Apple strengthens iPod, iTunes offerings,
reveals living room strategy
Something strange is going on at Apple these days. First there was that un-Job’s like shared performance at WWDC’06, then Apple releases a new high-end 24″ iMac with little fanfare a week before a scheduled press event. Now we have Steve Jobs trotting out on stage wearing a black dress shirt? Where the hell is the black mock turtleneck?!? To top that all off, just to throw us all off, not only did Steve bring back his “one more thing…” encore, which was curiously absent from the WWDC’06 keynote, but he followed that up with “there’s one last thing”! Highly irregular.
Apple has been growing in leaps and bounds over the last 2 years, and I think they are finally starting to embrace the fact that they are a consumer and corporate powerhouse. They’ve got everyone’s attention, so it isn’t necessary to make a big deal out of every product revision. People know what an iMac is, and sure, a 24″ model is an impressive addition to the line-up, along with faster processors, but they don’t need to waste time and effort telling people about it, because people will find out about it just the same. One of the side benefits is that product sales should take less of a hit leading up to major annual events such as MacWorld and WWDC as people come to realize that those events are no longer synonymous with new Macs or iPods. With the fierce pace of new product development going on at Apple, it had to happen sooner or later. More PR time is needed to show off new products, so established product lines can afford to take a back seat from the PR machine.
As for Steve Job’s change in wardrobe, I suspect being on Disney’s board may be influencing him to try new things. Either that or his supplier of mock turtlenecks has discontinued the style. Regardless, my only questions are what took him so long, and would it kill you to try a different colour? Baby steps I suppose. At this rate, we’ll see him in a blue dress shirt in about 4 or 5 years.
Say hello to the new iPods
Yesterday’s announcement was all about Apple’s consumer electronics and media business. Apple took the wraps off upgrades to all three iPod lines, beginning with the top end hard disk based iPod. The new 5.5G iPod, which is available immediately, offers higher capacity on the high end (80GB, up from 60GB) and better battery life for both models. When watching video, Apple claims the 30GB model will provide 3.5 hours of viewing, up from 2, and the 80GB model provides 6.5 hours of viewing time, up from 3 hours–a very welcome improvement for those who felt the previous model’s battery life was anemic for watching videos. A brighter screen, new software features and some useful tweaks to the UI such as a navigation aid that displays the location in the alphabet in translucent letters as you scroll through your music round out this update. The latter feature was seemingly borrowed from the recently leaked details on Microsoft’s yet to launch Zune device. This illustrates one problem Microsoft will have competing with Apple: if they are going to always be behind in getting new features to market, and are unable to keep their details secret, Apple is always going to be able to beat them to the punch.
The biggest news regarding the new 5G iPod has got to be the addition of games that can be purchased and downloaded off of the iTunes music store. Nine titles are available, including classics like Bejeweled, Pac-Man, Tetris, Mahjong and Texas Hold-Em were announced, although more will likely follow. These new games look nothing like the simple games which have shipped on the iPods previously. They are graphically rich and colourful, looking as good or better than the latest mobile phone games. Like the addition of video, the game implementation continues to demonstrate Apple’s ability to add value and functionality to the iPod product line without detracting from the product’s core appeal as a music player. Improvements such as gapless playback, music search and redesigned earbuds are testament to the fact that Apple hasn’t forgotten what people primarily buy iPods for.
While the current generation iPod isn’t going to be a challenger to the Sony PSP or Nintendo DS, it’s clear that Apple is waking up to the commercial potential of mobile gaming. Sony and Nintendo would be wise to keep an eye on Apple’s movements in this space. Sales of games for mobile phones are earmarked to be $2.4 billion USD this year and are expected to reach $7.2 billion a year by 2011. The new iPod game offerings seem intended get a piece of that pie. As the iPod gets more and more power and storage, we may see it become a more serious game platform in the future, and the iTunes Store is a killer distribution model for a video games, given how much of a problem the video game industry has with keeping up with demand of hot titles.
This also marks the first time Apple has allowed third parties, like EA, to write software for the iPod, although they still maintain control over what software makes it onto the iPod via the iTunes Store, for now. The choice to allow the games to play on all 5G iPods indicates that Apple is viewing it more as a new revenue stream and not just a means to sell new iPods, otherwise they could have easily excluded the previous models in order to force owners to upgrade. In fact, with new lower prices of $299 and $399 CDN ($249 and $349 US), it’s not hard to imagine that Apple may be starting to look to the iPod as the razor that will help them sell more media (the razor blades) via the iTunes Store.
