Will Apple's control issues hurt the company?

Will Apple’s control issues hurt the company?

No, but you will say it does, but then who listens to any advice about Apple from any Fortune writer.

They also predicted the stock wouldn't do so good either and we know that's not the case.

It is always interesting to see how people just come out and defend their flavor of religion no matter what, and that is indeed the case here as well. The fact is that all attempts at controlling access and methodologies are to be considered CLOSED architectures, regardless of whether the end result is a better user experience or a better product. We can argue one issue without having to argue the other. So, most of us agree that being closed is just fine, as long as the user experience is superior to that of an 'open' system.

FACT, all these providers, from the ones developing hardware, to those writing the software, to those selling content, to those bundling it all together under a service are FOR PROFIT BUSINESSES, so to argue that one is better than the other without considering the fact that the main incentive of all these business is to return the most money to its shareholders is simply in dilusion.

The real argument then is one who provides the best experience, and that has an easy answer, even for those that don't particularly drink the Apple koolaid … Apple does have the best user experience, period.

iTunes is not even the best written piece of software, from a technical perspective, but it is friendly enough, and it is accessible enough, but more importantly, it is well integrated with the entire experience of owning an iPod, synchronizing your own content, or accessing content from iTunes. It just works, and it works well.

Yet that is not even the actual differentiator. What made the Apple the company that it is? SIMPLICITY. They made an interface that used to have about 9 buttons into one that has ONE wheel, and with that level of simplicity they took the market by storm. I no longer need to look at the damn player to make sure I have it pointing in the rigth direction so that my touch feel memory would push FFWD or FRWD correctly, or that the small PAUSE button wouldn't be pressed instead of the PLAY button. THAT is what defined Apple's success in the portable music space, nothing more and nothing less.

This same experience is now being brought into the iPhone. Try to save a contact with your smart phone and you learn how many damn clicks and menus you have to go through before you can actually save the contact. Or try to dial a number that happens to be hyperlinked in your internet connection. THAT is what Apple has done so well and THAT is what Microsoft and all others have failed miserably at.

There is an interesting story out there about Bill Gate's getting a preview of the Apple TV a few years back. When he save that Apple's remote control for the Apple TV he questioned how it was possible that it only had 3 buttons versus the 35 buttons or so that the Media Player remote control that Microsoft developed uses. Apparently the product manager for Media Player said … "Well, ours can do a lot more."

That's is just techno-geek talk. Sure, it can do more, perhaps, but it doesn't do it well, and it doesn't do it in a way that makes it stick with the consumer. That is again why Apple is winning this.

To end this email, one has to remember that a Mac is now the only 'PC' that can be both a MAC and a Windows machine, so much for being closed right?

All of this is coming courtesy from a guy that has been using Microsoft products since the days of DOS, so don't think I am an Apple fanboy. They simply have the better interface and that just cannot be denied.

I stole my iPod.

I steal music.

I have a bootleg version of Windows XP.

I steal videos.

I see no problem here.

Music companies have been smarting over pricing ever since they got caught colluding with each other over price fixing in the late 90s. 99¢ is a great selling price for a product that is clearly overpriced to begin with. If music companies had their way, single downloads would cost $2.99 and whole album downloads would cost $18.99. This would be pricing in a Microsoft-operated world.

All Microsoft is closed system stuff. Apple is more open-source than Microsoft. Also, how can you even compare a social online network (facebook) with Apple (a tech company). Comparing Facebook and Apple is like comparing mensa (social intecllectual organization) with bechtel (one of the largest, if not the largest, engineers firm in the world). It just does not make sense to compare facebook and Apple, also, it is a company, not unicef, would everyone stop moping they got a free iphone or would people still give apple crap?

It is funny how the "bully" or Apple is still being supported by helpless companies. This seems similar to the elementary school bullying. So what? Apple will just continue taking controls since there is no "teacher" other wise higher power to stop it. Too bad…

APPLE NEEDS TO IMPROVE QUALITY

Computers and MP3 players are becoming more like cars everyday. They all move and get you from point A to B. As time goes by you want a car that is designed well, reliable, and fun. Same goes with the MP3 player and computers. This is why I for one will be switching to a MAC and purchasing my 8th iPod (purchased many for family members). It is not enough for things to work and run they must work and run with style…… Steve Jobs has done a good job but with that being said the best day of his life was yesterday he must continue to improve Apples products and user experience. Recent history has shown that Apple does this best……

Apple has won the consumers(us) hearts and minds by creating innovative and practical products. No other Co. has ever achieved the level of consumer satisfaction Apple enjoys, and for good reason.

Apple has certain control over its products to create and maintain a very simple user experience which is the foundation of this company. We don't want to go the Ctrl+Alt+Del=Reboot way now do we?

