July 29, 2004 12:05 PM PDT

'Stunned' Apple rails against Real's iPod move

Apple Computer on Thursday issued a scathing response to RealNetworks' move to unlock Apple's proprietary technology and make it possible for people to listen to music in RealNetworks' digital file format on iPod devices.

In a terse statement, a "stunned" Apple accused RealNetworks of adopting the "tactics and ethics of a hacker" with the release of its Harmony software. Harmony allows songs sold via RealNetworks' online store to be played on a variety of portable devices, including Apple's iPod and Microsoft-compatible rivals.

Apple threatened to block access to the iPod using Harmony the next time it updates the software used to run the device. The company last week unveiled the fourth generation of the trend-setting music player.

"It is highly likely that Real's Harmony technology will cease to work with current and future iPods," the company said in its statement.

In addition, Apple said it is investigating the implications of Real's software strategy under the Digital Millennium Copyright Act (DMCA) and other laws. The DMCA broadly restricts the bypassing of copy-protection technologies used in DVDs and in some music CDs and software programs.

RealNetworks has been selling songs from its digital song store since January, but the files previously could be played only on a few portable devices. Apple has refused to provide licenses to companies seeking iPod compatibility, and RealNetworks did not seek permission before releasing the software.

Later on Thursday, RealNetworks issued its own statement in response to Apple's accusations. The company contends that consumers, not Apple, should be the ones controlling which music files can be played on their iPods. And the DMCA is not applicable to Harmony, RealNetworks said, because the antipiracy legislation "explicitly allows the creation of interoperable software."

RealNetworks said that it has no plans to change the application and that Harmony was created "in a well-established tradition of fully legal, independently developed paths to achieve compatibility."

Harmony automatically changes songs created in other formats into files that will play on an iPod. Since Apple refused to license its FairPlay copy-protection software to RealNetworks, the company had its engineers create their own version of the application in order to make the device play them back. Although the company said this action wasn't technically "reverse engineering," legal experts have observed that Apple may have some recourse if it decides to pursue the matter aggressively.

But one industry watcher was uncertain how strong a case Apple might have under DMCA, even though the company has had success defending its trademarks, as in 2000 when it reached settlements with several hardware makers accused of selling knockoffs of its iMac computers.

Regardless of whether Apple goes to court, it's likely that the company has little to worry about from the RealNetworks technology, said Tim Deal, an analyst with Technology Business Research in Hampton, N.H.

"I think the public will see this as sour grapes, since Real couldn't reach a deal with Apple," he said. "I'm not sure there are that many people out there who really want to work with multiple music platforms."

Apple does need to defend its proprietary iPod technology, Deal said, since the device's top selling point has been the integrated package of the music player and music files sold over the company's iTunes digital music service. But since Apple counts on iTunes primarily as a driver of iPod sales, Deal predicted that the company's profits won't suffer because of Harmony.

"Real is looking for music store revenue, whereas Apple really uses iTunes just to sell more iPods," he said. "As long as people are still buying iPods, the immediate threat posed by (Harmony) would not seem all that significant."

CNET News.com's John Borland contributed to this report.

42 comments

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Go Real!
Real is now fighting the battle we all want to fight, supporting both the record industry and consumers.

Apple and Microsoft have already 'supposedly' pledged to make their DRM technologies compatible by 2005.

Apple wouldn't refund my gift certificate, produces lower quality music than Real. I deserve to have choice for cross-platform music. (We'll see whether Harmony fulfills that goal.)

But really, these DRM technologies simply appear to modify the header on the AAC file whenever you burn or transfer the songs.

Apple's issues with Real will have major implications for other players that play "Fairplay" AAC media, and will be a nail in the coffin for Apple that they are not simply producing "standards-compliant" music like some of their fans believe. I used to be their stalwart supporter even though I understood the DRM.

Not anymore.
Posted by smkatz (38 comments )
Reply Link Flag
It doesn't matter
It doesn't matter what RealNetworks has done. iTunes and the iPod are the best in each of their respected markets. Apple has done what nobody else has been able to do and Real needs to figure out how they can provide value. Real screwed up major here out of jealousy and envy.

www.hotgigs.com
Posted by brothe (22 comments )
Reply Link Flag
get a life
neither iTunes or iPod is a best in class device and for myself (if someone gave me an iPod) I would expect to be able to load music onto it from anywhere. Can anyone say monopoly?

