Rival of Apple, Armed With Fresh Patent, May Seek IPod Royalties

LATimes: (reg. req.) If this happens, it will be a sad commentary on the state of affairs of the digital music industry, unable to compete with iPod. Creative Technology said it had been awarded a patent for technology used in the iPod - which means the rival manufacturer of digital music players might hit Apple up for hefty royalty payments on every iPod sold.
Creative's patent, awarded Aug. 5, covers the interface that lets users scroll through screens and choose which songs to play, said Craig McHugh, president of Creative Labs, the U.S. unit of Creative, which is based in Singapore. "We're openly looking at all of our alternatives," McHugh said. "A patent protects your intellectual property, and we'd be very open to discussing with other companies who would like to use our user interface in their products or future products."

Apple iPod Phone To Be Released Sep 7? With Cingular?

Apple is touting a big announcement at a 10 a.m. (PDT) press conference next Wednesday (Sep 7) at the San Francisco's Moscone Center. NYT suggests in a story that it is the much-expected Apple-Motorola iTunes phone.
Roger Entner, a telecoms analyst with Ovum, said he had been told by an industry executive that the new phone, to be made by Motorola, would be marketed by Cingular Wireless. The software will allow people to transfer songs from a PC to the mobile phone, then listen to the songs, presumably through headphones.
WSJ also says the same thing, quoting sources. Cingular is expected to make the phone available in time for the holidays.
Also, Apple may introduce a line of iPods intended to replace its hugely popular iPod mini line...

Music Price Elasticity Debate

SharkJumping: Sean Ryan dissects it very well: despite what the labels argue, "the studies show that when you measure behavior across a longer period of time, everyone is better off with lower prices for music downloads, with $.50 being actually the magic number, especially for a business which has NO hard cost of goods outside of artist royalties, which are almost never on a fixed basis so they will decrease with the price. "

Apple & Record Labels Square Off

NY Times (reg required): It's well known that many record labels aren't happy with the 'one price fits all' approach to digital music sales taken by iTunes, and there is speculation that when the contracts come up for renewal early next year some labels may not renew them unless Apple changes its pricing strategy. Of course, Apple controls 75-80% of the digital download market, so it will be a gamble whether that situation will see people changing where they buy their music or simply not buying from labels that aren't available at the iTunes store.
iTunes Japan launched without songs from two major labels -- Sony BMG Music Entertainment and Warner Music Group -- but that didn't stop it outpacing the monthly sales of its competitors within the first few days of launching the service.
Some record lables (Universal Music Group and EMI Group were mentioned in the article) recognize that they will probably lose a pricing battle with Apple and are instead "counting the months until the major wireless phone carriers enter the business of selling songs to mobile phone customers. <strong>Since there are many more mobile phones in use than there are iPods, the industry thinking goes, the arrival of a broad mobile music market will erode the leverage Mr. Jobs now holds</strong>".
The problem with that thinking is that it's a dead-set certainty that the record labels are going to want a higher proportion of the profits from song sales than Apple. iTunes reportedly makes about 4c from from every 99c song download, while the lowest percentage for mobile content in the west is currently the 14% taken by o2 UK...most are a lot higher, although whether that can be sustained is another matter. The upshot is that the price of mobile music will have to be significantly higher than the iTunes store just for the record companies to get the same amount of money for each song. Of course, that's what the record labels want...but there's a general consensus that it's not what the consumer wants.
The article also mentions another sore point for music execs is "the fact that Apple generates much more money selling iPod players than it does as a digital music retailer, leading to complaints that Mr. Jobs is profiting more from tracks downloaded to fill the 21 million iPods sold so far than are the labels that produced the recordings", <strong>which is a fairly silly complaint to have, kind of like saying that Nokia is profiting more from mobile content than all the mobile content companies</strong>, so therefore the price of mobile content should go up. Besides which, the same argument will apply to the mobile phone industry, so a change of device isn't going to help anything...
And in closing, a great quote from Gartner:
"As I recall, three years ago these guys were wandering around with their hands out looking for someone to save them," said Mike McGuire, an analyst at Gartner G2. "It'd be rather silly to try to destabilize him because iTunes is one of the few bright spots in the industry right now. He's got something that's working."
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Apple to buy 40% of Samsung's flash chips-analysts

Reuters: Apple plans to buy as much as 40 percent of Samsung's flash memory output in the second half for its new flash-based iPod Mini MP3 player, iSuppli and Deutsche Bank analysts said on Wednesday.
It is expected to introduce a 4-gigabyte version of the iPod Mini that uses NAND flash memory instead of a hard disk drive for the Christmas season.

Apple plays winning tune in Sony back yard

Guardian: Apple's foray into Japan - which is the world's second biggest market for music in terms of album sales - has sparked talk of a rapid growth in the market in digital music downloads and of a bitter battle with Sony.
Analysts agree that the momentum is with the visitor from California.

Nokia's Music Phone To Use iTunes?

Update: So much for that: Nokia denies any deal.
Reuters: This will add to the storm of speculation around Apple iTunes' mobile plans..it has publicly announced it is working with Motorola, but nothing has been launched as of yet.

Now a Finnish newspaper is reporting that Nokia will incorporate iTunes in its upcoming music phone N91.
"I've seen already a phone like that," Anssi Vanjoki, head of Nokia's multimedia unit, told the newspaper. [The original newspaper article in Finnish is here]
Nokia unveiled in April its N91 multimedia phone which will have a 4-gigabyte hard drive to store thousands of songs...it will be launched in Q4.
Related: Nokia Launches Mobile With Hard Drive

Apple Not Keen On Subsciption Market

BusinessWeek: Apple is not keen to enter the music subscription market, and may not do it anytime soon, says this BW story, unless one of its rivals comes up with a way to make subscriptions mainstream.
According to the story, earlier this summer, soon after Yahoo's announcement of its Music Unlimited subscription service, Apple wondered about a subscription service. One of the label executives said Apple was concerned about what e-tailer Amazon.com or Google might do in this area. But, says the source in this story, Apple seemed unlikely to make a move until a rival began forging inroads into its music empire.
And that hasn't happened in any big way: So far, only 2 million-or-so people have signed up for offerings such as RealNetworks' Rhapsody service or one from Napster, and Yahoo's new service hasn't made too many inroads either.

Microsoft, Apple in iPod patent tussle

News.com: This is down and dirty: In a ruling issued last month, a patent examiner rejected Apple's attempt to patent some of the user interface concepts behind the popular digital music player, noting that Microsoft developer John Platt filed for similar claims five months before Apple did.
A Microsoft executive noted on Friday that the company is always open to licensing its technology.

Apple Computer Will Refund Canadian Tax on IPod Music Players

Bloomberg: Apple will refund to consumers a tax on the devices levied by the Canadian government...this follows a Canadian Supreme Court decision upholding a lower court ruling that the tax was invalid.
The tax of C$2 to C$25 per player went to a fund to compensate the music industry for alleged piracy.