Ya don't mess with success.

Apple makes beautiful products, albeit expensive ones. I'm not a Mac owner, but as a long-time iPod owner I appreciate their business model, and the iPhone is a thing of beauty.

As for record label execs who think $0.99 isn't enough? To hell with them, the greedy idiots.

You wrote: "Apple has done plenty on its own to act the part. At a time when the rest of Silicon Valley, led by Google (GOOG) and Facebook, is building “open” technology playgrounds that encourage outsiders to invent new business models, Apple CEO Steve Jobs has not really played along."

You do know that those are both software companies, right? So the equivalent "openness" to Google or Facebook would be allowing 3rd parties to, say, create plug-ins for Safari or iTunes. Which, remarkably, they can do. Allowing them to create applications for, say, the Macintosh is a much higher level of this type of "openness" than either Google or Facebook is even capable of allowing.

More succinctly, neither Google nor Facebook makes any devices, so comparison to Apple is strained at best.

A few points:

1) Steve does not care about market share. He only cares about creating excellence…and protecting it (closed systems). As an avid Apple user, I actually appreciate that (just spend 5 minutes with an iPhone and you'll be praying that no one who doesn't know what they are doing will mess with that).

2) One of the laws of branding/positioning is whoever gets there first, wins. Microsoft and Amazon are too late. iPods, iPhones, anything "i" is cooler, shortcomings notwithstanding.

3) Microsoft could care less about developers and playing by the rules. Case-in-point: Internet "Exploder." As a full-time web developer, I've exprienced first-hand Microsoft's unwillingness to adhere to W3 Consortion standards, which has cost me and my clients thousands of hours of frustration trying to make the world's 800-pound browser play nicely with the World Wide Web.

4. Yes, I've heard all the stories of Steve's pomposity, but it really doesn't affect my positive experiences with the wonderful products his vision has inspired.

"Jobs says he wants prices uniform at 99 cents per song to preserve simplicity; record labels suspect he just wants to keep prices low so Apple sells more iPods."

The record labels are staffed by greedy morons. Jobs wants to keep prices low so people will actually BUY the music, instead of just downloading it illegally. If the labels force Apple to jack up the prices, you'll see sales drop off. And how many of those variable-pricing online music stores have come and gone? Plenty.

They just don't get it, and never will.

One expression comes to mind when reading the various comments posted, and that would be. "The cream always rises to the top". Who woulda thunk… Apple in the drivers seat? To all those who think that they are headed for a fall, I would look at what they've accomplished since Jobs regained the helm and compare that to what the other hardware, software, and electronics Co's have done during the same period. And now the iphone??? All but the deaf, dumb, and blind investors should be jumping on the Apple choo choo train at $175. Then again, what do I know I bought at $13.

What a buncha whiners. All of these companies complaining are used to being the bullies. They gained their power by throwing their weight around and only cared about profits. Apple is now leading the industry by utilizing a totally different angle. Their goal is to please the consumer and make quality products. They realize that a happy consumer is a spending consumer, which means more money and influence for Apple. And instead of just squatting on one success, Apple is doing a great job of convincing their customers to buy other products that they make.

Dinosaurs like Microsoft and Sony and the various record companies can't grasp this. They've never conducted business in this manner so they cry foul. And because they've never followed this business model, they think they can crack into the industry with a buncha me-too products.

It amazes me how people are now talking about Apple like it was some giant back when it released the original iPod. Apple had no clout at all. Their success was 100% a result of consumer choice. And they didn't go out and do what everybody else was doing. They created their own unique products that consumer were curious about.

To those who say the iPhone is closed tell me what other phone OPENLY lets you install anything besides what the WIRELESS carrier lets you? None. Other phones can be hacked, so has the iPhone. Other phones (Razor as one) get introduced soley to one carrier and later all carriers have access. The iPhone is controversial in its "lack" of openness because it is the first phone the CONSUMER wanted. Now they want more, not saying it is a bad thing but these complaining execs want to use you.

As to content I don't trust the recording industry or Hollywood. Movies prices at the theater, for rent or to buy have only gone up. A new distribution model has come around which will greatly reduce distribution costs and they want to charge the same price? Sorry, don't buy it. If you look at the economics behind it you will find it proves it as well.

Any digital distribution model must do the following: work easily to play it back, be flexible in where it can be played and be priced right. These execs just assume the only reason iTunes and Apple are so successful if because of the price. They are so wrong. Play with the price and the whole model could fall apart. Digital movies/TV are not at a mass level yet and even the iPod is not at a truly mass level (think one in EVERY home or 99% of homes). The foundation still needs to firm up before these execs can mess with the model.

