HiFi Blog: digital audio goodness

Before the Apple Expo officially kicked off yesterday, Steve Jobs & Phil Schiller (senior vice president of worldwide product marketing) held a Q&A session with the press, where they discussed all things that’s interesting about Apple nowadays (the transition to Intel chips, the dominance of the iPod and iTunes, etc.). Mostly thanks to Macworld UK’s excellent reporting (links provided at the end of this post) we’ve got a huge array of quotes to choose from, covering all the hot topics. We’ve picked the most important ones, categorized them and provide them below. All quotes (unless otherwise noted) belong to Apple’s CEO, Steve Jobs.

Record labels and variable pricing

We’ve all read the reports: the major labels are pushing Jobs for variable song pricing on the iTunes Music Store. They want the latest hits to sell for more than $0.99, and the old, low-selling tracks to go for less (say, $0.79). Whether we’ll see more $1.39 (or $1.99) than $.079 tracks or the reverse (even if the latter makes sense, since there are more oldies than hits) is left as an exercise to the reader.

Jobs’ reply: “The problem is we are still competing with piracy. The labels make more money from selling tracks on iTunes than when they sell a CD. There are no marketing costs for them. We are competing with piracy, so it needs to be a fair price [...] If they (record labels) want to raise the prices, it means that they are getting greedy. If the price goes up, they (consumers) will go back to piracy and everybody loses.” (Jobs is a HiFi Blog reader—uh-huh.)

Interesting stat of the day: About 75% of the iTMS catalogue sells at least once a month.

Apple’s dominance on the digital music front

Apple does it all, and makes them work together seamlessly: “We have competitors that are trying to kill us, Why have we been able to maintain our position? The iPod looks like a piece of hardware, but it’s not. It’s software. And iTunes is the best jukebox and iTunes Music Store is the best digital music distribution service.” (emphasis ours)

Patent wars

The reports on Microsoft and Creative patents related to the iPod were dismissed by Jobs as “lazy reporting.” He claims the iPod constitutes prior art: “We have lots of iPod patents. Microsoft filed its patent months after we launched the iPod.”

Since we reported on such a patent ourselves, we’re kinda pissed by the “lazy reporting” comment. Notice how he comments only on Microsoft’s patents, noting that the iPod was released before them. Sure, but the ‘Zen Patent’ (which is the one we covered here; also) is certainly not touched by the release of the iPod (and thus, the iPod as a prior art argument), simply because Creative launched a product that used it before Apple. So, with all due respect, allow us to dismiss Mr. Jobs’ words as “lazy commenting”.

Regarding the iPodcast patent application that came to light recently: “I know why we applied for that patent. We aren’t going to use it.” Hmmm, anyone have a guess on this? Maybe trying to stop someone from selling podcast-creation software that would go by that name?

Bluetooth on iPods

A “technology in search of a problem” according to Jobs, it’s probably dismissed for now, thanks to its slow speeds : “With Bluetooth, songs take a while to download. And if you have Bluetooth headphones you have to charge them as well as the iPod. People don’t want to do that. Also the sound isn’t good enough.”

The iPod nano move

“We launched the iPod nano two weeks ago rather than at the Apple Expo because in the run-up to Christmas every week counts. The launch had been planned for over a year.” Dropping the best-selling Mini for an all-new device is like “having a heart transplant right before the holiday.”

Radio on iPods, and other features

“We don’t get a lot of customers asking for it” (yeah right); Schiller notes that there’s now radio-on-demand in a way: “thanks to podcasting you can listen to radio shows whenever you want to,” which is kinda true but we still want radio.

What about extra features in general? “We are very careful about what features we add because we can’t take them away.”

Video iPods

It’s the already known take of Apple on video-watching as foreground activity: “You can already download movies on the iTunes Music Store, and some albums offer video as an incentive to buy the music. We also offer video podcasts, but will people buy a video device just to watch this video? So far they haven’t. No one has been successful with that yet.”

Download music over the air on your cellphone

With songs most probably high-priced, and the need to back up those tracks on your PC just in case, this scenario isn’t exactly a user’s dream: and “I’m not convinced that it will be successful. The network providers will charge a lot to download music to a mobile – maybe $3. You will have to back the music on your phone up using your PC. If you lose a phone then you loose all your music. If you get a new phone you have to transfer it all. It’s not clear that buying music over the air makes economic sense. People only use 5 per cent of the features on their mobiles.”

Miscellanea

• On the computer acting as media hub in the living room: “Making a component for the living room is easy to do, but it is the go to market strategy that is difficult. It’s not a technical problem, it’s a go to market problem. [...] I don’t think the convergence of television and computer is going to happen.”


• On Apple’s insistance in not discussing future products (and sending a few lawsuits to rumor sites along the way): “Microsoft is copying our operating system, Dell is copying our hardware. They just have to follow our tail lights.”


• On the iPhone: “We do not say anything about future products. We work on them in secret, then we announce them.”


• On the “Designed in California” (instead of “Designed in the US”): ”(It’s) because we like California. It is where we are from. It’s not because we are ashamed by the US.”


• Schiller on the iPod effect driving Mac sales: “Customers acceptance of the iPod gives them confidence to try the Mac. They want to know if the rest of our products are as cool.”

Apple’s Jobs warns on music pricing [biz.yahoo.com]
Apple Expo: Steve Jobs talks Macintosh [macworld.co.uk]
Apple Expo: Apple CEO Steve Jobs slams “greedy” labels [macworld.co.uk]
Apple Expo: Jobs on mobile music and living room PCs [macworld.co.uk]
Apple Expo: Jobs on iPods and Apple secrecy [macworld.co.uk]