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00:20 AAPL Apple delay is no big deal - Barron's (90.24 )
Plugged In reports Charles Wolf, formerly a hardware analyst with Needham & Co. and president of Wolf Insights, believes Apple's (AAPL) Leopard OS delay will have no long-term impact . Furthermore, he says the introduction of Leopard should give Apple a $150 mln-$200 mln one-time revenue boost, based on upgrades by existing users alone. He expects the delay to shift additional earnings into Apple's FY08, thus lifting profits next year by a dime a share, to $3.85.
Wolf suspects that Apple may try to smooth over the situation by initiating an upgrade coupon program for Mac purchasers who choose not to wait. Unlike Windows operating-system upgrades, which have been difficult for average users, Apple upgrades are usually easier, Wolf argues. "It's painless," he says, and shouldn't cause potential Mac buyers to rethink their decisions.
>Apple's model let's everybody know where they stand
I agree and certainly prefer the pay-per-song model, which imposes some discipline.
My son is the VP and GM of a music publisher in NYC. The result is shelves of CDs that I'll listen to "someday."
07:58 AAPL Music labels ask Apple to adopt subscription - FT (92.19 )
Fnancial Times reports the world's biggest music cos are expected to ask Apple to introduce a music subscription service to its iTunes digital media store as part of negotiations to renew their agreements with the computer co. Those discussions will begin in earnest next week when Universal Music sits down at the bargaining table with Apple.
Universal's competitors, Sony-BMG (SNE), Warner Music (WMG) and EMI, have either commenced talks with Apple already or are poised to do so, according to people close to the matter. Execs at Universal and other labels believe a subscription service could prove more lucrative for them than iTunes' prevailing model of charging consumers 99 cents per track because it would increase consumption of music. It would also entitle the labels to a share of monthly payments, in addition to small licensing fees each time their songs are played. Record cos may also renew their request for variable pricing on iTunes as they try to ramp up their digital profits.
08:00 AAPL Apple: Color on Leopard delay (92.19 )
JMP Securities notes AAPL announced yesterday afternoon it will be delaying its next-generation operating system, Leopard, until Oct. Firm had been anticipating its release in April or May and had heard just a few weeks ago it was scheduled to be released on time.
Firm does believe, however, that there may be some continued "pauses" in Mac sales as consumers wait for the computers to come out of the box with Leopard as opposed to buying a Mac now and paying an additional fee (~$150) for an upgrade.
They are reducing their 3Q07 and 4Q07 ests but are increasing their 1Q08 ests to reflect a shift in timing of purchases of Macs until the Dec Q. For FY07, they are reducing their rev est from $24.4 bln to $24.1 bln and EPS est from $3.19 to $3.16. For FY08, they raise their rev est from $29.6 bln to $30.0 bln and EPS est from $3.51 to $3.58...
Piper Jaffray says that while they are not convinced the delay is entirely related to the iPhone, the important part is they believe AAPL's product development remains robust, and the iPhone, Leopard, and other new products are coming.
Firm notes AAPL reaffirmed the on-time arrival of the iPhone in June as part of the announcement, which they see as a positive that outweighs the delay of Leopard.
08:58 AAPL Apple: Quarterly preview; Macs seeing slight pause but positioned to re-accelerate in June; iPod sales better than expected - AmTech (92.59 )
AmTech notes AAPL will report March Q results on April 25. Firm believes Macs will likely come in towards the lower-end of expectations due to a pause ahead of Mac OS X Leopard's launch and anticipation of new 8-core Mac Pros.
However, sales of iPods appear better than expected. They believe that following the likely launch of Leopard at its WWDC 2007 conf, Mac sales are positioned to resume accelerated growth.
Firm reduces their near-term Mac unit assumptions but raises their overall ests due to more favorable component pricing, better iPod sales, and resumed Mac growth. For the March Q, they are now modeling $5.12 bln in rev, $0.63 in EPS, 1.4 mln Macs, and 10.3 mln iPods (consensus at $5.2 bln and $0.63. For the June Q, AAPL will likely offer its usual conservative guidance.