Jobs has, perhaps inadvertantly, aligned himself with media content consumers by demanding a simple pricing structure. Less expensive media content seems to drive media playback device sales and the consumer benefits from the lower pricing. What the media companies don't seem to understand is that the online pricing is not so much the intrinsic value of the content itself but the value of the convenience of accessing the content online.

The are ready substitutes, which will tend to put downward pressure on online pricing. Ignoring illegal downloads for now, although they are a significant consideration, one might purchase content from a media content outlet at prices which undercut Apple's pricing by a considerable margin and transfer the content to a media player. More than 95% of the music on my iPhone falls into this category. If you have cable or satellite service, it programming can readily captured and converted to a format, without DRM, playable on a media player at cost which can be quickly recouped through media content savings.

TV programming must be sold at an attractive price on-line or the opportunity cost of capturing and converting TV programming is overcome by the price of the on-line media content. Said another way, most TV programming, which includes movies as well, can be obtained for near-zero marginal cost for many consumers. How much is the time saved, by having the content available on-line, really worth?

Media content owners make nothing from piracy. And lose even more in good will from anti-piracy campaigns. Apple created an alternative to piracy, and the media content owners are now receiving a stream of revenue from on-line content. As all good businesses should, they are seeking to increase revenue. I don't believe increasing prices of on-line content are the answer.

I do believe Apple is a threat to the media content owners, but on an entirely different front. Media content creators, the artists, will be able to establish relationships directly with the media content outlets, such as iTunes bypassing, what are now the Media content owners, replacing the real "robber barons" of today with more agreeable ones.

You'll forgive me if I take anything that record company execs say with a grain of salt. For forever they have had control over distribution and pricing of their products, and they fought tooth and nail to defend their business model until given literally no other choice. Yet here they are railing against Apple doing the same thing, only now they are the ones at the wrong end.

Listen to the babies cry. Their monopolies did not serve them well in the face of a design philosophy that puts the user experience first and foremost. If Apple's popularity is really a result of some imaginary Jobsian hegemony, then why aren't Apple's competitors, with their actual monopolies, able to compete on a level playing field?

Quit whining, grasp the concept of competition and a true open market and try to make a better product. If you can't do that, shut your mouth and get out of the game.

Look at a similar but different market: books. Years ago, I downloaded some books to read on my Palm. I liked the format and convenience.

Unfortunately, new books were often priced at hard cover prices and always equal or higher than paperbacks despite the lack of packaging and shipping.

This market continues to be priced in this manner. It has gone no where despite improved hardware and increased broadband usage that can download a book in a few minutes.

Put reasonably priced books on iTunes (slightly less than paperbacks) for reading on computer / iPhone / iPod Touch and the market will be much more likely to take off.

To see how open the iPhone is even before the SDK release scheduled for February check this out:

http://www.apple.com/downloads/macosx/productivity_tools/remotebuddy.html

It's developed using AJAX. It can run and control iTunes, Front Row, EyeTV, DVD Player, Quicktime, and more. You can even use your iPhone to view the live video on your Mac's built-in camera!

It's the perfect remote control for your Mac.

Try doing that on any other "open" Smart Phone.

Check out the Web Apps section in the iPhone tab for more Web applications. Files2Phones, iRibbit, IM+ for Skype, RDM+ (lets you control your PC), Bank of America Banking, …

Sounds like another media company shill talking. It is the record labels that need to stop being control freaks. The fact that their lucrative and, now, completely irrelevant, business model is threatened is the reason this article is written. Media companies should be put out of their misery so we don't have to listen to their constant whining.

Apple is not the bad guy!!! Record companies bitch about piracy, Apple provides the first truly viable, economic recourse to "illegal" downloading and now the record companies are bitching that Apple is keeping them from jacking prices. Sorry Record companies! If the price goes over $.99 folks are gonna go right back to ripping their friends CDs or using P2P clients to get their music. Ditto for TV shows. If the price goes up, folks are going back to downloading. Suck it up and be happy! You are getting the lion's share of the money anyway, stop being greedy and let it rest!

The one area where Apple perhaps should open things up is in allowing other media players to play iTunes purchased tracks and quicktime videos.

Apple spent 2 years developing the iPhone which is essentially a portable computer.

How is it that they didn't foresee customers wanting to be able to develop and run their own applications on this device??

If you ask me, looks like steve jobs is human afterall. This would have to be one of their biggest stuff-ups of all time.

I’ve wandered into the twilight zone! Or Apple is finally winning hearts and minds across a broad spectrum. Most of the comments I would have made as a long time player/fan/critic of the music business (going back to 1969) and the computer business (1975-) have been made for me.

For those complaining about the ‘closed’ nature of the iPhone or tying to a single, apparently lame carrier (at least in the case of ATT and O2), given Apple’s (and Job’s) history there is really only one explanation (short of a brain tumour).

