March 16, 2005 1:34 PM PST

Apple seeks 'tax' on iPod accessories

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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.

Not unprecedented
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.

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16 comments

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Apple going to be the death of themselves...
This is why the Apple computer isn't the dominant brand. In the '90s they wanted to own everything that was in anyway involved with their iMac, Microsoft took advantage of the situation and made more user friendly machines. They're now doing the same thing with the iPod and it will too soon die.

Enjoy it now Apple!! Your iPod won't be sitting high much longer.
Posted by PCCRomeo (432 comments )
Reply Link Flag
Your Post is Totally Inaccurate
"...wanted to own everything that was in anyway involved with their iMac, Microsoft took advantage of the situation and made more user friendly machines. They're now doing the same thing with the iPod and it will too soon die."

Huh? Apple did no such thing with the iMac. There were tons of third party peripherals built for the iMac (still are). And Microsoft makes an OS, not PC's. Your post makes no sense.

Apple has a right to make the rules regarding the use of their trademarks, and since these dollars would be reinvested in marketing, which presumably boosts sales for the iPod line, the entire channel will benefit.
Posted by (274 comments )
Link Flag
learn a little about history okay?
your comments make little sense. the iMac didn't come out until 1998, and it was all standards based, UNLIKE the previous decade of Macs. steve left in 1985, and THAT is the reason the Mac isn't yet dominant. most people use cheap Mac clones, but that is quickly changing. a $499 mac has been a godsend for many people.

the iPod logo/branding is a good idea, but I agree it's a bit steep, more like 5% is plenty. Apple isn't cutting new ground here, but since it basically controls the future of Music Distribution so it can do what it pleases. Thankfully, everyone loves what Apple is doing and I don't see that changing. Apple truly loves to innovate and you can see it through and through with each revision of iPod / iTunes.

a free 10%, not bad money if you can get it, and Apple deserves it for pulling the Recording Industry out of the past. So hopefully this logo fee will help clarify the 100's of products available for Apple's iPod / Music Store.
Posted by OS11 (844 comments )
Link Flag
Jack Campbell malarchy...shame on you!
Do a search on any credible mac news site (macintouch, macfixit,...) and search google for the stories on this guy.(MacMice, DVforge...)

He's the only outspoken critic of Apple because Apple needs to stop creeps like him from stealing ideas and products to call his own.

His site once linked to another vendor LITERALLY for mac furniture. He used their product pictures, their pricing...verbatim. When the iMac came out, he was linking to others product and selling vaporware.

Now, Apple is "protecting" its customers from buying shoddy, "imPoster" rip offs. If you license from Apple, chances are your product is credible with them.

Check Jackwhispers dot com.
Posted by Below Meigh (249 comments )
Reply Link Flag
Apple is also tighting restriction on Rendezvous
In the latest version 4.7.1 Apple has changed the number of people who stream music from user computer from five simultaneous listeners to five listeners a day. That seems kind of a harsh restriction.

<a class="jive-link-external" href="http://www.theregister.co.uk/2005/03/15/social_music/" target="_newWindow">http://www.theregister.co.uk/2005/03/15/social_music/</a>

Is Apple intent on making their software and products less appealing or what?
Posted by unknown unknown (1951 comments )
Reply Link Flag
apple had nothing to do with it.
apple is stuck in the middle on those restrictions.

send your complaints to the recording industry, not apple.

do you really think a limit of 5 unique sharepoints per day is going to effect you?

do you even know what was limited? I highly doubt it.
Posted by OS11 (844 comments )
Link Flag
Bravo Apple!
This is a good idea. I've bought some add-on's for my mini-iPod and I'm honestly disappointed with some of them. If they carry the "Apple Approved iPOD accessory" this could help us all!
(might also add to the costs, but it's better than getting a device I cannot return and forced to eBay it later!) Cheers!
Posted by smook (3 comments )
Reply Link Flag
Tax is a misleading word
In certifying their partner's products Apple would be committing
their developer and engineering resources. Understandably they
would need to cover the cost their involvement in the program. I
don't think Apple is skimming money as the word 'tax' suggests.

I don't see anyone writing that Microsoft is charging a tax when
they change fees for early adopter access to their technologies.

Tax is misleading and dispraising word to use, but, possibly
calculated to create FUD among naive readers.
Posted by halesgarcia (29 comments )
Reply Link Flag
Old news
This is reported as if it's brand new, hush-hush, salacious news,
"sources say," but their plan is months old and it's been
published in many sites already. Got something new for us?
Great. Just want to complain about Apple? Yawn.
Posted by (1 comment )
Reply Link Flag
Are you out of your mind?
Have you ever seen an "Intel Inisde" sticker on a computer?
"Made for Windows." Centrino stickers everywhere?

You think Micrsoft and Intel are being generous and allow those
stickers on products without some kind of compensation?

Holy smokes the anti-Apple forces are getting lame in their old
age.
Posted by ewelch (767 comments )
Reply Link Flag
CPU
Well, every Intel CPU I've bought to build my PC's has come with that sticker.

So I guess I miss your point.
Posted by Sboston (498 comments )
Link Flag
WINTEL INSIDE LOGO$
Every PC sold has some sort of Microsoft XP Logo AND an Intel Inside Logo stickers on them. In fact Citizen Gates made a fuss about that all the Logo Stickers were the same size, so NOW the MS Logo MUST be larger than all the other logo stickers...(take a look).

WHY are these plastered all over their ugly PC crates &#38; lugtops? MS &#38; Intel Advertising that they are getting for co-payment for all the PC Ads.
NO PC ad ever is printed or televised without the MS-OS Logo AND/OR "Intel Inside" Logo (or AMD), since they are co-financing the advertising of the PC boxes to perpetuate their Wintel Monopoly.

But God forbid Apple should get a royalty for having the "Made for iPod" Logo on the authorized third party products...?

It's a COMPUTER BUSINESS people.

At least Apple doesn't plaster "IBM G5-64 bit chips inside" logos &#38; Mac OSX logo stickers all over their computers.

First you complain that Apple isn't a seroius computer company, then when they evolve into a UNIX/IBM G5 64 bit computing / Mac OSX 64 bit OS with aluminum towers &#38; laptops, then you whine about that they are acting too business like (HP/MS/Intel/ETC)...

If it's not one thing, it's another.
Posted by Llib Setag (951 comments )
Reply Link Flag
No different a 'tax' than the "Intel Inside" labeling
Intel has their stickers, and Microsoft does too. Both profit from it. Why not allow Apple too? There's no difference.
Posted by pkeyrich (12 comments )
Reply Link Flag
Very different than other logo programs
Apple's approach is similar to that which killed off the Atari computers. By insisting on a slice of the pie of every peripheral or program written for their device, they drive away third party support. As another poster noted, this has significantly hampered other products as developers will go to devices that are free to develop for. Only grudgingly would any developer pay for the "right" to sell add-ons. You can only get away with that if you have a monopoly, as in the Nintendo example. Overall though, this is a losing approach that usually seems like a good idea at the time because of the "free" revenue stream. Ultimately though, it tends to kill products.

The Intel Inside program actually pays computer manufacturers to use the logo on their products. It's known as co-marketing. So it's the opposite of Apple's approach. Pay developers for loyalty.
Posted by tdi1 (9 comments )
Reply Link Flag
 

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