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Most believe the upcoming news conference has to do with the much-anticipated iPod phone that Apple has developed jointly with Motorola. But some suspect Jobs, who has nimbly stayed one step ahead of the game since creating the music-download business model in early 2003, may have something else up his sleeve.
APPLE BOBBING AND WEAVING ON SEVERAL FRONTS
Battery Settlement, iPod Phone and Battle Over Download Pricing Are Among the Items on Steve Job’s “Things to Do Today” List
You can count on Apple to make news, even in a traditionally dead week like this one (Kanye West's new album notwithstanding), as the Labor Day weekend approaches. In the last few days, the groundbreaking company has agreed to a settlement with a group representing buyers of older iPods whose batteries have failed and mysteriously announced a Sept. 7 press conference in San Francisco, while also preparing to do battle with some of the Big Four on their drive for variable pricing of downloads and continuing to take heat for iTunes’ incompatible software. Just another week for Steve Jobs.

Most believe the upcoming news conference has to do with the much-anticipated iPod phone that Apple has developed jointly with Motorola, which is expected to be marketed by Cingular. But some suspect Jobs, who has nimbly stayed one step ahead of the game since creating the music-download business model in early 2003, may have something else up his sleeve. One theory, put forth by Reuters, is that he will announce a new flash player that will hold 1,000 songs, the same capacity of the iPod Mini; another is that he'll herald the launch of a video-downloads section of the iTunes store.

The iPod phone is expected to employ the iTunes software to download tracks, just like a standard iPod. One widely held misconception is that the hybrid phone will enable wireless downloads—that day is coming, but it hasn’t arrived yet…unless Jobs really has something up his sleeve. The phone will almost certainly contain a flash player rather than a hard drive, but there are rumors floating around that Jobs has intentionally kept the capacity miniscule so as not to cannibalize sales of the iPod with those of a device for which revenues must be shared with another company.   

As for the settlement, attorney Steven N. Williams, who represented the consumers, told Bloomberg  that those who had a battery fail in one of the first two generations of iPod players are entitled to either a $50 voucher for use at Apple's online store or $25 in cash, while third-generation owners who had a battery fail after two years are entitled to a battery replacement or a $50 voucher. Customers are entitled to a refund of at least half of what they paid Apple for repairs of any model.

The settlement underscores the fact that the iPod isn’t perfect, as lagging competitors begin to hype the far longer battery life of their devices (some players can go 30 to 40 hours between charges, compared to the iPod’s eight) and, in some cases, replaceable batteries. At the same time, just as Microsoft mimicked the Macintosh software abd design in the ’80s in order to make the PC more attractive to consumers, rival companies are busily imitating features of the ingeniously designed iTunes software even as their industrial-design engineers fashion ever-more-appealing and functional devices.

Some of these devices are also hybrid cellphone/music players. Indeed, as a story this morning in The New York Times points out, Verizon has in the last six weeks put two such hybrids on sale, one from Motorola and the other from Audiovox. Other units are on the way, including one from Sony Ericsson that is expected to hit the market this fall.

Finally, on the battle over download pricing, the plan being pushed by Sony BMG and backed by WMG would up the cost of a premium track to a reported $1.49 but lower that of a deep catalog item below the standard 99 cent price point. Some of those with knowledge of online-store technology say that making this sweeping change will require a massive amount of rejiggering, considering that the major stores now boast more than a million tracks; the iTunes store is said to be in the neighborhood of 1.4 million.

And not everyone on the label side is for the idea. "I don't think it's time yet," IGA chief Jimmy Iovine told The New York TimesJeff Leeds in a story on Sunday. "We need to convert a lot more people to the habit of buying music online. I don't think a way to convert more people is to raise the price. I believe that he really feels that everybody isn't hooked yet into the whole concept. You make it affordable, at a reasonable price, so they can learn about it. It's not an unreasonable position."

In other words, if it ain’t broke, don’t fix it.

       

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