The redesigned iPod nano has gone back to the aluminum case design from the old iPod mini, a very welcome change, given how much negative PR Apple got regarding the first generation nano’s tendency to be easily scratching. Unbelievably, the new nano is even thinner than the previous one, while doubling the storage capacity (2,4 and 8GB) and nearly doubling the battery life (from 14 to 24 hours) at the same price points. The new nano also has a brighter screen, text search and letter index display from the 5.5G iPod. In another tribute to the iPod mini, the 2G nano is available in 5 different colours: the 2GB model in silver only, the 4GB model in blue, green, pink or silver, and the 8GB model in black only. All models are available immediately priced at $169, $229 and $299 CDN ($149, $199 and $249 US). There is no doubt in my mind that the 2G iPod nano will be even more successful than it’s predecessors, the 1G nano and iPod mini. Both of which were hugely successful in their time. Apple is doing it’s part by promoting the 2G iPod nano with a new TV, transit, billboard and magazine advertising blitz.
Of all the iPods, the shuffle has gone through the greatest redesign. Like it’s bigger brother, the nano, the shuffle is now clad in aluminum, but has been shrunk to a fraction of the size of the old pack of gum sized model. It’s truly an amazingly small device, which Apple has dubbed the world’s smallest mp3 player. The unit also features a built-in clip for affixing it to clothing. Gone are the built-in USB connector (a step back, from the convenience standpoint, IMHO), which has been replaced by a charging/syncing USB dock which appears to use the headphone jack for connectivity and power. The new shuffle will be available in October in a 1GB model only for $89 CDN ($79 US) and is otherwise feature-identical to the models it replaces. The new shuffle is a major improvement overall from the previous model, but I think it will lose a bit of it’s appeal for those who saw the shuffle as a combination flash thumb drive and mp3 player. Having to carry around the sync/charge cable and dock on long trips makes the new shuffle a little less road warrior friendly, but the smaller size will make up for that somewhat.
iTunes the software, iTunes the store
The second part of yesterday’s announcement focused on an updated version of iTunes software and updates to the iTunes Store. iTunes 7, available as a free download now for Windows and Mac, is a major update with some nice UI tweaks and much wanted features such as gapless playback, support for multiple libraries on multiple hard disks and a “backup to disc” feature. iTunes 7 will also automatically download–for free–any missing artwork for songs in your library, provided you have an iTunes Store account, and the song exists in the iTunes store. This feature alone will be worth the upgrade for a lot of people.
The sources list is now broken up into categories with separate library items for Music, Movies, TV Shows, Podcasts, Audiobooks, etc. There is a Store category which contains iTunes Store, Purchased Music and a new downloads manager. A devices category will display any connected iPods or iTunes compatible phones, and you can now manage all device settings from here instead of having to go into the iTunes preferences. They have even integrated the iPod updater into iTunes, so you no longer have to run a separate utility to update or initialize your iPod, as seen in the picture on the right (click to enlarge).
Two new views have been added, both designed to let you explore your music visually using album art. Album view (top image on the left, click to enlarge) displays each album’s songs next to the album cover, if available, and is pretty much like sorting your list by album, only with the addition of the artwork being displayed to the left side of each album.
The second new view is by far the most impressive feature of iTunes 7, cover flow view (bottom picture on the left, click to enlarge). Cover flow view shows you all your album cover art and allows you to flip through your albums quickly in a fluid 3D animated view that has to be seen to be believed. You can use your mouse scroll wheel, two finger trackpad scrolling or the scroll bar to quickly flip through your entire collection visually. I can see why they added the free artwork download feature. This view mode would be useless if you didn’t have any artwork. Of course those of you who haven’t been bothered to enter artist and album ID3 tags for most of your music are going to have a new reason to want to clean up their music library.
Another new feature that will be much heralded by iPod users is the ability to sync the purchased media on your iPod with more than one authorized computer. Great for keeping the music on your work and home computers up to date, although it appears that Apple hasn’t changed it’s stance on not making music piracy easy since this feature only works with purchased content. All in all, I’m impressed with this new version of iTunes, and I think it’s safe to say it’s one of the biggest updates iTunes has ever seen, helping to ensure iTunes maintains it’s supremacy.
The iTunes Music Store has been re-christened as simply The iTunes Store, finally dropping the term “music” from it’s name, a logical move given they have sold TV shows for nearly a year and the addition of games. Even more logical since yesterday’s announcement of the addition of feature length motion pictures to the iTunes store. No big surprise given Apple’s choice of theme for the event. I think everyone saw this coming, especially after the launch of Amazon’s Unbox movie download service, which I covered in a previous article. As predicted, Apple’s initial offering is limited to Disney owned properties, including Disney, Pixar, Touchstone Pictures and Miramax films.
Steve Jobs was quick to point out that when iTunes launched TV program downloads, they started with only 1 network and 5 shows, but less than a year later they have grown that library to 220 shows on 40 networks. No doubt they will gain support from the other major studios over time. Movies, like TV programs are only available in the US for now, but Apple plans to go international in 2007.
