Apple outstripped Wall Street's expectations for the quarter ended September 30, and while the blowout quarter was mostly thanks to higher-than-expected Mac sales, the company also sold a record 7.4 million iPhones. But a lot of commentators think that the iPhone is finally going to meet its match with Droid.
You don't need an instruction manual to figure out how to get music onto your iPhone.
Announced this weekend by Verizon in a cheeky TV commercial, the Droid is a Motorola phone running Google's Android 2.0 operating system. The advertisement notes that the Droid will do things that the iPhone won't, like take pictures in the dark and run simultaneous apps (apparently playing music in the background, as the iPhone can do, doesn't count), and touts its open development process (a head-scratcher for non-techies, but it could mean more apps than the iPhone, someday). The first preview I've seen, from Boy Genius Report, was also positive. People are excited, and for good reason--competition drives innovation, which is good for consumers.
But here's the thing: one reason for the runaway success of the iPhone--and one of the reasons why Apple still continues to sell more than 10 million iPods per quarter--is iTunes. Not so much the store, although that's an important component, but the software. Of course there are plenty of other applications out there that help you rip CDs and organize your digital music collection. And there are plenty of other sources for online music. But the real strength of iTunes is in the sync process--you plug your iPhone in, iTunes opens up automatically and recognizes it. Hit the large "Sync" button and it automatically loads your music (and video, and apps, and anything else you choose) onto it. (With some devices, depending on your settings, you don't even need to hit "Sync.") That's the simple, consumer-friendly, end-to-end experience that Apple figured out first.
Contrast that with the multi-step process required to transfer music from a Windows PC to the first Android phone that was available in the U.S., last year's G1. Amazon provided over-the-air MP3 downloads for that phone, giving it a rough equivalent to the over-the-air version of the iTunes store, but let's face it: most digital music is not purchased, but is ripped from a CD or comes from some other source (legal or not).
Verizon, Motorola, and Google haven't said much about music for the Droid. Maybe they still have a musical trick or two up their collective sleeves. But without some sort of equivalent to the iTunes desktop application, the Droid may be a great phone, but it won't be a great music phone.
It looks like the iPod's still got a bit of life left. It may no longer be the main driver of innovation at Apple, but the company sold 22.7 million iPods during its fiscal first quarter. That's up 3 percent from the same period last year, although a much slower rate of growth than in previous years. Still, it's growth nonetheless. Not only did Apple beat expectations but the results reported Wednesday also marked an all-time quarterly sales record for its iconic MP3 player.
Meanwhile, iPhone sales actually fell from the previous quarter, from 6.9 million to 4.4 million, coming in slightly shy of Wall Street's consensus expectations of 5 million. That's a definite reversal of the "hockey stick" sales trend we saw beginning last quarter.
What's going on here? My theory is that the iPod Touch is cannibalizing some potential iPhone sales. Plenty of users are satisfied with their current cell phone provider, but have read reviews indicting AT&T's cellular network. I've found this to be true in my own case--AT&T's 3G network has spotty coverage around Seattle, and my iPhone drops calls more frequently than my last phone, a RAZR from Verizon, although it's not as bad as the phone I had with T-Mobile until 2006. (I literally threw that one into a garbage can at the hospital, when I couldn't use it to call my family about the birth of my daughter.)
But most of the best things about the iPhone--the touch screen, the App Store, the music interface--are available on the iPod Touch, plus you get full Web access and e-mail when you're within range of an open Wi-Fi network. Better yet, you get more capacity for your music--I'm constantly having to delete apps and albums from my 8GB iPhone, but a 32GB iPod Touch would be enough for my entire digital music collection. Except the darn thing would have cost $200 more than my iPhone.
Actually, scratch that--once you add in the cost of the required AT&T data plan, any iPhone is far more expensive than the $399 32GB iPod Touch.
I reckon a lot of potential iPhone buyers are doing the same calculations and buying an iPod Touch instead. If so, offering a $99 iPhone--as I'm willing to bet Apple will do before the end of 2009--probably won't help sales all that much. Rather, Apple might have to consider changing from AT&T to another partner carrier--Verizon seems to be the least-bad of the big U.S. cellular networks, based on anecdotes I hear from its customers.
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The reviews are in on the Storm, the new touch-screen phone from Research In Motion, and nobody loves it. Check out takes from CNET, Engadget, Gizmodo, and Time for a sample.
