Comments on: Is Real's 'hacking' of iPod legal?

Underground code-crackers risk fines and prison time. But ordinary corporate reverse engineering is a very different thing.

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i thought apple didn't make much from itunes?

my first post didn't seem to work...

I thought they didn't make much money (if any)from actual itunes sales. It is all in the hardware sales. Wouldn't it benefit apple to allow more music formats to work on the ipod so they sell more?

iTunes profitability & vertical integration

I've read analysts' reports that Apple makes about 10 cents gross profit on each iTunes song -- after paying royalties, credit card processing fees, and so on. Their 100 millionth song marked about $10 million gross profit -- as you say, not great.

Paid U.S. song downloads are running around 2.4 million titles per week.

By comparison, roughly 307.5 million CDs were sold in the U.S. in the first half of 2004 -- in other words, about 150 million songs per week on physical CDs, more than 60 times the download rate.

Currently, Apple "controls" about 70% of the download market, which sounds impressive, but amounts to a little over 1% of the entire U.S. music sales, and receives only 10% of that revenue stream.... There's lots of room for them to grow that share.

iPods are more profitable, but competitive pressures have already forced Apple to reduce prices on iPods by 20% or more. Sony's plans to enter the market this fall will likely compress iPod's margins further.

Steve Jobs' gameplan here -- as it was with Lisa, Macintosh, NeXT -- is a vertically integrated monopoly in which Apple controls distribution (iTunes) and the player technology (iPod)... and keeps out competitors. In order for this to succeed, he MUST keep out competitors at all costs.

However, the entertainment industry is far too big (and lucrative) for this strategy to work for long, just as it failed Apple with the Macintosh. Too many big companies -- from Sony to Microsoft to Wal-Mart -- and littler guys, like RealNetworks -- will join the fray. This will severely compress what little margin Apple has, and limit the amount of market share they can grab for themselves.

[Orion Blastar]

No, Apple wants a monopoly

where they control the audio formats used in the iPod so that only music bought from iTunes can be used.

All the more reason for me to boycott Apple and sales of the iPod and the iTunes service.

[kxmmxk]

corporations and the law

So basically, according to this article, it's okay for corporations to break copyright protection, just not individuals. Why does that not surprise me??

We all must be punished to make sure a few can't 'steal' the goods, but corps can steal whatever they want!!!!

corporations vs individuals

It's not really that. As an individual, you have the same right that RealNetworks has.

The issue is instead the intent: Are you breaking the cipher with the intent of copying music or videos illegally, or allowing others to do so? Or, instead, is your intent to allow licensed media to be downloaded, stored, and played, within the scope of the license, on an existing player?

After all, its the record labels and the musicians who own the copyrights -- not Apple. The labels and musicians license their material and want to get the broadest distribution while still getting paid royalties for it. They'll come down squarely on RealNetworks' side -- and they'd come down on your side, too, if you tried to build a better iPod by reverse-engineering Apple's.

[unknown unknown]

I am not a big fan of Real but I do support their actions.

<EOM>

Apple reverse engineering adobes api's

Worth noting, Apple has reverese engineered Apples Photoshop and After Effects plugin Api's in order to take advantage of the massive Adobe plugin market in its own applications.

Adobe does not licence its Api's out - so apple has been doing the same thing to the vendors for a long time in order to take advantage of market share that Real is now doing to them...

What would happen if Adobe were to launch a class action suit against Apple? it would cripple apples DCC products since the users rely on plugins more and more in what is becoming a commoditized industry (DCC applications)

go Real!