Pricing is pretty much what was predicted, and similar to Amazon’s offering, with the exception of a lower price of $12.99 US for new releases when pre-ordered and during opening week, going up to $14.99 after the first week. Older titles will sell for $9.99 US every day. New releases will go on sale at the same time as the DVD release, which is important if Apple and Disney hope to offer an alternative to DVD. So far Apple has stuck with it’s strategy of only selling content, staying away from the rental model that Amazon Unbox offers. This is a positive for Unbox, as it will likely allow Amazon to stay relevant by differentiating itself in the face of competition from iTunes’ 800lb gorilla.
Apple has also upped the resolution of all video downloads to 640×480 from 320×240, for a 4x increase in resolution. I haven’t been able to nail down exactly what Amazon’s Unbox video resolution is, they say it’s DVD quality, which should mean 720×480, but no one has any exact numbers yet, so the jury is out on whether they have a slight advantage or not. Regardless, the bump in resolution is a welcome improvement. Video now also features “Dolby Surround”, I can only assume that means Dolby Digital, but can’t say for sure. I just feel sorry for anyone who has purchased a lot of video content from the iTunes Store at the lower resolution. No mention was made if those customers will be allowed to download the higher-res version. I wouldn’t hold my breath though. Usage rights is the same as for TV shows and music, 5 computers and an unlimited number of iPods. Like Amazon’s offering, movie purchases cannot be burned to standard DVD video disks, although they can be streamed over a home network and played on a TV connected to any Mac via Mac OS X’s FrontRow interface and Apple remote. But…
…there’s just one last thing.
In usual Apple style, Jobs saved the most interesting announcement for last, although it came in the form of a sneak peak rather than a product announcement. Apple’s final link to the video playback puzzle, the box that will allow you to play your iTunes Store TV and movie purchases on your big screan TV, is a box code named “iTV” which is expected to launch in the first quarter of 2007. Resembling a half-height Mac mini, this box will connect to a TV via HDMI or component video, and has analog and digital optical audio outputs. A built-in power supply means no external transformer to clutter the space behind your home entertainment center. Connectivity comes in the form of ethernet, 802.11 wifi (they didn’t specify which flavor, I suspect this means it may be the upcoming N variety) and a USB 2 port, presumably for hooking up an iPod or maybe an optional optical drive.
The whole thing will operate using the now standard Apple 6-button remote using an on-screen interface similar to FrontRow, although slightly reworked. Steve Jobs demoed it, and it just worked and worked well. The only thing I think that is missing is an optical drive for playing back your content that you’ve backed up to DVD or CD media. The way the device was presented, it required everything to be on your computer. Unless Apple releases some kind of ‘XRaid Home’ media server, this is going to be a pain as it will require you to load the media you want to watch onto one of your Macs or PCs, unless they release a stackable DVD drive option for it that plugs into the USB 2 port. More advanced users will be better off with a Mac mini in their home theatre setup because of the wider support for formats and the ability to play DVDs and media stored on CD and DVD-R. But a lot can happen in 4-6 months, and it’s possible Apple might make changes based on feedback they get. They sort of tied their hands by pre-announcing the price, $299 US, making the iTV a more consumer friendly, lower priced alternative to a Mac mini.
Impressions, MIA
My overall impression of yesterday’s “It’s Showtime†event was that it was a strong update of it’s extremely successful iPod/iTunes business lines, which extends Apple into new territory: feature film and mobile games. The announcement was an even bigger deal from the standpoint of drawing a clearer picture of Apple’s strategy for the next year. If Apple’s midas touch can indeed be applied to these new markets, it’s not hard to imagine them becoming considerable revenue streams going forward, helping to cement Apple’s dominance in digital media even further. It appears the rumors of the decline of the iPod and iTunes store were greatly exaggerated. Apple now has an 88% market share of the legal US download market, up from 82% in May. Apple is the number 5 seller of ALL music in the US, moving up behind the likes of Wal-Mart, Best Buy, Target and Amazon. No small feat, given that Apple only sells digital media online whereas the other 4 resellers on the list still pawn physical CDs.
So what of the widescreen, touch screen iPod and Apple iPhone? Most reputable sources didn’t expect Apple to announce either at yesterday’s event, and the word on the street is we shouldn’t expect to see either until some time next year, if at all. I still have my doubts of whether a touch screen iPod will actually see the light of day, given the tendency of touch screens to attract scratches and fingerprints, but I’m not willing to rule it out completely. I think the iPhone would be a sure-fire hit. There are so many people who are dissatisfied with their cell phone experience, that would gladly ditch it for a mobile phone with the iPod’s industrial design and simplicity. Pressure in the mp3 player market from newer mobile phones with competing capacities to the lower-end iPods will most likely eventually force Apple to enter that space, but not before they are good and ready. The mobile phone market is a fiercely competitive and complex market. If Apple enters it, it will have to be from an aggressive position, not a defensive one, which means they have to make sure they’ve done their homework.
Add comment September 13th, 2006
MacNN today posted a fairly in-depth summary of a new patent application filed by Apple computer with the US Patent and Trademark Office in March 2006 for a “Multi-functional hand-held deviceâ€. This patent makes reference to technologies first identified in previous patent applications for