If I buy hardware I will run any software that is available for it - otherwise i really only rented it....
Posted by wolfman224 (2 comments )
Link Flag
Stop Suing your customers and sue your distributors
Suppose that at the dawn of the era of recorded music, each phonograph manufacturer had insisted on using a different size and shape pin at the center of their turntables. Record producers would have been handcuffed by the need to manufacture their product in several different formats and keep pace with each new variation on the pin that got launched on the marketplace.

Such a silly grab at a market share would have retarded the explosion of the industry in the same way that squabbling over player formats has managed to keep decade-old MP3 technology from assuming its rightful place as the new medium of choice in recorded music.

The launch of pay services has clearly established the commercial viability of digital music. The RIAA would be well-served by focussing its legal energies on reaching an agreement on formatting standard among the companies which stand in a position to insure the survival of the industry which it is supposedly safeguarding.
Posted by (1 comment )
Reply Link Flag
Stop Suing your customers and sue your distributors
>Suppose that at the dawn of the era of recorded music, each
phonograph manufacturer had insisted on using a different size
and shape pin at the center of their turntables.<

Actually, they did exactly that. The marketplace eventually
forced a standardization that phonograph manufacturers had to
accomodate. Some held out, however, until the 40's!
Posted by curtsrca (6 comments )
Link Flag
How about that?
It seems to me that there are three obvious facts that have been
overlooked here.

First, the iPod is APPLE's product, not Real's, not Microsoft's, not
Sony's. It's their decision on how it's designed and what digital
music formats it supports or licenses. It is up to consumers to
decide if Apple has made the right choices, and so far, they have
voted with their wallets, in overwhelming numbers. And,
anecdotally, the myth that the iPod only plays music from
Apple's Music Store is just that - a myth. the iPod began life as a
MP3 player and has held that fort down throughout.

Second, it's been suggested by some commentators and
"analysts" that Real's "Harmony" software can only be good for
Apple, it will probably help them "sell more iPods." That's
absolutely ludicrous. The last time I checked, Apple can barely
keep up with the current demand for the iPod, it literally can't
make these things fast enough. They're selling out of stores,
right and left. So the "it will help them sell more iPods" theory is
a non-starter.

Third, it's kind of humorous in a way to sit back and watch the
iPod story unfold. Apple comes along and has tremendous
success with the launch of the iPod. It adds the music store into
the mix, and, beyond the wildest dreams of anyone in this
business, the music store has sold over one hundred million
songs, far and above the other me-too online music stores that
have evolved in it's wake. The iPod continues to sell amazingly,
the demand for it is red hot. So I guess it should come as no
surprise that despite this "insanely great" success that Apple has
had and continues to have with the iPod, iTunes, and the Music
Store, Apple's competitor's (along with their sycophant
commentators in the media) have lined up to advise Apple on
how to solve their "problem." Pretty silly, eh?
Posted by Terry Murphy (82 comments )
Reply Link Flag
Short term vs. long term
If you thought that demand was going to outstrip supply of your hot product for the foreseeable future, why would you lower your prices by $100?

