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Apple\'s iPod licensing fee may backfire

updated 07:45 am EDT, Tue October 11, 2005

Made for iPod licensing

Apple's Made for iPod licensing program may , Apple has notified companies that it will collect a 10 percent royalty fee for products that access the iPod port and may drive manufacturers such as Bose and Altec away from the iPod accessory market, as many believe the fee is much higher than comparable license fees, which are about 1-2 percent, according to Smarthouse: "The move will significantly impact iPod accessory manufacturers with some considering dropping accessories from their portfolio.... Dominique Water the head of Bose's Asia Pacific operations said "All Apple partners were told of the decision some weeks ago. This is a massive licence fee which will not sit comfortable with many partners. Bose is not happy as the proposed fee is excessive by any standards." The report also notes that Bose is calling for a single standard to connect accessories to any (Windows-based) MP3 portable player.

by MacNN Staff




  1. ecrelin

    Joined: Dec 1969


    big mistake

    so no competitors can kill the ipod's dominance so Apple will again shoot itself in the foot and do it themselves. Like they aren't making enough money, smacks of M$ strategy, Steve,the record companies are greedy?can you spell JACKASS?!?!?

  1. mouseketter

    Joined: Dec 1969


    Microsoft is doing it

    Microsoft is doing the exact same thing with the Xbox 360 only with 2 to 3 times higher licensing fees for its accessories.

    And to add fuel to the fire. Not only is there a stiff fee but Microsoft can even dictate what 3rd party product the company can release.

    So if Microsoft thinks there are too many 3rd party memory cards on the market they can tell a company no we are not going to license any more cards.

    If Microsoft and Apple are successful look for every company to start doing this.

  1. JeffHarris

    Joined: Dec 1969


    Sheer Stupidity

    Sure Apple has a massive hit with the iPod. It's fine that Apple has some sort of Made for iPod guidelines for accessory makers to follow. But to charge huge fees for such approval strikes me as so anti-Mac/iPod that it boggles my mind.

    One of the major reasons that the Macintosh has managed to survive has been the great Macintosh COMMUNITY. For instance, when Mac people see you using your PowerBook in public, there's a silent recognition. It feels good. In a society where one can feel increasingly isolated, it feels good.

    When people get a taste of the Mac community spirit, they generally like it. it seems to run counter to consumer driven society.

    One of the reasons that the iPod took off and dominated is that it's an extension of the Mac community. The price of admission is a lot lower, too.

    Big corporations are hated more and more as they take over and homogenize every facet of public and increasingly, private life. This iPod tax smacks of the same dominating, faceless greed. With new-found success, is Apple becoming just like the others? Or has the mask finally fallen away?

    Apple, say it ain't so! It CAN backfire.

  1. chabig

    Joined: Dec 1969



    Bose? The company that marks up their products to astronomical prices to cover high-dollar marketing costs calling an iPod licensing fee excessive? Funny!

  1. BlueDjinn01

    Joined: Dec 1969


    Sounds suspicious to me..

    When the "Made for iPod" story first came out, I could've *sworn* that it was made clear that they were seeking 10% of the *profits*, not the actual revenue.

    Not saying whether this would be right or wrong, but it's certainly a far cry from 10% of the retail price!

  1. michaeljohn63

    Joined: Dec 1969


    I agree with Bose

    10% strikes me as excessive. I can't say I really know what comparable fees are, but this seems like a big money grab. When does this take effect? And what has Apple charged in the past? Think of all the revenue Apple has lost already. Is Apple suddenly waking up and saying "hey, we've got to make up for lost time, think of all of the fees we've already lost?" 1-2% seems low. 3-5% seems about right. Apple should get some kind of fee, because they created, not just the technology, but really, the entire market. The other reason it seems excessive is because Apple is already making a big bundle on store markup. My wife paid $159 for my Altec lansing iPod speaker ring. She bought it (like all of our iPod accessories) at the Apple store. How much did the Apple store mark that up? 25%? That would be my guess. So, now they are going to get an additional 10%? C'mon Apple.

    Maybe Apple knows this is excessive, and they want to weed out some of the vendors so they can move in with more Apple branded accessories. I mean, its sort of weird that there are no Apple-branded speakers for the iPod.

  1. DudeMac

    Joined: Dec 1969


    Bad Apple!

    Leave it to Apple to ruin a good thing!

  1. ronjamin

    Joined: Dec 1969



    For Apple to, in effect, penalize companies for promoting the iPod is stupid. Apple is right to try to make money any way it can. I'm not sure whether 10% is too much or not, but it doesn't seem to be sitting well with people I talk to.

    I am getting the feeling that the old Apple attitude is creeping back. Just recently, I called AppleCare and was transferred to some illiterate in India who couldn't understand me. I had to repeat my telephone number over 10 times before I hung up. Another stupid maneuver: outsourcing customer service.

    Then, I had to wait over 45 minutes to drop off a computer for repair. Apparently, the Apple Stores require you to see a "genius" when you already have a case number from a phone-tech call. Again, stupid.

    The bottom line is that Apple is on a roll. They are trying to make the best of the "halo effect" of the iPod. And, frankly, I am getting the feeling that they are getting in over their heads and the quality that I am used to is slowly slipping away. Just my thoughts.

  1. ender

    Joined: Dec 1969


    This is stupid

    This would seeem to be a very stupid move on Apple's part. I think one of the smartest things Apple did was create the dock connector. It's another way to ensure repeat customers. Every dock connector accessory someone buys makes is that much more likely the person will buy another iPod so they can continue using their accessories. That's one of the things I hate about cell phones, having to buy new accessories if I switch phones (sometime even when I get another phone from the same manufacturer).

    iPod accessories are already expense enough the way it is. Adding another 10% would hurt sales, I think. And manufactures might just decide to make one version of their stuff for all MP3 players by using the headphone jack instead. Bad for consumers (less elegant) and bad for Apple (less iPod "lock-in"). Tempting for manufacturers because they don't have to create two different versions of their accessories.

  1. vickys_box

    Joined: Dec 1969



    The Made for iPod program is a self-certification program that vendors choose to use. It doesn't stop vendors from making products that work with iPods.

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