Should AAPL shares pull back at on short-term concerns, we advise investors to buy the stock.
10:08 AAPL Apple: Preview of 2Q07 indicates continued positive momentum - JMP (93.53 -0.72) -Update-
JMP says for AAPL's March qtr, they are forecasting rev of $5 bln and EPS of $0.59. They believe they have modeled more holiday seasonality into the model than others, but overall their checks indicate that momentum with AAPL continues to be positive.
The firm believes they could see upside from the Mac business and believe there is at least $0.02 of upside from better than expected gross margins due to continued favorable component pricing, particularly NAND flash pricing.
The firm says that a sleeper hit moving forward could be the Apple TV, which was released at the beginning of April, but it will have no impact on the March qtr.
08:36 AAPL AppleInsider discusses Citigroup note on Apple's Leopard, 3G iPhone and new iPod Nanos (94.25 )
AppleInsider reports analysts at Citigroup are recommending that investors buy shares of Apple ahead of upcoming product launches, which they say will include Mac OS X Leopard, a touch-screen video iPod, higher capacity iPod nanos and a 3G version of the iPhone.
As part of an in-depth co overview released to clients earlier this week, analyst Richard Gardner and his team said they expect Mac OS X "Leopard" to launch on June 11 at the co's Worldwide Software Developers Conference. They estimate the release will generate between $50 and $75 mln in incremental rev per quarter for Apple during its first few quarters on the mkt, boosting the co's EPS by about a nickel with its attractive 85% gross margin. Based on Gardner's checks, iPhone will proceed the launch of Leopard in "late-June."
The analyst told clients the device is likely to deliver more attractive economics than Wall Street is expecting, giving Apple's willingness to work exclusively with Cingular and its sticky, high-rev subscriber based. Gardner also told clients to keep a look out for new iPod models beginning in the fall, including a 12-16GB nano priced at $249 and a video iPod with the same touch screen as the iPhone priced at $250-400.
08:17 WMG Warner Music Group’s plea to EMI investors - Sunday Times (17.03 )
Sunday Times reports Warner Music is considering pursuing a merger with EMI by making a direct appeal to its rival's shareholders in an attempt to undermine the opposition of EMI's mgmt. The EMI board last month rejected what it described as a "preconditional offer" pitched at 260p per share.
Any deal between the No. 3 and No. 4 recorded music cos would require clearance by competition regulators. Warner remains keen to press ahead because it believes the European Commission's review of the Sony (SNE) BMG merger provides an opportunity to reshape the global music industry, creating three strong "majors" and a vibrant independent sector.
Warner sources said the American co's planning was given fresh urgency last week after EMI announced an initiative to scrap copyright protection on digital music. Although the move was widely praised by technology and consumer commentators, Warner is concerned that EMI could be making a grave mistake. Its mgmt was astonished that EMI had made a decision with such potentially far-reaching consequences while it was a bid target.
10:32 AAPL AppleInsider discusses yesterday's UBS note on the Apple iPhone (93.73 -0.54) -Update-
AppleInsider reports UBS researcher Tony Andersson on Wednesday ventured beyond the Mac to address the more difficult subject of the iPhone. In a note to private investors, the researcher was confident that developments in Apple's cornerstone iPod and Mac sales would carry the co upward, growing the former to 24% of the world's media player share and its share of computers by half a percentage point. Mac OS X Leopard in particular would help the Mac, he said.
However, Andersson labeled the iPhone as the real spark for Apple's flame in 2007. It would help jumpstart Apple's revs both during the June launch of the handset in the U.S. as well as towards the end of the year, when the device should make its first appearance in Europe.
This optimistic forecast, however, presented a mixed blessing from the analyst's point of view. To him, the self-same explosion of iPhone sales could potentially tear people away from the iPod, creating a squeeze as shoppers are increasingly forced to choose between one or the other.
