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iPod accessory makers critical of Apple licensing fee

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By LC Angell

Contributing Editor
Published: Tuesday, October 11, 2005
News Categories: iPod Accessories

Two iPod accessory makers have publicly criticized Apple for its “Made for iPod” licensing fee, which reportedly takes 10 percent of the price of a product that connects to an iPod dock connector port.

Dominique Water, head of Bose’s Asia Pacific operations, said: “All Apple partners were told of the decision some weeks ago. This is a massive license fee which will not sit comfortable with many partners. Bose is not happy as the proposed fee is excessive by any standards.”

An Altec Lansing spokesperson said: “We were told of the port fee some weeks ago. It is ridiculous. It is excessive and will result in many partners rethinking their relationship with Apple. It will also push up the cost of Apple accessories.”

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Comments

1

Boo on Apple and I’m a mac person!

Posted by joe bob on October 11, 2005 at 7:45 AM (PDT)

2

this struck me as odd… on the one hand, apple is trying to keep the price of songs down (against the wishes of the music industry.)  to slap third party hardware companies with a 10% fee would indeed be ridiculous and greedy.  and if this was announced to the third party companies “some weeks ago” as *both* of the quoted sources claim, it seems that word of this outrageous notice would have been plastered over *every* web site worldwide.

so how come the only references of this i can find are on iLounge and the site from which they reference the story, smarthouse.au ?

and look what i found on smarthouse.au’s “related stories”:

First Picture New Apple iPod Video
Can Apple Be Trusted? No
Arrogant Apple Shot Down
Dodgy Apple Samsung Deal Questioned

wow… i almost expected “beleaguered” to be in these.

smarthouse.au is as *fair and balanced* as fox news. and the dearth of legitimate sites covering this story should tell us all the value of *check your sources before going to press*.

have fun…

Posted by monkeythepig on October 11, 2005 at 8:23 AM (PDT)

3

Note that Apple has just switched to including—for free—a standard adapter to let ALL iPods (starting with the nano, and then the others) use the same docking socket. A smart move for the future, that benefits everyone.

No more products that “don’t quite fit” every model. No more consumer confusion. No more buying an accessory for one iPod and then having it not work with your next one.

No more having to make, sell, and manage inventory on multiple products just because iPods have different shapes. A problem solved for etailers and manufacturers alike.

That means more appealing, more useful, less confusing docking products for consumers—who will thus buy more. More money in accessory-makers’ pockets. (Not to mention that the whole iPod market keeps growing too.)

More importantly, it eliminates a whole raft of design and manufacturing headaches for accessory makers. They can sell ONE version for ALL iPods. More money saved—possibly a LOT of money—for accessory-makers.

Will those factors pay for the 10%? I expect that very often they will.

Does 10% sound greedy from Apple? Yes. I don’t like the sound of it. But I’m not so sure iPod accessories won’t often be CHEAPER and MORE profitable to make now than before, thanks to the universal adapter system. (Which Apple is NOT selling to people, they are keeping it simple. It’s in every box.)

The docking connector and now the new adapter system are Apple’s creations, so I guess they are within their rights to use them to make money. I think the iPod market is big enough that most accessory-makers will still find it VERY profitable to stay in the business. Even without raising their prices.

I do still sympathize with the complaints. This isn’t like “Made for iPod,” which is optional, and where Apple is putting marketing dollars out to give value back. I don’t blame accessory makers for complaining when a new expense comes to light.

Posted by Nagromme on October 11, 2005 at 9:57 AM (PDT)

4

Nagromme-

I agree with much of what you’ve said, but wasn’t there already a standard that could have been used—a simple USB plug?

The dock connector doesn’t do any more than a simply USB interface can.  It is just a way for Apple to make their connection proprietary.  Now, we’re seeing the effects of when a company has a proprietary syste (akin to a monopoly).  The company starts to charge consumers and its partners exorbitant retail prices and stifling license fees, respectively.

When will the greed stop?  Unfortunately, probably never on the part of Steve Jobs.

Posted by Talking Madness in Los Angeles on October 11, 2005 at 12:05 PM (PDT)

5

“When will the greed stop?  Unfortunately, probably never on the part of Steve Jobs.”

Um, I hope you didn’t buy an iPod then…

Posted by Joe Bob on October 11, 2005 at 12:24 PM (PDT)

6

Steve Jobs is not crazy. He kinda brought Apple back from the brink of bankruptcy.

Posted by LukeA on October 11, 2005 at 12:25 PM (PDT)

7

The last I heard, a licensing fee of $10,000 was required to use Apple’s dock connector.

Other companies were already using an adapter to make their products work with various iPods.  Apple just adopted the idea, nothing much more than that.  A $0.20 piece of plastic does not equate with much time or resources spent on devloping a universal adapter, especially since nothing uses it at the moment, not even Apple’s iPod docks.

Thus, the dock connector was Apple’s creation that costs a $10,000 licensing fee to use.  And the dock adapter is just a piece of plastic that was already used in some cases, and now official at no cost to Apple.

Also, note that Bose and Altec Lansing who provided comments make some expensive iPod accessories.  A 10% levy on $300 speakers adds up to $30 and is more than what the consumer will pay in sales tax.  That sounds excessive and greedy to me.

