March 16, 2005 1:34 PM PST
Apple seeks 'tax' on iPod accessories
(continued from previous page)
much as $25 million this year.
"It's free money," he said. "There's no reason that Apple would want to leave that on the table."
Apple could use the added money to increase its already strong iPod marketing. Munster said that $25 million dollars would buy the company roughly 2,500, 30-second cable TV spots. "Apple's key in this is a strong brand, and this gives them extra ammunition," he said.
The iPod has become critical to Apple's business. Last quarter, Apple sold four times as many iPods as it did Macs, propelling the company to its highest ever sales and earnings.
The accessory market also has boomed, with various players estimating the market to be in the hundreds of millions of dollars a year.
One of the challenges for accessory makers in weighing whether to take part in the program is the fact that Apple is not only the maker of the iPod but also one of the largest distribution channels for accessory sales through the Apple online store and retail outlets.
Van Harlingen said that ensuring a presence in Apple's retail and online stores is a factor in wanting to take part in any Apple certification process.
"That's an important part of it," he said. "It's definitely not only a good distribution channel but a good marketing vehicle as well," he said, noting that people often look at a presence in the Apple store as a way to judge which products to buy, even if they buy them somewhere else. Van Harlingen also said that his company has seen interest in the logo program from other retailers eager to use it as a selling point for products that carry the seal.
While the "Made for iPod" program is new, Apple has had a role in the accessory market for some time. Under a previous program, Apple required those who wanted to use either the remote connector at the top of the iPod or the dock connector at the bottom to get their parts from an approved Apple supplier, sources said.
The computer maker also has other logo programs that require developers to meet certain standards, but do not seek royalties. One example is the Mac logo program that software makers can use to show that their products work with Mac OS X.
Microsoft has a similar royalty-free "Designed for Windows XP" program for software that runs on its operating system.
However, there are also programs, particularly in the video game business, that charge for use of both a logo and proprietary connections. An example would be Nintendo's Seal of Quality.
16 commentsJoin the conversation! Add your comment