08:29 AAPL Apple: Rogers casts doubts on iPhone for Canada - AppleInsider (94.27 )
AppleInsider reports Rogers Wireless, the only wireless service provider in Canada with a network suited to meld with Apple's upcoming iPhone handset, is now dismissing the notion that it would sell the device as "speculation." "We haven't announced whether we will carry the iPhone," Odette Coleman, manager of corporate communications for Rogers Wireless, said in an e-mail to CBC News Online.
The statement strongly contradicts an e-mail sent out by Rogers to subscribers following the unveiling of iPhone back in Jan. In that communication, the carrier reportedly said that it was working with Apple to launch the device in Canada "as soon as possible."
Since iPhone operates on the GSM wireless technology standard, Rogers would be the only carrier in Canada suited to offer the device to its customers, as all other providers in the country use the CDMA standard.
KCMW-I have no doubt that Steve will turn this to his advantage, though I don't follow the whole DRM issue closely enough to have any idea exactly how.
07:26 AAPL Apple: Checks suggest seasonal March Q; raising ests due to NAND price declines - TWP (93.65 ) -Update-
Thomas Weisel checks suggest seasonally down March quarter (as expected) but continued Flash price declines should boost margins, firm is nudging up their EPS est. Firm's checks suggest a seasonally soft Q for Mac and iPod, which is not surprising given normal seasonal demand trends.
They note, however, that another 30%-plus q/q decline in Flash pricing should help margins; thus, firm expects AAPL to report EPS ahead of consensus. Firm says iPod nano still a dominant MP3 player, but checks suggest seasonal drop-off in demand compared with very strong Dec Q.
05:31 AAPL Follow-up: EU launches antitrust probe into iTunes - AP (93.65 )
AP reports the European Commission confirmed Tuesday it had opened an antitrust probe into Apple's (AAPL) iTunes and the way it sells music online in coordination with major music companies. The commission alleged that distribution agreements Apple has signed with the record labels to sell their music on the iTunes online stores in EU countries ''contain territorial sales restrictions which violate'' EU competition rules. ''Consumers are thus restricted in their choice of where to buy music and consequently what music is available, and at what price,'' the Commission said in a statement. If found guilty of violating EU competition rules, Apple could face hefty fines, which in theory could total up to 10% of the co's worldwide annual turnover. (See 14:29 comment in yesterday's archive)
05:31 AAPL Follow-up: EU launches antitrust probe into iTunes - AP (93.65 )
AP reports the European Commission confirmed Tuesday it had opened an antitrust probe into Apple's (AAPL) iTunes and the way it sells music online in coordination with major music companies. The commission alleged that distribution agreements Apple has signed with the record labels to sell their music on the iTunes online stores in EU countries ''contain territorial sales restrictions which violate'' EU competition rules. ''Consumers are thus restricted in their choice of where to buy music and consequently what music is available, and at what price,'' the Commission said in a statement. If found guilty of violating EU competition rules, Apple could face hefty fines, which in theory could total up to 10% of the co's worldwide annual turnover. (See 14:29 comment in yesterday's archive)
<the vessel through which media titans incubate new ways to gouge customers for greater and greater amounts>
If you haven't noticed, AAPL is now a "media titan." And stockholders appear to be enjoying every minute of it.
One small step for iTunes is one giant step for Dileet.
"It is happening."
!-)
09:15 AAPL Apple's iPhone will be released on June 11 - CNet's Gadgets Blog (93.75 +0.51) -Update-
CNet columnist writes "Ever since Steve Jobs' keynote at the Macworld Expo in January, we've known that the iPhone is being released sometime in June. But we haven't known exactly when. Now Cingular is confirming that the release date will be June 11. A customer service manager at Cingular (we called 800-947-5096 and were transferred to sales) gave us that date late Thursday, but, alas, said he didn't have any additional information beyond that.