Posted by PT on October 11, 2005 at 12:40 PM (PDT)

8

Joe Bob-

Of course I bought an iPod.  I’m fighting the battle against corporate greed, but admittedly not always winning it.

Posted by Talking Madness in Los Angeles on October 11, 2005 at 12:41 PM (PDT)

9

LukeA-

You’re right, Steve Jobs is not crazy, but he sure as heck is greedy.

Posted by Talking Madness in Los Angeles on October 11, 2005 at 12:43 PM (PDT)

10

It was my understanding that the ‘Made for iPod’ program was entirely voluntary; if you’re a 3rd-party accessory supplier, you don’t have to participate if you don’t wanna. It’s only if you desire and lust after that precious ‘Made for iPod’ identifier on yer product that these accessorizers have to sign on, and now apparently PAY for that priveledge.

Well, it’s Apple’s business to find new revenue streams, and if they CAN force people to pay for that ‘authorized’ licensing, well, why not?  It also could be their funereal as well, but I betcha most iPod idiots…er, I mean “fanatic consumers”...won’t EVEN notice the difference, what with being part of the ‘i’ crowd and all, which apparently is MORE important than life itself.

Posted by flatline response on October 11, 2005 at 1:29 PM (PDT)

11

The docking connector does NOT do the same as USB.

It carries USB, Firewire (on higher models), power, audio, video (including S-video, on higher models), remote control data, and song/artist/playlist data (for display on car dashboards, for instance). And it does all that in a very thin form factor, complete with a locking mechanism capable of holding a lanyard.

Apple didn’t develop this connector years ago thinking “USB is just as good, but wait a few years and we’ll suddenly use this for evil!!!”

Posted by Nagromme on October 11, 2005 at 2:09 PM (PDT)

12

Nagromme-

I still respectfully disagree on the merits of the dock over a standard USB connection.  There was a time when the dock bridged the gap between those who wanted to use Firewire as opposed to USB, but today the Firewire iPod relationship has all but been written off by Apple.

I like what you’re saying about the future of the iPod and the dock’s uses, but I believe they can all be accomplished with a simple USB connection.

It’s totally Apple’s prerogative to create a proprietary interface, but it’s nothing more than a move to differentiate the iPod from the rest of the pack and now it seems to be a mechanism to get an additional 10% out of manufacturers of accessories.  So, I’m not saying Apple used it for ‘evil’ but it was undoubtedly a shrewd business move.

Honestly, my biggest gripe with the dock connector is that when I use my iPod to transfer files, I have to take the cable with me because not everyone I work with has an iPod cable handy to hook my iPod up to.  On the other hand I believe just about everyone has a USB cable handy (even if we have to borrow the one from their printer to transfer the files).

Posted by Talking Madness in Los Angeles on October 11, 2005 at 2:57 PM (PDT)

13

Just a point of clarification: last we heard, it was 10% of wholesale, not retail. So rather than being $30 on a $300 SoundDock, it would be 10% of whatever Bose charges Apple or other companies that purchase the SoundDock for resale in their stores.

Posted by Jeremy Horwitz in East Amherst, NY, USA on October 11, 2005 at 3:17 PM (PDT)

14

talking madness

Your problem can be solved by simply buying a sendstation pocket dock. you may complain about the price but apple is not the only ones who uses a proprietary port on thier products just look at windows pcs mouse and keyboard ports. anyway if they thought usb was any better they would have switched to it in the begining

Posted by BIGP in Texas on October 11, 2005 at 4:06 PM (PDT)

15

You can send power, data, and video over USB2.

Posted by Demosthenes on October 11, 2005 at 4:30 PM (PDT)

16

Why shouldn’t Apple do this? I mean, it is their product that spawned all these subsequent third-party additions, so it only seems somewhat fitting that they would get a slice of the profit.

What the rep from Altec Lansing says is pure s**t. Sure, third parties can stop making accessories for the iPod, but I’m pretty sure they’d have a hell of a hard time finding another product that provides them with as many opportunities.

They could always stop making stuff for iPods and instead focus on the new Walkman. That’s showing them…

Posted by ooda on October 11, 2005 at 6:11 PM (PDT)

17

Um…why isn’t anyone paying attention to the second comment? I haven’t read about this yeat on any of my usual Mac news sites, so how do we know this is legit news? It seems inordinately greedy, and even worse, foolhardy.

Here’s a quote from another of this site’s stories:

“The fact is that Apple is one of the most arrogant, stuck-up computer companies in the world, and yet for years it has failed to make it in the PC market.”

Um, yeah. Sure sounds like unbiased journalism to me.

Aha. Just checked http://ipodobserver.com and found this:
http://ipodobserver.com/story/23869

So how about we get a clarification on this from ilounge, before we all get so hot and bothered?

Posted by holy_cow on October 11, 2005 at 8:28 PM (PDT)

18

Funny that Bose should complain about over-charging. Their sound dock is the biggest waste of $200 in the history of electronic entertainment. The sound is good, not great, you can’t use it with any other device, and its “portable” only if you have a wall plug near by. They have made a fortune off the Sound Dock thanks to branding recognition only. They should just suck up the fee and ride the iPod wave like everybody else.

Posted by fnkywhtfrtysmthng on October 11, 2005 at 9:03 PM (PDT)

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