Historically, despite catcalls, Apple have been a very ‘open’ company, though always proprietary. Starting with the Apple ][ in 1977 Apple introduced the first commercial ‘plug-n-play’ system for add-on boards. Anybody could build a board, put drivers on the board itself in a small rom, and the end-user could integrate the board in a common manner for all add-ons. It took the Intel world another 20 years to gain this capability.

Most important, the documentation has always been there, even in an age where this was almost unique. With iTunes, although the music must be downloaded with DRM, Apple negotiated an easy, and legal, means to bypass this by flexible usage on more than one platform, and by letting the customer to burn these to CD, where they could be ripped back to MP3. They were not the inspiration for the DRM, and would obviously love to sell more music (it’s fairly easy to integrate most non-windows specific MP3 players into the local iTunes software).

The iPhone is the first departure from this pattern. Apple is a business and must make money, but Apple consistently has packaged up (and occasionally invented) the state of the art for people without a great deal of technical skill or interest. Apple focuses on the creation of capabilities together with an environment within which to deploy these capabilities which makes sense to people.

Apple needed to break into the phone business to build the foundation for ubiquitous computing for everyone, rather than waiting for the day when we have yet another satellite cloud orbiting the earth (and you think that phone companies are brittle and greedy – try satellites). The phone business is tedious squared with respect to hassle, tying, restrictions and greed. Apple needs leverage to change this, so they chose weak giants like ATT and O2. The phone industry needs reform, and I expect in a year or so we’ll have a parade of CEOs of phone companies complaining about how Apple destroyed the phone industry.

As far as ‘closed’ development, I think there are two basic issues there. One was a bit of caution … this was new and they needed to develop some legs before officially supporting 3rd party development. The majority of phone users make neophyte computer users look like sophisticates. A terrible security disaster, phone-jackings etc. would have been an immediate death knell for a company many were predicting and hoping would fail. The second reason would be more characteristic. Just as Apple jettisoned the floppy disk and then the modem, Apple is driving the capabilities/potential of web x.0. The iPhone is a platform for ubiquitous persistent network access, and in an ubiquitous world applications and data should be amalgamated. Local applications are on the road to antiquity, and a lot of developers need a wake up call. True there needs to be a bit more local capability to create some applications, but for the most part when developers say they can’t do X or Y, what they really mean is that they don’t know how to do X or Y.

There is already a huge web-services framework in place with lots of real-world knowledge and expertise so deployed fairly cheaply. What is needed is a framework for building applications based on these services, and this is the trajectory of the iPhone. They aren’t kidding whey they say, “Oh, and its also a phone”.

Now, not everyone wants to play (and pay for) a role in inventing the future, and they can certainly be served today by others, especially Nokia, who seem to have some nous about them. But watch Apple’s trajectory.

OK. So let`s say Apple opened up the iPhone. Now, imagine how the list of functions on the iPhone would read: Function might work with all carriers. Func. B will work with carrier A,D & F. I WON`t work with carrier B. Your iPhone might explode if this fnction is used with carrier C& E !

I would guess to say, that the iPhone might never have made it to market or would have been hobbled like so many other `open` phones already out there. Get off it people ! Buy and Like It or DON`T BUY IT !

I think a lot of good points were made in all of the comments. My question is this… why hasn't Microsoft tried to break iTunes in Windows? If I was Microsoft I would do whatever I could to mess up iTunes and make a player that worked properly under my own name. I wonder if the anti-trust decision bars them from any kind of practice like that. I wonder if things had turned out differently if that is exactly what Microsoft would try to do. Anyway, it is interesting to think about.

Well, now that I have thought about it, it makes sense because MS makes its money on Office and Windows, not portable media players. Now that the Zune is here, is there any reason to think that MS may not try something like breaking iTunes out of desperation? It's probably a long way off, but I would keep an eye on that one.

As for the for topic at hand, I have never used an illegal download service… and I am very happy with iTunes and its simple pricing model. Album pricing fluctuates, just not the songs. The 99¢ song is all about marketing. The real money is in the albums, videos, etc.

Apple used to enjoy its niche and kind of fly under the radar. No more… but rival companies would do well to watch what they say about Apple. As an Apple user I will not hesitate to choose another brand over one that bashes Apple. Sure Steve Jobs can be difficult… but disrespect Apple products, and they disrespect me.