That date is no coincidence. It's the first day of Apple's Worldwide Developers Conference, scheduled to be held in San Francisco from June 11 through June 15. (Incidentally, the agenda includes a focus on Leopard, the next generation of OS X that's supposed to be released sometime in the second quarter of 2007)..."
08:30 AAPL Apple to offer Major League Baseball video highlights on the iTunes store (93.75 )
Co announced that MLB video on iTunes will include a daily 25 minute "MLB.com Daily Rewind" highlight show and two weekly "Games of the Week," featuring full versions of the best games from the National and American Leagues.
08:30 AAPL Apple: iTunes introduces complete my album (93.24 ) -Update-
Co announced a new iTunes service that allows customers to turn their individual tracks into a complete album at a reduced price by giving them a full 99 cent credit for every track they have previously purchased from that album.
When users buy any song on iTunes the corresponding album will immediately appear on their personalized Complete My Album page with the reduced price listed. For example, a user who's already purchased three 99 cent singles and decides to buy the corresponding $9.99 album would be able to download the remaining songs to complete the album for just $7.02, without having to buy the singles again.
07:29 AAPL Apple: Windows-on-Mac tool now works with Vista - Register.com (93.24 -2.22)
Register.com reports that Apple (AAPL) has updated its Boot Camp beta software to support Microsoft's (MSFT) Windows Vista. So much for claims that Mac OS X 10.5 would be delayed to ensure Vista compatibility. The new release, version 1.2, not only adds support for the 32-bit version of Vista, but also implements a number of interesting tweaks, including the ability to use the Apple Remote with Windows. It also adds a Windows system tray icon - the bit down at the bottom right of the screen - to provided quick access to Boot Camp features.
09:54 AAPL Apple: AT&T says 1 mln consumers contacted AT&T for information about iPhone - Reuters (95.50 -0.35)
08:48 AAPL Apple: Leopard delay concerns overdone; checks indicate on time for June Q - AmTech (93.52 )
AmTEch says recently there has been speculation and concern that Mac OS X Leopard will be delayed until Oct. Firm believes these concerns are overdone and believe that Mac OS X Leopard will ship on time in the "Spring" timeframe, or AAPL's June Q.
Their sources indicate that AAPL's latest beta build has made noticeable improvements in stability and functionality from previous builds and that AAPL is likely one or two upcoming builds away from reaching "final candidate" stage to be released for manufacturing.
Firm's checks also indicate that many in the AAPL developer community are hoping that the Mac OS X Leopard is virtual machine technology similar to that offered by Parallels, Inc. that allows seamless operation of Mac OS and Windows simultaneously. If this proves to be the case, they believe this would serve as a major catalyst for Mac sales.
06:48 AAPL Apple: Busting into an Apple TV- Appleinsider.com (93.96 )
AppleInsider.com is reporting the first Apple TV dissection photos have hit the Web, clearly revealing some of the device's internal component suppliers and design wins.
The guys over at TechRestore where quick to the punch on this one, not hesitating to pry the cover from their Apple TV's chassis.
From their photos, both the 1.0GHz Intel (INTC) Pentium M-based "Crofton" central processing unit and NVIDIA (NVDA) G72M graphics chip are visible... Also visible from the photos is a Silicon Image (SIMG) IC and Broadcom (BRCM) chip affixed to Apple TV's 802.11n-enabled wireless card.
07:32 AAPL Apple seeking European iPhone provider?-LoopRumors (93.96 ) -Update-
Looprumors.com is reporting according to an article from The Guardian Apple is courting several European mobile phone companies for its iPhone launch in Europe. The daily British newspaper says that Apple wants to conclude a deal with a single pan-European network for the launch of iPhone in Europe by the end of the year. Vodafone (VOD) is said to be emerging as the front runner for the exclusive distribution of iPhone in Europe.
