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For six years, the Internet Nexus served as my technology blog, but I've since started blogging at the SuperSite Blog instead. If you're looking for the blog, please head there. --Paul

Thursday, October 16, 2003

Big day for Apple digital media fans
A couple of people actually wrote me today wondering why I hadn't posted anything about Apple's big music announcements today. The reason is I actually went to a satellite broadcast of the event at the Apple Store at the Cambridgeside Mall and didn't get home until later than expected. Then, Mac OS X "Panther" arrived and, well... you know. Anyway, I'm back up and have collected my thoughts. Apple's announcements today ranged from excellent to good to eh and back again, and what they didn't talk about, it seems to me, was almost as important as what they did talk about. Here's what happened.

iPod - Apple's excellent (but expensive) iPod is number one, according to Apple. The company sold over 1.4 million units so far, and 336,000 in the most current quarter. "That's 2.5 iPods sold every minute, 24 hours a day, 7 days a week." Nice. The iPod controls 31 percent of the market, holding the number one spot for all MP3 players, hard drive-based or not, a huge jump from the 12 percent market share the device held at the beginning of the year. Revenue-wise, the iPod is also number one, with 56 percent of the share; this is because the iPod is too expensive, of course. That figure will come down as price pressure from the competition hits home, but the iPod's market share and sale figures are impressive, no doubt about it.

New iPod features - The rumored add-ons for the iPod--a voice recording module and a media reader (photo storage) module, are real. However, the rumors were off a bit in a few areas. First, Apple isn't making either hardware module; instead, Belkin (one of my favorite hardware companies) is making the devices. Apple did, however, write the software, which represents an interesting first (Apple collaborating with another hardware company). Both modules require the newer, dock-based iPods, which shouldn't be a huge surprise. The Belkin voice recording module costs $49 and includes a microphone and a notebook; this looks like an awesome gadget for students and anyone else that needs to record classes, meetings, and the like. It syncs with iTunes 4.1, naturally. The Belkin media reader costs $99 and lets you upload digital photos in virtual "rolls" to the iPod's massive hard drive. This unit looks cool, and it supports all the major flash memory types (though it would be useless to me anyway, as I'm never far from a notebook). Apple also unveiled the iPod 2.1 software update.

iTunes 4.1 - Apple updated iTunes to version 4.1, but I don't see any major difference in the software. The big change in this release is the "second generation" iTunes Music Store, which addresses many of my complaints about the service, most of which were based around it being a relatively start landscape. But I'll get to that in a moment: Jobs noted that the service has sold over 13 million songs in less than 6 months, a great achievement, and the company is on track to sell 30 million within the first year. However, Apple has set its sights much higher than that: Jobs says Apple will sell over 100 million songs in the first year instead, thanks largely to a massive promotional push for Windows users, which will represent over 70 percent of sales, according to Jobs. From a market share perspective, iTunes is the number one digital music download service, with 70 percent of all legal downloads. "And that's just on the Mac," Jobs noted. The company is doing what it can to entice Windows users and get to that 100 million mark, though most of this stuff is pretty fluffy. First, it's adding Audible.com audio book support directly into iTunes Music Store, which is sweet. That's over 5000 audio books, now available directly through iTunes. Second, it's adding a gift certificate feature that looks interesting with one caveat: It appears that gift certificates are redeemable on a machine and not for an account: So you might have to use that certicate only on a single machine. I'll check to see if that's the case. Third, Apple is adding an "allowance" feature so parents can allot a certain amount of money per month for their kids to buy music (and therefore not need their credit cards to do so). And finally, they added a celebrity playlist feature, so you can find out what music your favorite artists listen to. I suspect they "borrowed" this idea from Starbucks, which sell celebrity playlist CDs, but it's a neat idea. All in all, a bunch of small, incremental changes.

iTunes for Windows - The big iTunes news, of course, is the release of iTunes 4.1 for Windows. Allaying my worst fears, Apple has actually duplicated the iTunes application on the Mac for Windows, meaning the two programs are functionally and largely visually identical. That's amazing and great news for Windows-based digital media fans. I've said it before, and I'll say it again: iTunes is my favorite music app on any platform and I'm excited to see it on Windows. However... and this is a huge problem, sadly ... Apple refuses to support WMA format. That means all your WMA files won't work in iTunes for Windows. I'm going to play around with copying my iMac-based MP3 music library to the PC, but this is a pain. Furthermore, iTunes for Windows only supports the iPod, so if you have another kind of portable player, forget it. That too, is a huge problem, and combined with the WMA issue, it makes for a rather subdued cheer from the home team. Still, it's a first step, and maybe--just maybe--Apple will see the light in a future update.

Steve Jobs disses MusicMatch - One thing I found profoundly disturbing during this event was the way Steve Jobs went out of his way to insult MusicMatch. Let me put this in perspective in case you're not clear why that is a problem: In order to get into the Windows market with its iPod a year ago, Apple partnered with MusicMatch, providing Windows-based iPod users with a way to sync, copy music, and so forth. If MusicMatch hadn't stepped up to the plate, iPod for Windows wouldn't have happened and Apple would have lost millions of dollars. Now that Apple is finally ready with its own iPod-compatible software, Jobs apparently feels that it's OK to insult the quality of MusicMatch's software, which he did again and again during the presentation. If that's the way Apple regularly treats it's partners, the company should be ashamed of itself. The constant MusicMatch digs were petty and unnecessary. Incidentally, when MusicMatch went live with its own digital music download service, MusicMatch's CEO was very polite about Apple and its plans. The reverse should have been true as well. Shameful.

Promotional deals - In a bid to further its iTunes service, sell more iPods, and generate some excitement in the face of an onslaught of competition from it's WMA-using, PC-based competitors, Apple announced a number of minorly interesting promotional deals. AOL's 25 million subscribers in the US will be able to purchase music from the Apple Store directly from the popular AOL Music site, for example, and Pepsi will unveil a massive campaign at the Super Bowl in which 100 million of 300 million yellow-capped soft drink bottles will contain a winning number for a free song at the iTunes Music Store. That's 100 million free songs, over a two month period in early 2004. Nice.

Celebrity iChat AV - Steve Jobs spoke remotely with U2's Bono in Dublin, Dr. Dre in Los Angeles, and the Rolling Stones' Mick Jagger in London, all using iChat AV. Each was quite kind to Jobs, but Bono was just classic. "I'm here kissing the corporate ass," he said. "And I don't kiss a lot of corporate ass." Jobs, clearly embarassed and yet delighted by the quip, thanked Bono and moved on. Jobs also foisted a live acoustic performance by Sarah McLachlan on the audience, an disquietingly lame end that only made the opening music--a Johnny Cash cover of a Beatles song--all the more depressing. We get it: You're hip.

All in all, the event wasn't bad, and the annoucements are mostly interesting. There was nothing earth-shattering, but the company did release some impressive updates. I'm happy to see it's all happening right now: There was no beta software release, or a promise for iTunes on Windows by the end of the year. I'm still testing iTunes for Windows so I can't judge it accurately yet, but so far so good.

[ Posted at 8:29 PM | Permalink ]