These comments on here are all pretty much right on the money…It drives me nuts when you see what the record companies make off with 99 cent tracks and TV companies like NBC…COME ON!!! Purchasing TV shows via iTunes for use on my computer, AppleTV, and iPod/iPhone allow me to watch shows and not spend the time converting it to a size and format for each specific machine…it doesnt stop me from purchasing DVD seasons of shows so its added money in their pockets…Plus consumers made the iPod and iTunes what it is…great products WE purchased and made into a market leader – its not like we didnt have a choice. We purchased the best product on the market and that was what Apple made. Now we have to punish Apple for providing us with great products and software! Give me a break! People are pissed off because Apple has taken away their right to rip us off…they arent pissed at the money they are making off of us they are pissed because they feel they could have made more. But I dont purchased an iPod/iPhone for the content on iTunes. I purchase them because they are great products, most of the content I have running on them are items I purchased through regular means (CD/DVD, etc.) Glad to see other consumers arent being fooled by this FUD…

Sony Open that's just hilarious!!!

You must be joking.

Microsoft partners well? That's even funnier!!

I guess you would have to ask Apple, IBM, Sun, Adobe, Plays-For-Sure partners etc., etc., etc. the list goes on & on of companies that have partnered with MS and have been screwed. Who exactly do they partner well with? Look up the definition of partner. MS likes to use the word partner…but all any one has to do is check the history of MS partnerships to see it's all smoke and mirrors.

I explored the open vs. closed arguement in:

"Motorola: Apple won’t open the iPhone"

http://counternotions.com/2007/10/25/motorola-on-iphone/

"At the end of the day, the success of a product is contingent not upon its ‘openness’ but the degree to which it provides utility and delight to its customers."

I'll gladly pay 99 cents for a song, and insist that my son does the same. But I don't know one other person who does the same, opting for illegal downloads on the internet. In my son's class they discussed copyright issues and who paid for songs versus illegally downloading, and only my son and his teacher paid for their songs. So the problem isn't really Apple's 99 cents per song…it will continue to be how many people don't pay for songs. Is that because 99 cents is too much for most people? Is it because a lot of people won't pay for what they can get for free? Or is it a backlash against greedy music companies and musicians? Maybe some of each, but don't blame Apple undercharging.

"Apple was founded before Microsoft."

Immaterial to the article, but still untrue. Microsoft was founded in 1975. Apple was founded in 1976.

What are all these companies thinking? Everything should be open source and free, and nobody should be making a profit. Too greedy. time to send all the big corps out!

Jeff Zucker is an idiot. $9.99 per alblum without all the nonsense packaging? How can they be giving it away when you can buy CD's for 11.99 with the packaging? How much does he think we want to pay for music?

Stock crisis to some degree involves Apples approach to providing cheaper and better technology for the masses. When someone innovates the leaches come crawling out to knaw at the hand that feeds them. Microsoft, Sony and the former AT&T where considered monopolistic in their technologies because others couldn't compete with a team that led the construction of our future and economy.

Open software and hardware is shooting for advertising dollars even charity to compensate for real revenue. Don't be fooled America we are purchasing our own lower dollar best-valued products that hurt our economy (at least the corporation that would make more money by robbing you for their advertising, distribution, points, commision and lets not forget hidden costs).

This is a new era of busines and marketing those that can't compete complain and sue the biggest winner. Apple was the underdog and was considered dead in late 90s. Look at them now with patents that should cover them over any competitor iphone wannabe. Would an innovative patent be considered a monopoly?

Maybe Al Gore lobbied better that we expected for Apple.

I would have thought that Jobs had learned his lesson in the 80's. If Jobs had opened the Apple architecture earlier than he did, nobody would know Bill Gates name. I remember going to software stores and having 5 rows of Microsoft compatable software and about 1/2 a row of Apple software. I can understand the concern about controlling the experience from start to finish but at some point you have to open up and let the rest of the world in or lose your share of the market. Gates and Jobs want complete domination of the marketplace and my money rests on Gates unless Jobs changes his ways.

Not only Memory Stick…

Apple invented FireWire and allowed manufactures to use this "proprietary" connection under the IEEE 1394 standard and go around the FireWire licence.

Who was it that renamed that standard as "i.Link" and I'm sure charges manufactures to use that name?

Given that Amazon sells a superior digital product at a lower price, it's hard to justify the claim that Apple prices iTumes downloads 'too cheaply to drive iPod sales'. If you want it cheap (and usable on your iPod with no restrictions) go to Amazon. How exactly does that drive iPod sales?

I just listened to a podcast New Yorker interview with NBC's Jeff Zucker (downloaded for free from iTunes).

When he says that Apple has destroyed the music business in terms of pricing (which he discusses in the interview), it's clear what he means: Jobs' insistence on keeping the price of music low prevents content-providers (like NBC when it comes to video) from making as much money as they'd like. Zucker gripes that Jobs was essentially using NBC's content (which he said accounted for 40% of iTunes downloads) to sell iPods, and he wants some of that money.

Amazon sells DRM-free songs, for $0.89-0.99. You do not pay taxes, you can play them anywhere and – moreover – all songs get saved in iTunes automatically!