In particular, the mechanics of the touch screen--you have to press areas on the screen with some force, as if they're actually keys--have been greeted with almost universal frustration.
Looks great, but how does it sound?
(Credit: CBS Interactive)But for a would-be iPhone killer, the reviews are remarkably light on the Storm's music features. It's true that BlackBerry users are traditionally e-mail junkies, and the phone's communications features (apart from the touchscreen weirdness) are expectedly top-notch. But if this is going to be a consumer phone--Verizon's attempt to make up for its epic fail in passing up first rights to the iPhone--music is critical. A big part of the appeal of the iPhone is that you don't have to carry around a separate cell phone and MP3 player anymore.
Apparently, though, the Storm isn't much of an improvement over the nontouch BlackBerry Bold, which was announced in the summer and came out a couple weeks ago. The Storm's got an 8GB microSD card, as opposed to the Bold's 1GB, but otherwise, it uses the same media management program from Roxio (known for creating functional but not particularly user-pleasing software) and the same ability to sync your iTunes library, and that's about it. There's no on-board music store, although this Time review says a deal with Rhapsody is imminent. (No V Cast? That's no big loss.) And the BlackBerry app store isn't set to launch until March--the current iteration has only eight apps--which means you won't have any great musical add-ons like Shazam, Bloom, Finetune, OurStage, or JamBase.
Of course, if you want a smartphone with a touch screen, and you insist on using Verizon, you're probably going to buy one of these. In fact, you probably already have. But if you're a music fan, don't count on replacing your MP3 player with this particular phone.
At CES a day before it opens, and although I've been able to sneak into some of the exhibition halls with my press pass, security's wised up and closed the others off to all but people setting up. So I spent a few minutes in the Verizon-sponsored portion of the press booth playing with LG's Voyager 10000, a would-be competitor to the iPhone. They're asking $300 plus a two-year contract commitment--that's $99 cheaper than the least-expensive iPhone, but the Voyager comes with much less memory (this one had 300MB on board), so you'll have to pay extra for a mini-SD card, up to 8GB.
"Amused to Death" by Roger Waters, downloaded via V Cast and played on an LG Voyager. The sound quality was suprisingly good.
(Credit: Matt Rosoff)They had it hooked up to a circular chair-pod thingie with individually controllable left and right speakers, which actually sounded quite amazing considering the files are 160kbps WMA, but my experience was periodically interrupted by the staffers, who apparently were under instructions not to let us listen too long unmolested. Funny thing was, one of the staffers didn't seem to be following the script very well, first mentioning to me that she couldn't believe that people actually paid $1.99 to download a song from V Cast, then claiming she preferred vinyl to all other forms of music and likening digital downloads to "static." Um, isn't it my job to point out the flaws in your products?
My brief experience with the Voyager and V Cast was so-so. The touch screen wasn't as responsive as the iPhone's, and the V Cast service kept returning a "can't connect to the server" error when I tried to download a song, even though the search results were right behind that search screen. I'm glad to see the iPhone has spurring the industry to move forward, but from what I've seen so far, when my Verizon contract's up this summer, they'll have an uphill battle to keep me aboard.
CES before the crowds arrive.
(Credit: Matt Rosoff)Last week, George Harrison--who created the best post-Beatles solo album, the gorgeous All Things Must Pass--became the fourth of the Fab Four to go online. His full solo catalog is available on iTunes and other music stores now. Today, Led Zeppelin confirmed that its entire catalog will be released online Nov. 13, not just the songs on the new greatest hits compilation, Mothership. Zeppelin will also follow AC/DC and sell its songs as ringtones on Verizon Wireless.
Surely, the full Beatles must be next?
(UPDATE: RealNetworks has filed an 8-K form with the SEC that contains some more details about Rhapsody America. Most notable: MTV is contributing a $230 million note to the deal, and RealNetworks will in exchange be required to spend that amount with MTV on advertising. The joint venture is between RealNetworks and MTV, with Verizon as a distribution partner.)
The 2007 Consumer Electronics Show must've held some awkward moments for Microsoft.