07:32 AAPL Apple seeking European iPhone provider?-LoopRumors (93.96 ) -Update-
Looprumors.com is reporting according to an article from The Guardian Apple is courting several European mobile phone companies for its iPhone launch in Europe. The daily British newspaper says that Apple wants to conclude a deal with a single pan-European network for the launch of iPhone in Europe by the end of the year. Vodafone (VOD) is said to be emerging as the front runner for the exclusive distribution of iPhone in Europe.
08:19 AAPL Apple reportedly to postpone Leopard to support Windows Vista - digitimes.com (93.96 ) -Update-
Digitimes reports that AAPL is expected to launch its next generation Leopard operating system in April, but according to industry sources, the release of the new OS will be postponed to Oct to allow AAPL to make Leopard support (MSFT) Windows Vista through an integrated version of its Boot Camp software.
The sources pointed out that the launch delay is not due to software design problems with Leopard but instead is attributed to AAPL's plan to have its new OS support Windows Vista through an integrated version of Boot Camp.
If Leopard supports only Windows XP, then the chances of the new OS attracting Windows users to buy an AAPL computer decreases, stated industry observers, noting that with Vista support, AAPL's chances of increasing its share of the PC market would increase.
12:27 AAPL LoopRumors discusses this morning's Piper Jaffray note on Apple TV (89.72 +0.15)
LoopRumors reports PiperJaffray senior analyst Gene Munster believes that the Apple TV media center has a lead of 10 times that of its competitors. There are 110 mln active iTunes users compared to just 12 mln active media center users. The possibility that it will play games and benefit from some of Leopard's 'Top Secret' features both contribute to its unforeseen success.
"We estimate the digital living room market in calendar year 2008 will be $4.7 billion, and we believe the Street is looking for $1.2 billion in Apple TV revenue in calendar year 2008," Munster said. "We are currently modeling for Apple to sell 2 million Apple TV units in calendar year 2007.
For every 500,000 additional units Apple sells, it adds $0.02 to our calendar year 2007 earnings-per-share estimate." Munster is currently modeling for Apple to sell 2 mln Apple TV units in calendar year '07. "For every 500k additional units Apple sells, it adds .02 cents to our CY07 EPS estimates."
<...we need a tool to enable enforcement of some consequence for breaking faith with constituents.>
We have one. It's called elections. Although it's clear the tool is broken because of apathy and indifference, the solution is to address *those* problems and not try -- again -- to interpose and substitute the judgement of some artificial regulatory regime.
Process reforms -- like campaign finance reform -- always fail, and only contribute to cynicism and alienation.
Although I could literally feel the left kness jerk with the Libby verdict, the fact remains that what he did pales in comparison with the corrupting effect of money in poliics.
Cisco, Apple Settle iPhone Dispute
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP February 21, 2007 9:36 p.m.
Cisco Systems Inc. and Apple Inc. said they have resolved their dispute involving the iPhone trademark, which had threatened to derail Apple's use of the product name for its much-hyped new iPod-cellphone gadget.
The companies said they reached an agreement that will allow Apple to use the name in exchange for exploring wide-ranging "interoperability'' between the companies' products in the areas of security, consumer and business communications.
Under the agreement, both companies are free to use the trademark on their products globally and acknowledge the trademark ownership rights that have been granted. Each side will dismiss any pending actions regarding the trademark.
No other details of the agreement were released.
The showdown between the Silicon Valley tech heavyweights erupted last month when Cisco sued Apple in San Francisco federal court claiming that Apple's use of the iPhone name constituted a "willful and malicious'' violation of a trademark that Cisco has owned since 2000.
Cisco markets a phone with the name through its Linksys division. Its iPhone devices make free long-distance calls over the Internet using a technology called voice over Internet protocol, or VoIP.
The lawsuit was filed a day after Apple Chief Executive Steve Jobs unveiled his own company's iPhone, a multimedia device that operates over the cellular network instead of the Internet.
Apple initially called the lawsuit "silly" and argued that it was entitled to use the name because the phones operate over different networks and would not compete with each other.