Apple is still trying to maintain leadership, but iTunes Plus is way too expensive to attract my money.

As long as 4/5 portable music devices sold are iPods and the iPhone sells like hotcakes, it doesn't really matter what the other whiners (NBC, Sony, Nokia, Motorola et al) say. At the end of the day, it's the customer who holds the cash (or the plastic as is more often the case today).

If Sony and the others can make a device that's half as user-friendly as the iPod or the iPhone then maybe they'll have some business talking as they are.

This is just plain silly. Microsoft and Sony are good partners? I am pretty sure that none of MSFT's former Plays4Sure partners, nor MTV's now failed URGE people think so… I am also pretty sure that Sony's insistence on pushing their proprietary ATRAC3 format (now dead anywhere but in Japan) causes much endearment for Sony as being a good partner.

The iPod is about as open as it gets. Plays MP3 and AAC – both open formats. iTunes allows any music, including DRM'd songs downloaded from the store, to be burned to CDs which can be played anywhere.

This is certainly a FUD campaign by several of the losers in the competition which Apple has clearly dominated. And it certainly is silly.

Frankly the big media companies are getting greedy here. Apple does the encoding and distribution of the content which the corporations provide it. Therefore those corporations, quite simply, have an avenue for distribution they didn't have before at little to no additional overhead. Whether it be music or video I find Apple's prices to be right where I am willing to pay for them.It seems to me that Apple is fighting more for the consumer here. And if you look at earlier interviews with Steve Jobs when the iTunes Store first went online, he griped about DRM and low bitrates himself, but relayed that Apple relented to those demands by the labels. Don't think Apple isn't fighting high prices, or inflating them. Apple's keeping them right where they should be. As much as I like NBC's more recent shows (and those of its subsidiaries) I only watch and buy American TV from iTunes now. I've bought over $1600 in TV from iTunes, and NBC is out the money I would have spent on their shows had they stayed with iTunes.

based on history, all companies bullied the rest around when they had the means to do so while the rest complained about it. Jobs got the means now and is doing the same so more kudos to him. Instead of complaining the rest should come up with more ideas on how to offer similar or better experiences and Jobs will give in… Till then he is doing what's right for his company.

Wow, now fan boys are screaming that you can buy DRM free from iTunes. I see all of you have forgotten all the events that preluded Apple's amazing DRM free move: The talk of legal action in the EU against iTunes locking people into the iPod and other DRM free offers in the market. Without either of those two incidents, Apple would have no reason to offer DRM free.

iTunes not the iPod is proprietery. I can buy a DVD and play in any DVD player. Yet I was not (until recently) able to buy music from iTunes and play on any player.

Apple is great, but do not mistake them for a savior. At the end of the day they are a corporation, trying to make a profit.

Screw the big labels. And screw the morons at NBC. Especially Jeff Zucker.

"Apple destroyed the music industry in terms of pricing." This goes up there as one of the most retarded quotes of all time. Apple started a freaking revolution with digital downloading. Earth to big labels: people don't want CDs anymore. They want clean, great-sounding digital files that they can put on their iPod, maybe burn a CD for their friend, without this DRM crap forced on them by iTunes and other music stores. iTunes Plus is the way of the future.

To all record execs; follow the money. And it's coming from iTunes Plus.

Two comments:

First, Apple seems to have got it right with the IPod and ITunes. It's relatively simple and easy to use. And you can buy what you want, not the whole, expensive CD. Keep in mind that if the music industry wasn't making a buck with ITunes, their music wouldn't be available.

Second, Sony wants to go proprietary. They had better be careful, lest they repeat the same mistake. Does anyone else remember the BetaMax?

Thanks for bringing up the low cost of selling content on iTunes JT. When NBC complained that they had only made 15 million on TV content I wanted to slap them. They made 15 millionwithout having to do a single thing. Well I guess they had to encode the content. How much did that cost? A couple thousand? The rest is gravy and they have the gaul to complain.

I don't see why anyone would pull content from iTunes. It cost near nothing to get it (and keep it) on there and the money just flows in. The studios can always promoteand support downloading if they want to see more revune from it.

And what's the problem with making your tracks iTunes Plus? CDs are a higher quality with NO drm. There is no more likelyhood that an iTunes Plus track will appear on file sharing than a CD track.

These comapnies need to wake up and start changing their business practices.

The reason people loath their Windows machines is that Microsoft and the hardware people don't control what can and can't go on them, and therefore there are always conflicts that end up making an expensive machine and OS worth nothing. Doesn't anyone take note of the fact that people are willing to pay MORE for Apple products because they're far more reliable and easy to use? Why on earth would I want a $500 windows laptop??