No question that Apple has put out a superior product and they deserve their success, but we are in the very early stages of this race.
Posted by (2 comments )
Link Flag
You are thinking way too short term here...
I agree with Pete on this. Mac users and Apple are patting themselves on the back for a job well done. Never mind the fact that '04 is really the first year Apple has seen real competition in both the hard drive music player market and the online music store market. Right now yes Apple is kicking butt. But we are talking an industry here. If WMA becomes the defacto standard simple because MS has convinced everyone other then Apple to use their "stuff" they will become the industry standard by default. Apple simply has to stay closed to lose the market in the long run. You yourself said that Apple can't meet demand. Well guess what? the combined force of Sony, Toshiba, Dell, Gateway, Rio, et all CAN meet demand. And that is what could kill the iPod ling term. Unless Apple finds a manufacturer that can boost the output of iPods and unless Apple starts licensing FairPlay to others they are going to get thrashed in the long run. The exact same way they are getting creamed in the computer market. How many Macs are out there? Its something like several hundred million isn't it? And yet it only accounts for less then 3-5% of the computer market. OEM's are smothering Apple when it comes to the computer market and if Apple isn't damn careful in the next few years the same thing will happen with their beloved iPod.
Posted by Jonathan (832 comments )
Link Flag
wouldn't be the first time...
it wouldn't be the first time that apple gets a superior product on the market first (or sooner than most), and ends up with a small share of the market -- if that's how it all shakes out. opposition to licensing and inability to meet demand; familiar themes over the past 20 years. apple certainly survives and makes profits, but i'll just always wonder what could have been.
Posted by mtbdude666 (8 comments )
Link Flag
When will Apple learn?
Apple makes no secret that iTunes, the store, is a breakeven business at best, and that there are huge margins in iPods. So why not let other music sellers make the iPod even more popular? Did Apple learn nothing from the closed MacIntosh platform? 3% market share is not a winning strategy. I was a huge Mac fan in the 80's but I needed more software, so now I use Windows and I love the choice of HW and SW and the value of the platform (anti-MS comments aside). Consumers love choice. iTunes does not have anywhere close to the breadth of music that I like to listen to (how about RadioHead?). iPod and iTunes dominate today, but they should take a lesson from Microsoft and use that dominance to build a platform strategy not a closed, short lived silo strategy. I have an iPod today, but I want a portable version of Rhapsody, so will I stick with iPod? Only as long as there isn't a decent alternative.
Posted by (2 comments )
Reply Link Flag
Spot on.
Couldn't have put it better myself. However, Real have gone
about this completely the wrong way.
Posted by (15 comments )
Link Flag
2 thoughts.
1. Even if "stunned" Apple decides not to pursue the matter aggressively, don't count on the RIAA
to keep mum. They may put pressure on Apple or
raise hell on their own just to make a point.

2.
>>The last time I checked, Apple can barely
>>keep up with the current demand for the iPod
This kind of information gets the Number 1 COPYCAT
excited. I wont be surprised to know that the "Playstation killer" game is running again.
Posted by (23 comments )
Reply Link Flag
Cross the iPod off my list.
I was really leaning toward buying an iPod after doing a market survey, I liked the size, friends who had them liked them. I have a lot of mp3s (about 60 GB -- all paid for through the old Emusic) but not that many WMAs. I knew that the iPod didn't play WMA. But I didn't know it extended to other formats.

But I did not know WHY. I'd assumed it was about licensing fees.

Now it's obvious -- painfully obvious -- that Apple wants to lock up their iPod customers into their proprietary format.

Maybe this kind of stuff works with starry-eyed Mac users who think Apple's capable of no wrong (but that does NOT describe most of my power-user Mac pals, who are mostly graphic artists and a sharp and cynical lot) -- but I can't imagine that it'll fly with regular folks -- now that Apple has made its policy -- and its motivations eminently clear and then UNDERLINED the venality of them.

What a bunch of jerks. Too bad. They pretty much had an iPod sold, here, until this. I've had experience with proprietary formats before and there's a reason the marketplace favors open formats. Flexibility and freedom to use YOUR media the way you want.

I'll just wait. To heck with them Apple jerks.
Posted by dogmo1001 (40 comments )
Reply Link Flag
I agree.
I agree 100%
Posted by marlow714 (29 comments )
Link Flag
again, confused
you mean iTunes locks you in... NOT the iPod... the iPod doesn't care what format as long as it is a standard like MP3, AIFF, WAV... your comments are confused with DRM which is a entirely seperate issue. The iPod is fine to buy, use... but you are talking about iTunes...
Posted by OS11 (844 comments )
Link Flag
Works for me
I have loaded many of my MP3's on my IPOD it works wonderfully. I have never purchased or ripped music into WMA (indeed you are the first person that i have ever heard of that has)

As the other poster said, don't confuse the device with Itunes
Posted by robanga (47 comments )
Link Flag
Totally agree
I was also going to buy an iPod. Now that I see their reprehensible attitude towards supporting other formats (the support of which should INCREASE sales of iPods, ironically), they can go take a flying.... leap. Their arrogance is breathtaking.
Posted by yobtvoya (41 comments )
Link Flag
Precisely...
Precisely the kind of comment that I meant in my own post elsewhere about "starry-eyed" Mac users.

These true believers are not representative of my power user Mac friends (most of them graphic artists) who are a world-wise and wary lot. But, clearly, they are out there.

I agree that Apple has the RIGHT to do whatever they want with their product and I also agree that it is the marketplace that will sort it out.

But I DON'T think many people were all that aware (as I was not) of the format restrictions arbitrarily placed on the iPod by Apple, clearly motivated as we can see from their reponse to the RealNetworks initiative, to lock customers into their proprietary format.

