Toasting the Competition?

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With the release of iTunes and iDVD, Apple hopes to position the Mac as the hub of our digital lives. But will the success of Apple's free software come at the expense of Mac developers with similar programs?

Apple's latest marketing strategy is simple: if you have digital devices, manage them with a Mac. "As we looked at what iMovie did and the response we got from it, we saw a lot of other devices that are in that camp," explains David Moody, Apple's senior director of marketing. Hence the release of iTunes, for MP3 playing and CD burning, and iDVD, for DVD authoring. A recent iTunes update allows the software to work with other manufacturers' CD-RW drives-not only Apple's (see Reviews elsewhere in this issue).

That's great-unless you happen to make software similar to the free applications Apple has just released. Take Toast, the longtime CD-burning standard from Adaptec's Roxio unit. At iTunes' unveiling, Apple CEO Steve Jobs compared iTunes with Toast and implied that the new application from Apple was easier to use.

That doesn't faze Victor Nemechek, product manager for Toast. "I don't think we need to compete head-to-head with iTunes," he says. "There will be a lot of people that max out iTunes' capabilities, want do more, and will then upgrade to Toast. They will want to convert their LPs into CDs, burn Disc-at-Once CDs, make labels for their CDs."

Then there's Casady & Greene's SoundJam, which bears striking similarities to iTunes-so many that it's rumored Apple struck a deal with Casady & Greene to adapt the latter's software. (Neither company would comment.)

So how can Roxio, Casady & Greene, and other makers of CD-burning software keep from getting squashed by free applications? They should look to the example set by video-editing-software developers, who faced a similar challenge from Apple's free iMovie. By focusing on the semiprofessional and professional markets, they were able not only to coexist with iMovie but also to thrive.

"It's hard to compete against free," concedes Mike Micheletti, product manager for CineStream, from Media 100. "But it's not too often that we run into consumers who are choosing between our product and iMovie."

Apple's entry into an arena can inspire developers to add new features to their software-CineStream, for example, now offers the ability to embed hot spots with URLs directly in videos.

Rather than crushing rival products, Micheletti says, iMovie has raised awareness of digital video. "A lot of that public awareness you can attribute to iMovie and the national TV spots to promote it," he adds. "Long term, we think it's a good thing."

As for Apple's next move, don't expect iTunes and iDVD to be the only new applications released by the company. Apple's Moody won't speculate on what the company will do next, but he does see the digital-hub strategy as a key part of Apple's future. "There are a lot of digital devices out there," Moody says. "And we have our eye on them."

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