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http://www.macnn.com/articles/03/10/17/apple:.ipods/

Apple: iPods not iTMS is central to profits

updated 02:25 am EDT, Fri October 17, 2003

 
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Apple said it doesn't have any illusions that it can make great profits from selling songs over the Internet: "Instead, Apple is counting on the store as a for the company that can produce substantial profits--mainly through sales of its iPod digital music player. 'The iPod makes money. The iTunes Music Store doesn't,' Apple Senior VP Phil Schiller told CNET News.com...Schiller said the music store is close to profitability but is still losing money. Apple doesn't see the business as having much long-term profit potential either."


by MacNN Staff

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  1. MacNN.com Reader

    Fresh-Faced Recruit

    Joined: Jul 2001

    0

    I'm disappointed

    that Apple doesn't make money off the iTMS on its own and instead relies on increased sales of the satellite product, iPod, to make up for it.

    Too many businesses carry loss-leaders at this time, the net effect being that potential competitors do not enter the market due to artificially-inflated barriers of entry and reduced margin potential. Hopefully the coming years will bring in a more positive business climate for entreprenuers.

  1. MacNN.com Reader

    Fresh-Faced Recruit

    Joined: Jul 2001

    0

    A Software Curse?

    Can we make the conclusion that Apple is unable to make a profit with/from software whether in the form of a product or a service?

  1. MacNN.com Reader

    Fresh-Faced Recruit

    Joined: Jul 2001

    0

    Record companies greed

    I guess it proves once again that record companies are unable to understand that they need to change their practices: bring the CD prices down and allow other means of distribution to viably exist.

  1. MacNN.com Reader

    Fresh-Faced Recruit

    Joined: Jul 2001

    0

    Re: I'm disappointed

    Apple is a hardware company believe it or not. To sell the hardware it needs to be useful. This is where iTMS comes into play. People can legally download music. People are happy and Apple keeps its business legit when people pay for the rights to use music.

  1. MacNN.com Reader

    Fresh-Faced Recruit

    Joined: Jul 2001

    0

    Dumbasses!

    How many times have I told you the iTMS is NOT ABOUT THE MONEY???

    If it just breaks even, Apple will be THRILLED. The iTMS is NOT about profit, it's about pioneering an entirely new way to serve up music that will change the distribution channel for good. It's about empowering artists to take more control of their own careers, and eventually ending the concept of "record companies" as we know them today.

    It's a PLATFORM. You know, guys, the Mac OS as a software title doesn't make any money either. Because that's *not what it's about.*

    The company will make PLENTY on the recently-TRIPLED sales of the iPod, and people switching to Mac as a result of iTunes/iPod/iLife. Windows people are starting to have serious respect for Apple, often for the first time in their lives. Once you own an iPod, you start to "get" what the Mac fans are always on about: the elegance. The simplicity. The style. The caring and the quality. It makes you look again at owning a Mac.

    That's Apple's plan. Now don't tell anyone. :)

  1. MacNN.com Reader

    Fresh-Faced Recruit

    Joined: Jul 2001

    0

    But there is more to it

    Every installation of iTunes for Windows includes Quicktime.
    While that doesn't necessarily generate money for Apple, it broadens the installed base of Apple software, making it easier to expand services. iMovieStore, anyone?

  1. MacNN.com Reader

    Fresh-Faced Recruit

    Joined: Jul 2001

    0

    the masterplan

    iTunes, iTMS and QuickTime today - the world tomorrow

  1. MacNN.com Reader

    Fresh-Faced Recruit

    Joined: Jul 2001

    0

    Dell is shocked!

    This is going to throw a wrench in their Music announcement, because now it will be measure against a standard that's twice as high as it was before.

  1. MacNN.com Reader

    Fresh-Faced Recruit

    Joined: Jul 2001

    0

    So when doe we get...

    ...the vPod - something I can SEE a photo, movie, images, animations, my porfolio on...

  1. MacNN.com Reader

    Fresh-Faced Recruit

    Joined: Jul 2001

    0

    how can others make $???

    Other download music companies that have sprung up recently offer music for even less the Apple's .99 cent per song. What is the difference in these companies' structure that will make them money and Apple can at best break even? Sorry Apple I just don't believe you.

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