I had never bought any Apple products before but I was about 85% decided to get an iPod in the near future.

Now that I'm aware of Apple's desire to lock its users into their own format I GUARANTEE you I will be buying from one of their competitors. I'm in no hurry. I've already owned one RAM based mp3 player and I know enough from that sorry experience to NOT settle for a lack of features or -- worse in some ways -- arbitrary and unnecessary restrictions.
Posted by dogmo1001 (40 comments )
Reply Link Flag
Oh?
These friends of yours are on OS9, right?

Aside from the fact that the iPod plays AAC, WAV, MP3, etal, and
iTunes converts to AAC, AIFF, Lossless, and MP3, you can use
Apple or shell scripts to convert to LAME mp3 or use other
encoders.

Please do not spread your ignorance of the issue. The iPod is
PRIMARILY an mp3 player. I'll spell that for you: M-P-3. And
Apple knows this, and doesn't care about your segment. And the
numbers bear them out.

If you want to spend money on a 'multimedia player' with a
postage stamp screen be my guest and get thee to Arkaos' web
site. No one is holding a gun to your head. I, on the other hand
will stay with my 3G iPod. 95% of my collection is mp3, I have
calendar, addressbook and note integration from OSX (so long,
for a few years, oh Palm of mine) -- I guess the Win32 users can
get along with JUST iTunes.
Posted by leoofborg (12 comments )
Link Flag
your confused
sounds like you haven't thought much about your comment. ALL MP3 Players have some form of Rights Management. The iPod is no different. If you want to turn your paid songs into MP3's, just burn a CD. Apple isn't stopping you. Chances are HIGH you aren't going to be buying many songs from iTunes in the first place, just use LimeWire they are free and the iPod will play them just fine. I think you are misguided if you think the grass is greener with other MP3 players. enuff said.
Posted by OS11 (844 comments )
Link Flag
What about WMA?
I am confused as you stated open formats. When did WMA
become an open format? Isn't it owned my MS and it is a closed
format. Let's see Real try to do something like that to WMA
without MS getting their slice? Lawsuit quicker than you can say
WMA. So let's be concise when commenting and first research
before stating facts which really are false.

As for your Power Mac users they probably are pulling your
chain. Mac users do actually have a sense of humor, and will
take things with a grain of salt. I guess some Window users don't
have a sense of humor and believe evrything they hear as a fact.
Posted by wrwjpn (113 comments )
Link Flag
Go Apple! (Real RIP)
Real, a company that blew off Apple and makes the all intrusive
Real Player Gold, the cruddiest piece of software on ANY
platform now wants to behave like a black hat cracker and
bypass Apple's DRM?

I hope Apple sues the pants off Real. This will set a legal
precedent that software companies that behave no better than
crackers can expect a hefty lawsuit .. if not, then it will just show
that the DMCA is meant to persecute the little people and not
high-and-mighty, ethically-challenged companies like Real.

Real actually has sound quality? News to me. RealOne content is
a PITA to author compared to WMV, QT or mp3. Real dug their
own hole on this one for being high and mighty during the
boom to users and developers. Hmm, static radio quality?
Perfect for FoxNews.com, which is a talk-radio like website. That
is the ONLY implementation of RealONE that I've seen that works
-- so, uh, congratulations to Real for doing ONE thing right. It
won't save you.

Of course, AAC is just as bad, which is why MOST iPod users still
use high bitrate MP3 from, uh, their CD collection. Apple knows
this, jeez. That's why their business is centered on the -iPod-
and NOT the iTunes Music Store. Duh! Why would they even
allow a cracker(jack) company like Real to create support
problems for -them-? No thanks.

Give it up, Real. Microsoft has you headed to the undertaker with
WMV, Apple brought the hammer with Quicktime and you're
lying in the coffin. Please keep your arms in the box and stop
flailing around for hardware. It's been done before, and those
companies are now listed. On f*ckedcompany.com.

Real ceased to be relevant the minute the littlest guy on the
block rebuffed their Fairplay bid, and they know it. To continue
my mortuary metaphor, it's buryin' time.