The previous year, the company had trumpeted MTV's Urge music store as the showcase for the Windows Media Player 11 that was due to ship with Vista. Bill Gates had Justin Timberlake on stage to promote the forthcoming service, which would be integrated into the Windows Media Player (as was previously the case with other stores, such as Napster and MSN Music), and would "bring people's emotional connections with music to the forefront of the digital entertainment experience" (said a particularly ebullient press release). At the same show, Microsoft also made a big deal out of Verizon's V Cast service, which was the first to offer both over-the-air and PC-based music downloads using Microsoft's Windows Media Audio technology.
A year later, in 2007, Vista was still not out--the result of a final delay that had the OS missing the 2006 holiday season--so Microsoft was forced to trot out Urge and Windows Media Player 11 yet again as examples of how great digital media would be in Vista. Only this year, there was a new wrinkle: in the interim, Microsoft had announced and launched its own competing music player, software (why "integrate" with the Windows Media Player if you can build your own dedicated app?), and store. None of which were compatible with the vast array of products from long-standing partners, such as MTV and Verizon.
At the time, Microsoft insisted that its PlaysForSure initiative (which identified compatible Windows Media-based players and stores from third parties) was not dead, but would remain on a separate but equal development path from Zune. Apparently the partners didn't believe it. First, Samsung jumped ship, creating its own player-store-software combination. Now MTV and Verizon have teamed up with Microsoft's oldest competitor in the digital music space, RealNetworks. The ink's still drying on the deal, but their goal is to launch a new company, Rhapsody America, that will give users access to a huge library of music from almost anywhere--the "celestial jukebox" that many music fans have been wanting for years.
The alliance makes sense. Rhapsody, which consistently wins praise from reviewers and users, would get a huge marketing boost from both Viacom/MTV (which recently announced plans to spend $500 million expanding its game portfolio) and Verizon, as well as a new distribution channel (inclusion on Verizon phones, sales of over-the-air downloads). MTV gracefully shutters Urge--which never had a chance to get off the ground--without abandoning the online music market altogether, and gets a way to distribute music to mobile phone users. Verizon gets an online subscription service to add to its over-the-air and download-based services.
So now it's Microsoft's move. Will they respond by adding an over-the-air component to Zune? (As SanDisk and Yahoo teamed up to do, and RealNetworks and iRiver plan to do.) An announcement should be coming in the next couple of months if they're going to get anything new out in time the holidays.
Among last week's digital music news was the item that seminal hard rock band AC/DC has taken a tentative step on the information highway (as opposed to that other highway). AC/DC's deal with Verizon was notable because the band chose to bypass industry leader iTunes, and because the band is selling only complete albums (for $12 apiece--higher than the current price of their CDs on Amazon!) rather than individual singles. Another oddity: most of AC/DC's catalog will be not be downloadable over-the-air to Verizon phones; instead, users will have to download the albums to their PC first, then transfer them. (The sole exception is the song "You Shook Me All Night Long," which is probably the one track that most non-AC/DC fans have heard and might be willing to download.)
Something about this story sounded familiar, so I did some digging. Sure enough, AC/DC helped Microsoft launch its MSN Music download service by offering a similar exclusive nearly three years ago. That deal was also for albums only. But the MSN Music download service was a casualty of the company's Zune initiative. Instead of making Zune compatible with the PlaysForSure program, which allowed multiple online stores to work with multiple devices, Microsoft followed Apple's model of tying the Zune to a dedicated store, the Zune Marketplace. Microsoft didn't want the cost and complexity of licensing music for two stores, so MSN Music got the axe. Apparently, the AC/DC exclusive went with it.
More exciting was the still-unconfirmed report that Led Zeppelin will be offering a new greatest hits collection, Mothership via iTunes. The Zep has never approved its music for digital download, although you could always find it via unapproved sites like MP3Sparks (the replacement for AllofMP3.com, which was shut down by the Russian government earlier this year).
Even more interesting, however, was the revelation of a new official band site, LedZeppelin.com. (The old familiar Led-Zeppelin.com is still up.) There's nothing there today except for the four logos from the band's fourth album, the release date of Mothership...and a link to sign up for updates. What sort of updates could they possibly deem important enough to create an e-mail list? Most fans already ahve all their albums or one of their earlier hits collections, and if we (yes, I'm a fan) really want this one, we know when it's coming out. Could the band be planning that long-rumored reunion tour with their original drummer's son? I can just imagine their reaction to the recent Police tour: "Those guys got $225 a ticket?"
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