March 16, 2005 1:34 PM PST
Apple seeks 'tax' on iPod accessories
For the right to display the logo, Apple was at one point looking to get 10 percent of an add-on's retail selling price. More recently, the company has been seeking 10 percent of wholesale pricing, according to people familiar with the situation.
Apple announced its intention to start the "Made for iPod" program at January's Macworld Expo. However, the company has refused to discuss most of the details of the program. Apple has said it applies to gear that connects electrically to the iPod--things like car adapters, power cables and remote controls, but not to cosmetic items such as cases. Word that Apple might be seeking a cut of the action was mentioned earlier this month on enthusiast site AppleInsider.
An Apple representative declined to discuss any fees or royalties associated with the program, what the requirements are to take part, how products earn certification and whether such certification will be required of products sold in Apple stores.
"With more than 400 iPod accessories on the market and growing, the Made for iPod logo program is designed to help consumers choose iPod accessories that work properly with their iPods, and also provide participating iPod accessory makers with guidelines and technical specifications to develop their products," Apple said in a statement provided to CNET News.com on Wednesday.
Add-on maker Griffin Technology is among the few already using the logo, featuring it prominently alongside many of the products on its Web site. Belkin, one of the leading makers of accessories, said it has not started adding the logo to its products, but said it is taking part in the program and strongly supports it as a way to help identify quality products.
"I'm hoping that it will make the market a little clearer for customers so that they will be able to buy with confidence," said Brian Van Harlingen, a senior technology manager for Belkin.
Van Harlingen said that he does not expect the program to force add-on makers to raise prices. "Any costs that might be associated with this program, we feel, would be offset by the benefits."
One outspoken critic of the program is Jack Campbell, CEO of Mac add-on maker DVForge.
"Behind the scenes, all it is, is a strong-arm tactic to take control of the iPod channel," Campbell said. "We ain't playing."
Although not all partners may be thrilled with handing over a share of their sales to Apple, Piper Jaffray analyst Gene Munster said the benefits to Apple outweigh the risks.
"The risk is the outside chance that they upset one of the people that are helping build this economy," Munster said. "The reality is this whole ecosystem is dependent on Apple anyway. Apple has a bigger opportunity to tax that."
He said that, assuming there are $250 million in wholesale sales of iPod accessories covered by the program, Apple stands to gain as
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