…we have a long history of being a good partner, while Apple unfortunately has kind of proven themselves to be a bit of a bully.” — Jason Reindorp, Microsoft

I wonder how Microsoft's "Plays for sure" partners were feeling when they were abandoned and left in the cold over the closed proprietary MS Zune. Did they feel MS was a "good partner" then?

Bullying? Microsoft wrote the tech industry book on that. Ask any computer manufacturer, etc.. Remember when you had to pay for a Windows copy even if you only wanted buy a Linux-only machine?

I fail to see where all this, "Apple is proprietary," tripe comes from. The Mac is obviously open and so is the iPod.

Case in point, my iPod has about half-a-dozen songs on it from iTunes. The remainder of the 6,000 or so songs come from my CD collection, which I ripped myself and still own, but no longer use, all in a legal manner.

If the iPod was a closed, proprietary system, how could I do this? Wouldn't everything have to come from/through iTunes?

I can purchase all kinds of third-party devices and applications for my Apple products so, again, I ask, how is this proprietary?

Yes, the iPhone is locked to one carrier and currently doesn't support third-party applications. While the one carrier restriction is annoying to some, how else does Apple ensure that everything will work together on everyone else's infrastructure over which they have no control? Also, the iPod model is based on hardware revenue and continuing content revenue. In order maintain their successful business model, Apple had to get a phone company to share the ongoing "content" revenue with them. Wouldn't you think that phone company would want some exclusivity to ensure their continued success with lower margins on the service?

I'm not trying to defend Apple on this one, but I can certainly see the logic in it from both Apple's and AT&T's perspectives.

If Apple is proprietary, they've certainly sold me on the concept!

I'm sorry but to project to the world that Microsoft — a proven monopoly — has a "long history of being a good partner" — is just non-sense of the highest order. Doesn't Fortune's Mr. Fortt remember the testimony of Microsoft's partners in the landmark anti-trust lawsuit? What did the world learn from that?

Answer: Microsoft plays some of the meaness hardball around and regularly bullied companies like Gateway, Sony, and nearly everyone else who shipped Windows PCs.

I think Hollywood needs to get out from under the pixie dust Gates & Co. are sprinkling on their heads or else they will end up like IBM — a company that doesn't make PCs anymore because Microsoft sucked the life-blood of profit out of it all in the name of peddling its moribund Windows OS.

Apple tried "openness" and "sacrificing elegance" in the 80's remember? It almost bankrupted them. That was with the help of the "colored water manager" and his brand of cool-aid. The Apple model is working and the Sony and Microsoft models are not. The MS music is all proprietary and only plays on their Zune. You can only share music for 3 days and IT'S ERASED!!! Where is the "openess" in that? Apple is a great partner with some small companies like Adobe, EA Games, AT&T and Microsoft and don't forget the developers! I won't even mention Boot Camp. iTunes is selling non DRM music for $.99 that you can share as easy as you can a CD. I am not sure what planet Mr. Forrt is on or what he is smoking.

Hmmmm…lets see A-Track? A crappy format Sony tried to push down our throats. To NBC…..I bought the entire Battlestar series from iTunes, since you have decided not to post on iTunes next year then I will simply Bit-Torrent the shows, that I would be HAPPY to purchase, you guys just don't get it…do you? If I cant purchase from iTunes, then YOU have forced me to go another route, so stop your whining and start making deals that work.

HG, Los Angeles, CA Apple was founded before Microsoft.

Wow – very refreshing to see savvy readers post such insightful commentary on this topic. No one's fooled, at least on this side of the fence, even the reporter understood certain answers by execs were PR rubbish. When the smoke clears on the foolishness on the internet, it becomes what it was meant to be, a reference for useful information, and I'm glad FORTUNE is helping.

I have been a lifetime Apple loyalist and worry they are loosing people like me because of their 'lack of open nature'. In point, I would have bought an iPhone in a minute if it was unlocked.

They don't realize that spending $500 on a piece of hardware (phone basically) and telling me I can only use one service provider is what has gotten the cell companies to the their current state of 'non-loyal' customers. Why would Apple join that group.

Everyone other piece of cell phone technology is available without a lock when you pay full price — what the hell is Apple thinking?

Until I see them show more concern for what the consumer wants, not what they say we want, then I will not be buy new Apple products…the ones I have will be just fine for years to come.

It's a matter of things that work versus those that don't.

Obviously consumers will decide and companies like Microsoft, Nokia, et. al., who have already had a 15 to 10 year head start over Apple to 'wow' customers, will have little influence over the matter.

simple take on the whole issue:

1. apple defines blue ocean strategy (read the book)

2. industries and their leaders are mired in their old models and cannot think in a blue ocean mode.