Meanwhile, the littlest guy, Apple, whose death has been
forecasted countless times, strikes a brilliant move by brushing
off a company in decline, one headed for a very REAL fall.
Posted by leoofborg (12 comments )
Reply Link Flag
apple employee
you must be an apple employee.
Posted by mtbdude666 (8 comments )
Link Flag
Replay Music does this already, and better
Just use a third party recording program like Replay Music, and you can make standard MP3s from any Real service or online radio station that play nicely on the iPod.

Replay Music even automatically tags MP3 fles usinga music recognition system, and will accurately split tracks as well. It kinda makes this whole spat pointless.

Go to www.replay-music.com for more about Replay Music.
Posted by applian (13 comments )
Reply Link Flag
Competition is good (re: Go Real!)
Everyone needs a defender in our system of justice in order for fairness to be obtained. I encourage you to create a system restore point, head over to download.com, and grab the Real beta.

Why?

With each version, they get less annoying.

RealPlayer 10.5 takes absolutely no file associations, unless you already have Real as your default. (I do because I love the jukebox functionality.)

RealPlayer 10 or higher will never pop a single "message" up on your screen. It's not perfect software, and iTunes is slower, memory-hogging but has an elegant interface no one can match.

(Apple owns intellectual property relating to the interface of their music store. No one is stupid enough to copy Apple's trade dress.)

AAC was invented partially by Apple, and Quicktime essentially is AAC now. Quicktime Pro and "Quicktime files" of new products like Final Cut are now AAC files. (colloquially known as MP4, the next MPEG format.)

You are absolutely right. AAC doesn't sound as good as it "should" at 128kpbs for some people.

Real's music store uses 192kbps for this reason. Download RealPlayer 10 "gold" (meaning non-beta, it is still free.)

I want to reiterate what has been said before: No company is perfect, and it is arguably Apple who made Real build a player that didn't have pop-ups.

So sit back and enjoy the competition.

I was going to buy a Mac for my Office. Now, I'll try Linspire. I loved Apple, and was raised on them, and excited about migrating to Mac OS X.

No more..

unless Apple changes their mind.

--Sam
Posted by smkatz (38 comments )
Reply Link Flag
Real - REal Stupid
This is the ultimate irony - Real, a company built upon locking away content so that it plays back all low-res and low fi is hacking open another company's product.

It takes them 8 years and 10 players later to deliver one that works? But it takes them less than a year to hack another company's products? ***?

Where's the Real software for conversion from RAM or RM to MP3?

How about releasing that first?

I think we should let REAL know exactly what we think of them and their actions:

<a class="jive-link-external" href="http://www.realnetworks.com/company/contact/index.html" target="_newWindow">http://www.realnetworks.com/company/contact/index.html</a>
Posted by jbelkin (167 comments )
Reply Link Flag
They Didn't hack it they Adapted to it
Real Didn't hack or crack any thing, they adapted the music files (ie. Not not created by apple) to play on apple's ipod. There was no hacking or cracking on any of Apple's music file or ipod software.

You Have missed the point.
Posted by simcity1976 (136 comments )
Link Flag
A thief is a thief.
I believe that Apple has a very valid complaint, and if this goes
to court, Real will lose.
Posted by (2 comments )
Reply Link Flag
no they don't
if I make a program for windows, and then adapt it to linux. there in no crime my program not theres.

Same thing goes with music files
Posted by simcity1976 (136 comments )
Link Flag
Umm... exactly what did they steal?
So Real (which is not a company I care to defend - it's just the principle) makes their software compatible with the iPod. Exactly where is the theft? Exactly where does Apple lose revenue due to this "hacking"? These are the kind of questions a court of law will ask in a lawsuit. Where are the damages?
Posted by yobtvoya (41 comments )
Link Flag
Gasp!
I've got some advice strategy for Apple: how about issuing a memo to the iPod development team saying "It ain't done until Real doesn't run."

Sound familiar? Poor Apple. Now that they've got a little success, they're starting to feel the same constraints as Microsoft. Funny.
Posted by tooner440 (3 comments )
Reply Link Flag
you dimwit
the iPod uses mp3 aac and more they don't use wma, but who
really cares. you could just buy cd's and rip them yourself there
is nothing stopping you there. They have a right to protect their
own interests.
Posted by Filip Remplakowski (91 comments )
Reply Link Flag
compatible /serving consumer best?
Its sort of obvious which firms want to "play ball", simply attempting compatibility, and which one's are trying for a monopoly...or am I wrong?
Posted by (2 comments )
Reply Link Flag
 

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