Negotiations between the companies broke down just hours before Mr. Jobs' unveiling of the product Jan. 9 in San Francisco.
The sticking point apparently was Cisco's demand that in order to use the iPhone name, Apple would have to open up its famously closed products to communicate with some of Cisco's offerings.
--Associated Press contributed to this story.
Write to the Online Journal's editors at
09:37 AAPL Apple to release new operating system sooner than expected - FinancialWire.net (84.30 -0.53) -Update-
FinancialWire.net reports Apple is set to release its Mac OS X 10.5 Leopard as early as the end of March, according to sources. The operating system is touted as an answer to Microsoft's Vista (MSFT), which was introduced on Jan 30. Apple's OS X for MacIntosh PC's was not expected until later in 2007, but development of the system is moving faster than anticipated.
09:32 AAPL Apple: Hi-def Mac Pros at NAB? - Loop Rumors (84.44 -0.39)
Loop Rumors reports "Information is coming in from a reliable source that Apple's next Mac Pro will gain support for a high definition format... Today's information confirms a rumor we brought you in July and cites the ability to burn and play high-definition format discs, although the specific format was not mentioned in this latest tidbit, we are still assuming that since Apple has its hand in the Blu-Ray technology, this optical format will be the most likely candidate... The cryptic information also points to NAB 2007 as the launch date for these new machines (and long overdue Displays)..."
08:42 AAPL Apple: Beatles ready for legal downloading soon - FoxNews.com (84.88 )
FoxNews.com reports the Beatles songs — all of them — will be offered for downloading soon. That's what Neil Aspinall, the head of Apple Corps and the man who's protected the Beatles legacy for the last 40 years — said over the weekend. "All 13 core albums, the ones originally released on CD in 1987, have been remastered," Aspinall said. "At some point they will all be released, probably at the same time."
Now that Aspinall has "won" his longstanding lawsuit with Apple, he says downloaded Beatles songs will be coming soon. The Beatles, sources say (and not Aspinall), may have won royalties on Apple iTunes/iPod hardware as part of the settlement. The settlement didn't address downloading. But now Aspinall says that when the Beatles songs do get put on the Internet officially, "it will be on all the services, not just one."
10:23 AAPL Apple embraces casual gaming - BusinessWeek.com (85.37 -0.81) -Update-
BusinessWeek.com reports as iconic as Apple may be in consumer electronics—from personal computing to digital music and, now, mobile phones—it hasn't exactly set the gaming world on fire. The Mac lags behind competing brands in gaming software. But in recent months,
Apple has shown a new openness to gaming by introducing a spate of titles for its iPod digital music players. The co tapped several game publishers, including Electronic Arts (ERTS) and Namco, to deliver a selection of casual games. Apple's casual gaming foray is unlikely to end with the last version of the iPod.
Apple is discussing games for the iPhone, due to be released in June, with the casual gaming arm of ERTS, BusinessWeek.com has learned. Apple could also release games for Apple TV.
Apple is mum on gaming plans for the iPhone or Apple TV, but Mitch Lasky, senior vice-president of EA Mobile, says his co is discussing plans for games on the phone. "We have been talking to Apple about games on (the iPhone)," Lasky says. "We see a lot of the technology that we've utilized on the iPod side being incorporated into the iPhone."
When you've been in politics long enough, you develop a very highly refined sense of smell. This smells.
05:43 AAPL Pixar pay package to Lasseter included well-timed options - WSJ (86.18 )
The Wall Street Journal reports Steve Jobs helped negotiate an employment contract with a top film director that included a large stock-options grant with an especially well-timed date, according to a person familiar with the matter.
The options grant, part of a 2001 employment contract reached between Pixar and animated-film director John Lasseter, carried the lowest share price of the previous year -- on a date more than three months before the employment contract was actually signed. Mr. Jobs, then Pixar's chairman and chief executive, signed the agreement on behalf of Pixar.
