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iTunes changes seen as 'only new news' at Macworld

updated 09:55 am EST, Wed January 7, 2009

Analysts on MW09

Only one real story came out of yesterday's keynote speech by Phil Schiller, write analysts with Needham & Co. Despite the announcement of new versions of iLife and iWork, as well as a 17-inch unibody MacBook Pro, the most important revelation is said to be the switch to DRM-free music and variable pricing at iTunes. Even this may have minimal impact, Needham suggests.

The firm notes, for instance, that while the major record labels attempted to pressure Apple into multi-tiered song pricing by dropping DRM restrictions at other online stores, this did little to improve their marketshare compared to iTunes, which has remained the most popular digital music source. Even Amazon has accumulated its significant share at the expense of stores other than iTunes.

The new pricing scheme could also backfire, at least for the labels, says Needham. Attaching higher prices to the most popular songs may drive more people to filesharing programs, thereby depriving both Apple and labels of revenue; dropping back-catalog songs to 69 cents may compensate somewhat, but Apple will have to pay labels less. As a consequence, the labels may have to sell as much as 40 percent more just to reach the break-even point.

Outside of iTunes, Needham does praise changes to iPhoto, which should increase the attachment of Facebook users through integration and face recognition support. A similar sentiment is expressed by Kaufman Bros. analyst Shaw Wu, who argues that iPhoto and the rest of the iLife suite should increase the "appeal and stickiness" of Macs.

Wu expresses disappointment with the rest of the keynote, calling it one of the "weakest" product introductions during the last 10 Macworlds. He remarks, however, that sources indicate new Macs are still forthcoming in the near future. Apple is either planning a separate event to reveal them, he suggests, or else the company is having trouble producing quality products at such a high rate. It may also want to bring out new Apple TVs and iPod shuffles to revive sales, according to Wu.

by MacNN Staff



  1. Darylal

    Joined: Dec 1969


    Very True

    17" MacBook Pro should have came out with the 15". iLife, well at least they came out with it (iLife 07 anyone?). iWorks online looks interesting though, but definitely not innovative and hopefully will go better then the .mac transition. All and all you think Apple could have had one more "One more thing" for all us old timer that remember the good old days. LOL

  1. bobolicious

    Joined: Dec 1969


    Juicing the stock...

    ...and evening out sales by keeping Apple in the news with frequent updates may be part of the plan - they do indeed have enough of a product matrix to perhaps have monthly 'roll outs'. This may please shareholders but fragment planning for users wishing to upgrade...

  1. MhzDoesMatter

    Joined: Dec 1969


    Fully convinced that...

    analysts are professional fanboys. I'm so glad Apple is leaving MacWorld.

  1. Roehlstation

    Joined: Dec 1969



    Only going to cost me $175 to upgrade all my iTunes songs to Plus, even if I just bought the song last week.....

  1. slider

    Joined: Dec 1969


    Soon I hope

    I'm holding out for a couple surprise announcements before the end of the month to kinda lunch the whole product-launches-on-our-time-table idea Apple indicated was part of their reason for leaving Macworld. Kinda like, "see, like this."

    I was really surprised not to see an iMac update, had held out for almost a year before buying an iMac prior to buying the minor refresh last summer thinking it was overdue then, but when they finally did update it it was kinda a hack. Don't get me wrong, I love it and am glad I finally called it and bought it, but the iMac is due. The mac-mini has been in the news off and on from dead to major update, but if any single piece of hardware from any consumer computer company is screaming for an update it's the mac-mini - last updated in August of 2007, crazy.

    I really think this was the lamest MWSF since the return of SJ.

  1. bjojade

    Joined: Dec 1969


    At least you can upgrade

    Sure, it costs to get rid of that pesky DRM. You may have to spend $175 to upgrade, but you already spent $600 on music, so it's not a huge deal. Plus the quality is higher.

    Personally, I prefer that Apple release products throughout the year instead of all at once. If they introduce everything at MacWorld, attention is only focused on the biggest item. If new products roll out each month, the stock boosts with each announcement.

  1. ff11

    Joined: Dec 1969



    There's no reason you NEED to upgrade your songs, but if you want to UPGRADE, why should it matter when you bought it?

  1. hayesk

    Joined: Dec 1969


    Real story?

    So let me get this straight? The iTunes move is the only "real" story but is said to have minimal impact?

    Then why is it a real story?

    The real story is that's it's stupid for people to expect that Apple plan all of their product releases around a trade show where date slippage is impossible. New iMacs, Mac Pros, and Mac minis are coming, but how can anyone expect them all to be ready for one day of the year?

    This is one of the reasons Apple won't be attending next year - the hype is greater than reality.

  1. Guest

    Joined: Dec 1969


    iPhone background push?

    What happened to iPhone background push services??? is that ever coming out?? it seems like Apple is starting to slip on it's promises. Didn't they say Lotus Notes was coming to the iPhone

  1. cmoney

    Joined: Dec 1969


    iTunes Plus Upgrade

    IS c***!! It's an all or nothing proposition. I have a few dozen free songs that I've downloaded over the years. I now have to upgrade those even if I listened to them once. I'd be happy upgrading maybe a dozen albums, instead I'm forced to spend close to $200 all at once.

    For those saying no one is forcing you to upgrade, you're partially right but that's a false argument. If you want to upgrade a small portion of your library, Apple IS forcing the inclusion of the rest of it.

    There is another option, I'll be forgoing the upgrade and doing a combination of downloading MP3s and ripping the burned CDs.

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