-hand by iLounge staff members on the show floor of the large Mac event.
Best New iPod Case - Solio Urban Recycled Rubber Case
This rugged case is made from recycled tire inner tubes and exterior rubber. They’re all handmade and each one has its on individual style and texture.
Best New iPod mini Case - Miyavix Cloth and Leather Kimono Case
This affordable case is fashioned out of beautiful Japanese fabric with great Kimono patterns. It sports leather accents and may redefine iPod case fashion.
Best New iPod Expander - BTI 3-in-1 FM Radio Receiver/Transmitter/Remote
BTI’s first-to-market iPod FM radio receiver, transmitter, and remote control cable looks to be an impressive accessory. It connects through the iPod’s headphone jack and will offer real-time tuning of five preset radio stations, and more.
Best New iPod In-Car Accessory - Griffin Technology SmartDeck
This innovative cassette adapter lets you control your iPod using the built-in controls of any cassette player. By pressing fast-forward or rewind on your cassette player, your iPod will advance to the next or previous songs. The pause and stop buttons will also do the same on your iPod.
Best New iPod Wireless Accessory - TEN Technology NaviPlay
We selected this Bluetooth wireless audio system primarily for its enhanced portability and the company’s planned bundling of HP Bluetooth headphones.
Most Likely to Succeed - Apple iPod shuffle
While readers should expect an in-depth review shortly, we can say that Apple’s smallest and most affordable player is going to sell exceedingly well. Unsurprisingly, the company has another huge hit on its hands.
As always, iLounge notes that its Best of Show awards are made on initial appeal, practicality, and specifications rather than final build quality, which will need to be formally compared against competitors in iLounge reviews.
Speaking with iLounge at the Macworld Expo in San Francisco, comedian Sinbad expressed continued love and admiration for Apple’s Mac and iPod product lines, joking that the Mac mini was “the sort of thing you buy even if you don’t need it,” and claiming that he’d be buying several for rooms in his house. He also jokingly predicted that people would soon be wearing multiple iPod shuffles at once to hold a large music collection.
Updated: Though multiple vendors on the show floor at San Francisco Macworld Expo told iLounge yesterday that Apple’s retail store in San Francisco had sold 20,000 iPod shuffle units in its first four hours of availability this week, it appears that the impressive number may just be the result of an Expo ‘telephone game.’ Other iLounge sources have subsequently reported that only 2,000 were sold at the store, a rate of roughly 8 shuffles per minute rather than the 80+ per minute required by the higher number. We apologize for the original report.
As iLounge notes in its upcoming review of the iPod shuffle, while some individuals purchased four, six, and nine of the 512MB, $99 units, the day’s record was apparently set by someone who purchased 24 at once. iPod shuffles are currently shipping to Apple retail stores.
Update 3: Reader David C. notes that Apple’s online store is already shipping 512MB iPod shuffle orders, with hardware leaving Ontario, California and “two-day shipping” delivery dates estimated at January 17. “This is well before the ‘1 week’ Apple.com was quoting,” says David, who is “VERY PLEASED!” However, reader Joe M. says that his 1GB iPod shuffle online order is listed with a 1/26 ship date.
Kirk McElhearn, author of the book “iPod & iTunes Garage,” announced today an update to his popular book. The update adds a 3-page iPod shuffle “cheat sheet” that aims to help readers “grasp the basics of this hot new device; that is, to help them determine what it is, how it works, and how it differs from other iPod models.” The update is available immediately as a PDF download from his weblog.
iLounge has discovered that Apple’s newly announced iPod shuffle does not offer support for high-quality AIFF or Apple Lossless audio files. According to Apple’s technical specifications page for the iPod shuffle, the tiny player only plays AAC, MP3, MP3 VBR, Audible and WAV, unlike the iPod mini, 4G iPod and iPod photo models. This omission joins the player’s lack of screen, Dock Connector port, and accessory port. It is not currently known if the iPod shuffle was intentionally crippled by Apple to not allow users to play these two high-quality formats, or if the technology inside the device simply not capable of handling them.
In a research note to clients on Wednesday, Merrill Lynch analyst Steven Milunovich said Apple’s new iPod shuffle could take the top position in the flash-based MP3 player market in the next few quarters. “If Apple can ramp up production, Apple could take the No. 1 position in the flash market in the next couple of quarters. If Apple hits 5 percent share this quarter, that could be 300,000 units,” Milunovich said. “If it takes off, the number could be much higher, possibly passing the 1million mark.”
Milunovich pointed out that Apple currently has 65 percent of the total digital music player market, compared to flash’s 29 percent share. According to research from IDC, the flash player market has three times the units as the hard-disk drive-based (HDD) music player market, but about the same revenue ($2.3-2.5 billion). “Now that 4.5 million HDD iPods were sold last quarter (possibly 2 million in December), it was time for Apple to attack the next market with a lower cost flash-based iPod shuffle,” the analyst said.
Milunovich dismissed the notion that consumers will balk at the lack of a display on the iPod shuffle. “Some have indicated that the lack of a display will be an issue, but we are less concerned,” he said. “The $99 version holds 120 songs and the $149 holds 240—does one really need a display with that few songs? We believe this is a better option than a 60-song version with a display for $149. If a display is need then one needs to move up to he HDD iPods at $249+. We believe this also ensures that cannibalization will be limited while snaring more in the iTune/iPod net.”
A huge new collection of photos (140+) from the first day of the San Francisco Macworld Expo has been posted to the iLounge photo galleries, including photographs of hitherto undisclosed iPod accessories and other amazing stuff on the show floor. You can see the gallery here. Stay tuned for more photos of Day 2 thru 4 of the Expo.
During his keynote presentation at today’s Macworld Conference & Expo, Apple CEO Steve Jobs revealed that more than 4.5 million iPods were sold in the December quarter—500 percent growth year over year. Jobs said the total number of iPods sold to date now stands at over 10 million units, with 8.2 million of those being sold in 2004. He said the 10 millionth iPod was sold on December 16, 2004.
Jobs also said that more than 230 million songs have been purchased from the iTunes Music Store worldwide since it was launched in April 2003. He said that Apple is now selling approximately 1.25 million songs a day and that the company is on pace to sell nearly half a billion songs a year. Jobs also noted that over 1 million pre-paid iTunes cards have now been sold.
Apple has posted a commercial for its newly announced iPod shuffle, which features the song “Jerk It Out
While potentially a mundane topic to some of iLounge’s readers, Apple today introduced the “Made for iPod” certification, a badge that iPod accessory developers can display to differentiate their Apple-authorized accessory products from unauthorized ones. The Made for iPod badge addresses a subject of increasing concern to iLounge in recent weeks - the proliferation of certain low-quality and potentially dangerous iPod accessories that may harm your hardware, even when used as advertised and intended. Currently, it appears that vendors receiving the badge are only those whose products interface electronically with the iPod, rather than case makers.
According to some vendors on the show floor at Macworld San Francisco, Apple’s motivations behind the Made for iPod program may be equal parts financially driven, marketing driven, and consumer protection driven, perhaps in that descending order of importance. iLounge was told that the Made for iPod badge was originally proposed as a potential royalty stream for Apple - a means by which the company would collect revenues from sales of “authorized” accessories, and suggested that vendors might be able to charge even more for officially sanctioned accessories. Key to the program is Apple’s continued interest in licensing its proprietary male Dock Connector plugs and female ports - now also called the “iPod Connector” - while warning iPod owners about the dangers of insufficiently tested accessories that may create electrical disruptions in iPod hardware.
Like other company seals - such as Nintendo’s once-famous Seal of Quality - the Made for iPod program may have benefits for consumers, or may just be an opportunity to increase company licensing revenues while offsetting marketing costs. As iLounge has itself witnessed and heard external accounts of peripherals that wreak havoc with iPods and their batteries, but remains concerned about the slowly upward-creeping price of iPod accessories, we will continue to closely monitor this story in the months ahead.
On a day in which Apple CEO Steve Jobs promised “a lot of firsts,” the company unquestionably delivered: most importantly, a $499 iPod-matching “Mac mini” was introduced with a January 22 release date, followed by the announcement of “iPod shuffle,” the least expensive and smallest capacity iPod at a $99/512MB configuration. Both products were touted as the cheapest ever introduced by Apple in their respective categories, and offered in modestly upgraded versions at $50 and $100 premiums. Prices for their higher-end brethren were left unchanged, such that iPods now range in price from $99 to $599, and Macintosh computers from $499 to $2999.
For the full story of all of the major announcements at Apple CEO Steve Jobs’ keynote speech in San Francisco, please click on Read More. Today’s major announcements are as follows: the introduction of the iPod shuffle, a $99-$149 flash memory-based iPod, the introduction of the Mac mini, a $499-$599 Macintosh computer to attract ‘switchers’, a collection of new iPod shuffle accessories from Apple, changes to iTunes, a Motorola phone with an ‘iTunes client,” updated sales figures, and new Mac software.
iLounge is proud to present the world’s first photo gallery of the new iPod shuffle, Apple’s $99 iPod (512MB). A limited quantity of iPod shuffle units were made available at Apple’s San Francisco retail store, and iLounge was on hand for the launch. Additional units are shipping from Apple’s factory in Asia today, and should be available nationally this week.
The 512MB unit includes 120 song storage capacity, a 12 hour rechargeable battery, and headphones. A 1GB unit will also be available at $149.
Ipodlounge has six iPod shuffles. We’re giving away three to our readers. Stay tuned for the giveaway details later today.