It remains unclear what role, if any, Mr. Jobs played in selecting the prior grant date of the agreement's stock options. The grant is one of several the co awarded at yearly lows, a pattern that has raised questions about whether the Pixar grants were improperly backdated. (DIS)
15:26 AAPL Apple may ax next-gen HDD iPod in favor of all-flash models - AppleInsider (85.93 +1.78) -Update-
AppleInsider reports Apple may begin transitioning its flagship iPod models away from hard disk drive-based storage and towards solid-state NAND flash memory by the end of year.
According to an "IT Hardware" report from Prudential Equity Group analyst Jesse Tortora, the move would pave the way for smaller form factor players, more diverse model mix, and both improved battery life and durability.
The analyst noted that recent history supports the scenario, given the economics of a similar transition where Apple in late 2005 decided to move from the 1-inch hard drive based iPod mini to the NAND flash based iPod nano...
(Briefing.com note: The Prudential note referenced in the story was originally released the morning of Feb. 5)
11:52 AAPL Apple announcement this month? - LoopRumors.com (84.62 +0.47) -Update-
LoopRumors.com reports very reliable sources are saying that Apple will be making an announcement this month. The nature of the announcement is not yet known, but the rumors around the net point to one of two things: A Beatles announcement, or a new wide-touch-screen video iPod.
LoopRumors' sources are 'very confident' that Apple will make an announcement this month. LoopRumors mentioned that Apple is readying a Special Event either late this month or early March. This new information suggests that Apple will make the announcement sooner than later.
Information trickled in after Steve Jobs's keynote that there were other products to be announced, but didn't want to steal the limelight from the iPhone or AppleTV. LoopRumors reported that Apple was working on several other devices and expect a few of these to be introduced this year. Steve Jobs has already gone on record saying this will be the most exciting new product year in Apple's history.
05:47 AAPL Jobs's new tune raises pressure on music firms - WSJ (84.15 )
The Wall Street Journal reports in an 1,800-word essay, Apple's (AAPL) chief executive Steve Jobs said the world's major music cos should consider allowing Apple and others to sell songs unfettered by anticopying software that prevents them from being shared or played however a consumer chooses.
While Mr. Jobs is positioning his proposal as a consumer-friendly step, it isn't clear whether the biggest music cos -- Warner Music Group (WMG), EMI Group, Vivendi's Universal Music Group, and Sony BMG, the joint venture of Sony (SNE) and Bertelsmann -- will embrace his recommendation.
Allowing online music sales without anticopying software would amount to a radical about-face for the recording industry, which several years ago viewed the technology as a remedy to rampant online piracy through file-sharing networks like the original Napster (NAPS) and Kazaa.
Music heavyweights have long required Apple and others to use the technology -- known as digital-rights mgmt software -- if they wish to sell their songs online.
08:11 AAPL Apple: Piper comments on Steve Jobs' "Thoughts On Music" letter (84.15 ) -Update-
Piper Jaffray notes that yesterday, AAPL's Steve Jobs released an open letter, "Thoughts On Music," on Apple's website in response to concerns that have arisen in European countries regarding the DRM (Digital Rights Management) system, FairPlay, that Apple uses to protect music downloaded on the iTunes store.
The firm thinks there is <25% chance that the music industry will license music to online stores without any DRM. Firm notes that if consumers choose a service other than iTunes to download music from is somewhat inconsequential to Apple if iPod sales increase.
They say the reason for this is that iPods are significantly more profitable to Apple than iTunes; iPod (35% of sales) gross margins are in the 30% range while iTunes (5% of sales) gross margins are in the 5%-10% range.
15:10 AAPL Apple: More from Steve Jobs' "Thoughts on Music" letter (84.24 +0.30) -Update-
"... Much of the concern over DRM systems has arisen in European countries. Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free. For Europeans, two and a half of the big four music companies are located right in their backyard. The largest, Universal, is 100% owned by Vivendi, a French company. EMI is a British company, and Sony BMG is 50% owned by Bertelsmann, a German company. Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly."