Steve Jobs discusses music labels, iPods and Intel Macs
Apple Computer CEO Steve Jobs and Senior Vice President of Worldwide Product Marketing Phil Schiller met with media today at Apple Expo Paris to discuss the iPod, music and the Macintosh. While the company was without any blockbuster announcements at the show, they did upgrade their .Mac online service with higher capacity and new features.
The chat with media today replaced a Jobs keynote presentation, which usually opens the event in Paris. Apple announced earlier this month that while Jobs would attend the show, there would be no formal keynote.
iTunes and the Motorola Rokr phone
Jobs answered questions about Apple’s recent partnership with Motorola to release the Rokr phone, which is capable of downloading music from Apple’s iTunes application. Jobs said that overall the work with Motorola was a learning experience for his engineers. (Also see Macworld’s Motorola Rokr review ).
“We wrote the iTunes software for that phone,” said Jobs. “We see it as something we can learn from. It was a way to put our toe in the water and learn something,” he said.
While the Motorola phone will work with iTunes purchased music, some service providers may be considering launching their own music service. In doing this, they would own the network and the music store, but Jobs isn’t sure that this type of service would work for consumers.
“I’m not convinced that it will be successful,” said Jobs. “The network providers will charge a lot to download music to a mobile — maybe US$3.”
Jobs also reasoned that a computer would still be required even if a mobile user downloaded music directly onto their mobile phone.
“You will have to backup the music on your phone up using your PC,” said Jobs. “If you lose a phone then you lose all your music. If you get a new phone you have to transfer it all. It’s not clear that buying music over the air makes economic sense.”
iPod and video
Jobs took some time to discuss video on personal devices, like the much-rumored Video iPod. While some companies are making moves in the video market, Jobs said that the market isn’t yet right for personal video devices.
“You can already download movies on the iTunes Music Store, and some albums offer video as an incentive to buy the music,” said Jobs. “We also offer video podcasts, but will people buy a video device just to watch this video? So far they haven’t. No one has been successful with that yet.”
Microsoft and others are focusing some effort on creating PCs for the living room, but Jobs warned of such plans. He also described Intel’s recently introduced Viiv range of PCs as “just an experiment.”
“Making a component for the living room is easy to do, but it is the go to market strategy that is difficult,” said Jobs. “It’s not a technical problem, it’s a go to market problem. I don’t think the convergence of television and computer is going to happen.”
Earlier this month Apple held an event in San Francisco, Calif. where the company dropped its top-selling iPod mini in favor of the redesigned iPod nano. Jobs described the transition to the nano as “having a heart transplant right before the holiday.”
While many other companies would be inclined to keep a device like the iPod mini and continued to update it with more colors and higher capacity, Apple instead replaced it. Jobs said, “anyone would think we were crazy,” but early reports from analysts indicate the transition was a smart move for Apple’s long term domination in the market.
Many wondered why Apple would hold an event to launch a new iPod just a couple of weeks before Apple Expo Paris. With the holiday shopping season approaching, Jobs was very clear in his response.
“We launched the iPod nano two weeks ago rather than at the Apple Expo because in the run-up to Christmas every week counts,” said Jobs. “The launch had been planned for over a year.”
Jobs also addressed questions on features that some of Apple’s competitors are offering in their MP3 players, like having a radio tuner built-in. While many see adding a radio to an iPod as a useful extra feature, Apple’s feedback is less vociferous than the noise generated by the company’s critics, Jobs confirmed.
“We don’t get a lot of customers asking for it,” he said.
Apple’s senior vice president of worldwide product marketing Phil Schiller pointed out that iPods now offer radio on demand. “Thanks to podcasting you can listen to radio shows whenever you want to,” he said.
Jobs also warned of the challenge of offering extra features just for the sake of it, saying. “We are very careful about what features we add because we can’t take them away.”
Looking at other technologies like Bluetooth — often referred to as Wireless USB — Jobs called it a “technology in search of a problem.”
“Frankly music is very big,” said Jobs. “We tend to forget how big it is. With Bluetooth, songs take a while to download. And if you have Bluetooth headphones you have to charge them as well as the iPod. People don’t want to do that. Also the sound isn’t good enough.”
Apple and secrecy
Apple is well known as being one of the most secretive companies in the entire industry. While many companies lay out their product roadmaps and openly discuss their products, Apple instead keeps its cards close, declining to comment on any rumor or speculation.
This, in part, has fueled the creation of many popular rumor sites and articles that openly speculate on upcoming products. This, in turn, has led to several lawsuits and letters from lawyers demanding that Web sites remove stories from.
Jobs explained the company’s motivation in not discussing future products.
“Microsoft is copying our operating system, Dell is copying our hardware. They just have to follow our tail lights,” said Jobs smiling.
Taking the opportunity to take another slight jab at Microsoft, Jobs responded to a question about why Apple doesn’t make iChat for Windows systems.
“Microsoft has to earn a living too,” said Jobs.
Music labels getting greedy
Recent reports have revealed some labels have been attempting to force Apple to change the prices it charges on the iTunes Music Store. Calling the labels “greedy,” Jobs confirmed that one label wants higher prices — Jobs is putting up a fight.
“The problem is we are still competing with piracy,” said Jobs. “The labels make more money from selling tracks on iTunes than when they sell a CD. There are no marketing costs for them. We are competing with piracy, so it needs to be a fair price — if the price goes up people will go back to piracy,” he warned.
Jobs said that about 75 percent of the iTunes Music Store catalogue is selling at least once a month, giving copyright holders money.
“If they want to raise prices they are getting greedy,” said Jobs.
The Macintosh continues to grow
Apple continues to enjoy growth in the Macintosh market, which many feel is a result of the so-called “halo effect” caused by the incredible demand for the company’s iPod MP3 player. Jobs said that Apple’s US market share is at 4.5 percent, while the global share is at 3 percent. Apple’s Vice President and General Manager Europe Pascal Cagni gave similar good news.
“In Europe in the last quarter Apple saw the fastest ever growth — 6-7 percent year-on-year,” said Cagni. “We have done very well in the UK, and fantastically with the iPod, and in Russia and Turkey too.”
In June Apple confirmed that the company would move from PowerPC based processors to Intel. Jobs said that the company would “find out” if the transition would impact its Mac unit sales, but said they remain on schedule, saying.
“We said we’d be shipping by next June and we are on track to have that be a true statement,” said Jobs.
Apple has long held that the best thing about a Macintosh is its modern operating system. That, says Apple, will not change when the company moves to Intel.
“Why do people buy a Mac? It’s not because of the processor. Its because of the operating system, OS X,” said Apple Senior Vice President of Worldwide Product Marketing Phil Schiller. “Intel Macs will feel the same. The transition can be one that is very easy for customers.”
Multiple reports confirm that hardcore advanced PC users have been downloading illegally distributed copies of Apple’s developer version of OS X for Intel processors. They have been hacking the system to make it install on all manner of PC processors, including those from Intel and AMD. Jobs confirmed that while they might be able to do that now, they won’t allow that to happen in the future.
“We don’t know how having OS X available for PCs would affect Macs,” said Jobs. “We will have technology in OS X for Intel so that it cannot be installed in other PCs.”
Jonny Evans and Karen Haslam from Macworld.co.uk contributed to this story.