Will Apple Spruce Up Its DVD Products?

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If Apple's not careful, people will start thinking that it sees DVD as a big part of its future.

Consider the evidence. Apple's latest TV spot trumpets the Mac as the perfect tool for making your own DVD; Steve Jobs used the last announcement in July's Macworld Expo keynote -- a spot typically reserved for the champion product -- to talk about iDVD 2.0; and Apple, with little fanfare and right before Macworld Expo, bought DVD-authoring software maker Spruce Technologies.

It's the Spruce purchase that could have the greatest long-term impact on Apple's DVD offerings. The company, located just a mile down the road from Apple's Cupertino headquarters, makes a number of DVD programs. These include DVDMaestro, a professional tool aimed at supporting DVD authoring; DVDConductor, a basic authoring product based on the core elements of DVDMaestro; DVDPerformer, a professional DVD-authoring and -encoding product integrating high-end authoring features and real-time MPEG encoding; DVDVirtuoso, an entry-level program for nonlinear editing systems; and SpruceUp, a personal DVD-authoring product for Windows users. The company also offers DVD Premastering Tool for networked DVD production setups or standalone DVD formatting. And it sells two encoding boards -- one for 5.1 channel Dolby Digital audio and the other for MPEG-2 and MPEG-1 video encoding and AC-3 audio encoding.

None of Spruce's products run on the Mac OS. Although Spruce offers a few entry-level products, almost all of its software is geared toward professional users and Windows NT.

So what exactly does Apple have planned for its newest acquisition? The company declined to comment on what the purchase would mean for its DVD offerings. "This acquisition further enhances Apple's position as the preeminent platform for DVD authoring," said Apple spokeswoman Alicia Awbrey.

But that's not stopping speculation among industry observers who link the Spruce purchase to the DVD-authoring capabilities of Mac OS X.

"Looking at this from the outside, the biggest hole they have with OS X is that they don't have a DVD solution there yet," says Chris Kryzan, senior vice president of marketing and engineering for Sonic Solutions. While Apple has announced iDVD 2.0 (available in September) and the addition of a DVD playback feature in OS X 10.1, the company has yet to come out with an OS X-native product for pro users.

"I think it's a chicken and egg thing," Kryzan adds. "OS X won't be as popular as it could be until they have a DVD-authoring solution. They need to get stuff working with OS X."

Other observers of the DVD-authoring market agree. "I wonder if they're thinking they will build a high-end OS X-based program that won't compete with DVD Studio Pro," says Philip Hodgetts, co-host of the weekly Internet radio program DV Guys and CEO of Intelligent Assistance, which makes online training tools for Final Cut Pro, Adobe After Effects, Cleaner, and Media 100. "They got two things in the purchase -- an excellent high-end product-engineering team that is knowledgeable about Unix. And they got good MPEG hardware designs. Right now the weakest link [in Apple's DVD line] is MPEG encoding. They're not getting universal cheers for quality of encoding. It's a roundabout way to get at MPEG encoding, but they've got it.

"Spruce occupied a pretty high-end space. It appears that Apple might want a bigger part of that space," Hodgetts adds.

Though Apple has pledged to provide support for Spruce customers, it remains to be seen if Apple will continue to support the Windows platform.

If Apple keeps Spruce's offerings as Windows-only products, Hodgetts says, the purchase won't affect the DVD-authoring market very much. "But I think that's about as likely as pigs flying. I can't imagine that they will continue to support Windows."

To get an idea of how Apple might integrate Spruce's offerings into its own product line look no further than the April 2000 purchase of Astarte. Features of Astarte's DVD Director were integrated into Apple's DVD Studio Pro nine months after the acquisition.

The Astarte acquisition and the introduction of DVD Studio Pro changed the landscape of the DVD-authoring market.

"It created a void for most of the year for lower-end authoring solutions since the Astarte product was taken off the market once the supplies had run out," says Ron Margolis, co-host of DV Guys . "It also gave the other competitors in authoring tools -- Spruce, Sonic, and Daikon -- a chance to gain more market share."

The difference between Astarte and Spruce is that Astarte was already a Mac developer when Apple bought the company.

"Apple seems to be consciously driving away third-party vendors," Sonic's Kryzan says. "This is leaving very little reason for third-party vendors in video to want to do anything with Apple. It really makes us not care much about [the] Mac anymore. But we've done everything we can to actually continue to enhance our Mac systems and make them attractive. We are committed to doing that as long as we can."

Apple recently released version 1.1 of DVD Studio Pro. The new version adds support for certain third-party FireWire devices and offers enhanced detection and handling of Final Cut Pro unrendered sequences. It also beefs up optimization of the encoding process to more efficiently allocate the specified bit rate.

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