3. this is simply part of the digital transformation of the media industry. apple is leading because no one else can leave their legacy models behind.

4. short term shareholder value eating long term shareholder value potential.

"…we have a long history of being a good partner, while Apple unfortunately has kind of proven themselves to be a bit of a bully.” — Jason Reindorp, Microsoft

Uh, Jason… please remind me again about those charges over which Microsoft was criminally convicted.

If content providers want to "OPEN-NESS" then they should sell their content DRM free on itunes plus. It will play on ALL digitil media players that support ACC (an open standard)

A sure sign that Apple is doing well. They are being attacked on all fronts. The cell phone industry joining forces with Google to make software for cell phones. Nobody seemed to be interested in an alliance until they saw how far behind they are to the iPhone.

The music industry is a mess. Remember the old days when an struggling artist could get discovered by getting a local radio station to play their music? Now days the radio stations are allmost all owned by big business like the clear channel and there is no way that artist will have a remote chance of getting his music played.

The whole business is changing. Artists are tired of getting screwed by the record industry and are looking at alternatives such as Modona recently dumping her record cpmpany and Radio Head trying a different route going all internet based.

The music business can try to blame Apple for their woes, but their troubles go a lot deeper than anything Apple has control over.

I feel sorry for Glasgow he is too close to the technology "the better wave is being open"??? Maybe for geeks like us or enterprise systems but my Mom doesn't give a damn about "open". She cares about stuff that works, is easy to use and easy to get service for. (Take a look at who's been #1 in service the last 7 years in a row…hint it's not Sony) The world is full of CONSUMERS, these tech blogs are full of geeks. Jobs knows his audience this blog shows that the rest of the so called tecno-leaders have not caught on yet!

The only time I legally downloaded music was from iTunes, reason: It's cheap, easy, simple priced and legal. I don't want prices to see doubling again or else I will go (as many will) back to illegal downloading. The big music bosses have still not come into the digital age.

Ok…I work for a record label and the labels net .70-79 per iTunes download multiply that by an album track download – say 10 tracks – that's $7 net to the labels (shave $1 off in royalties…so say $6 net). This is basically the same distributor cost for selling CD'S…but with digital there is no manufacturing cost & you are not stuck w/ over manufacturing and or returns! It's a much better model. These major labels make me sick – they are simply greedy corporations that want even MORE money! Steve Jobs has done more to SAVE the industry than hurt it – Believe me…the public will not pay more than $.99 per download…otherwise they will go back to getting it for free. Remember those days guys?

JT

"NBC Universal chief Jeff Zucker said Apple “destroyed the music business in terms of pricing,”

That quote is the biggest joke – prior to iTunes Music Store, there was NO successful digital music store (i.e. people were not paying for digital music downloads).

How Zucker thinks creating the first successful online music store (training customers to PAY for music instead of download it for free) is ruining the business is beyond comprehension.

I doubt anyone will knock apple of the MP3 player throne but the TV player zone is still wide open that there are some great products out there already that are far better the Apple TV. Xbox 360, linksys media extenders, netgear media extenders and players, Tivo and Amazon (which is the best one IMO) etc… I don't think Apple will win the TV Player war.

Here are a couple of the best self serving quotes I have seen in quite a while…

"Zune marketing director Jason Reindorp says that, in the short-term, Microsoft has decided to sacrifice openness for elegance."

“Apple’s fully proprietary in almost everything they do – they get away with it because they have some great stuff going on,” Glasgow said. “So you can be successful proprietary, but I think the better wave is being open and allowing consumers to make their choice.”

Lets see, Microsoft has elegance…where?

and Sony believes that a proprietary format is not the best choice? This is coming from the memory stick folks, the Sony Connect OnLine store folks, the eReader folks et al…

How much crack do they smoke over there anyway?

I think you have it all wrong. Apple is where it is at because of the control it has from the bottom to the top. They provide a pwerful and clean experience to their customers. Name another software/hardware comapany that is doing that at the same level?

Tom

As a long time Apple product owner and stockholder, I have to wonder if what we are seeing is not Steve Jobs repeating his behavior from the early days of the PC. Let's hope that he isn't destined to repeat the same mistake all over again, thereby devaluing the stock (Ouch!) while erasing the positive gains made as of late. I have not lost faith, however as the saying goes "A leopard (no pun intended) doesn't change it's spots."

Sony of all companies on the planet speaks about beeing open, like the Sony memory stick?

And when it comes to music, if you ask consumers the only robbers in the music business are the record companies, and they call Apple control freaks with all DRM crap, what a joke! If they wan't my money they put their content on iTunes or I else I get them for free, the only loser are the record industry. They are all a bunch of losers!

"Gates told the Zune team to focus on what Microsoft does best" and we all know that that isn't making a great product.