updated 09:45 am EDT, Wed October 27, 2004
Apple opens Pandora\'s box
Columnist John C. Dvorak says that Apple's iPod/U2 bundled music announcements open a , saying that Apple's pricing simple bundles U2 music at its cost in order to sell more iPods, according CBSMarketWatch.com: "The industry is gah-gah over this deal because it appears to lower the price of music on a cost-per-song basis. In fact, this is an illusion. While new music that is sold on a downloadable basis tends to send about 65-cents to the record companies, other deals can be struck for old music... Old cuts, when licensed for a compilation, range in price from 4-cents a track to 18-cents a track with today's average hovering at about 13-cents...Thirteen-cents-a-track almost exactly accounts for the $50 premium on the U2 iPOD which sells for $349. The same iPOD without the music is $299 and quite profitable at that high price. Essentially Apple is giving the buyer the music at its cost to sell more iPODS."