Apple: Bully For You?

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In This Issue:
1. Editor's Note: Apple: Bully For You?
2. Today's Top Story
    - Feds Want AT&T Class-Action Spy Suit Dismissed
    Related Stories:
    - Microsoft, California Government Agencies Settle Antitrust Case
    - RIM Co-CEO Says Visto Litigation 'Brazen Strategy'
3. Breaking News
    - Firefox Updated With Critical Security Fix
    - Apple Woos PC Users With Latest Ads
    - New IM Worm Operates Differently
    - Most Companies Fail To Plan For Supply-Chain Disruption: Study
    - Gartner: Don't Expect Vista Until 2Q 2007
    - ISO Approves OpenDocument Format
    - Borland To Cut Staff By 20%
    - Microsoft To Replace Counterfeit Office
    - Microsoft Research Probes Future Technologies
    - 5 Technologies You Need To Know About
    - Oracle Unwraps RFID Edge Server Upgrades
4. Grab Bag
    - The Battle For The Box (The New York Times - reg. required)
    - The Microsoft Malaise (Marketwatch.com)
    - The Best Of The Worst (WSJ.com)
5. In Depth: Net Neutrality
    - U.S. Finance Companies May Throw Their Clout Behind 'Net Neutrality'
    - Net Neutrality Amendment Dies, Supporters Continue Battle
    - Net Neutrality Debate Heats Up
6. Voice Of Authority
    - Sun's R&D Chief Gets Out His Magnifying Glass
7. White Papers
    - Get Off The EDI VAN—Without Re-Engineering Your Business
8. Get More Out Of InformationWeek
9. Manage Your Newsletter Subscription

1. Editor's Note: Apple: Bully For You?

There's no doubt that Apple is flying high.

In addition to muscling <>a sweet deal with the industry's four largest music distributors (Universal Music Group, Warner Music Group, EMI Group, and Sony BMG Music Entertainment) to continue selling songs in its iTunes store for $.99, its brawl with France, over whether copyrighted work like music on iTunes needed to be interoperable, was for all practical purposes mooted.

If three times is the charm, Apple must have the champagne chilling in preparation for a victory in its ongoing legal tussle with the Beatles.

For iTunes fanatics, this is a mixed blessing. The good news, of course, is that the cost of individual music downloads remains affordable. The bad news is that Apple's much-loathed proprietary digital rights management scheme will remain firmly in place. Mixing his metaphors but nonetheless capturing the spirit of what has transpired, Ted Schadler at Forrester Research was quoted as saying, "Apple has all the cards, and when you have all the cards, you can play hardball."

With 45 million iPods sold and iTunes representing more than 80% of the digital downloads sold in the United States alone, Apple is now the 800-pound gorilla in the digital music world. Tim Lee of Techliberation argues that the music industry created a monster when it demanded a strong DRM system for iTunes music. Because it locks music lovers into Apple's proprietary platform, Apple may soon be able to bypass the record labels completely and cut deals with artists themselves.

But is Apple shooting itself in the foot by maintaining its proprietary standards? "We've seen this movie before," says Michael Robertson, founder of MP3tunes, which provides individuals with a "personal music locker" with online storage that works within iTunes. Robertson was referring to the fact that a company that has created an industry often gets sidelined to a bit part in that very market. Indeed, Apple doesn't have to look far for an example of this. But "it's just not in [Jobs'] DNA" to open up, says Robertson. It's therefore inevitable that other device makers will eventually catch up, and other services will deliver cheaper, easier-to-use, or flashier functionality. As a case in point, Napster unveiled a free, advertising-supported Internet music service just this week.

Others argue whether the flat download fee is really as good for consumers as it seems on the surface. As Reuters points out in an investment note, the scheme the record labels favored--charging more for more popular songs--might in the long run have been better for music buyers. After all, 45% of all music is purchased by people 35 and older. As they're arguably interested in buying songs from the back catalogue, in the long run they may end up paying more per download at the $.99 rate than if they'd been offered discounts for the older, less popular tunes.

This discussion is obviously not over yet, and more music models will inevitably make their mark.

What do you think? Please let me know at my blog entry.

Alice LaPlante
[email protected]
www.informationweek.com

2. Today's Top Story

Feds Want AT&T Class-Action Spy Suit Dismissed
The Electronic Frontier Foundation filed a class-action lawsuit in California in January, accusing AT&T of cooperating with a government surveillance program. The U.S. Department of Justice responded with a notice stating that it plans to intervene to protect military and state secrets privilege, as well as request the lawsuit's dismissal.

3. Breaking News

Firefox Updated With Critical Security Fix
The patch fixes a zero-day critical security hole that could be used to crash the browser or install malicious code.

Apple Woos PC Users With Latest Ads
Without actually mentioning Windows, the video ads make their message clear: The Mac is better at networking, avoiding viruses and crashes, and running so-called lifestyle applications like watching and editing video.

New IM Worm Operates Differently
A new worm spreads via instant messaging, plants a bot on hijacked PCs—and does it all in a way that's difficult, if not impossible, to track.

Most Companies Fail To Plan For Supply-Chain Disruption: Study
Only 33% of companies surveyed acknowledged they would be prepared to keep supply chains moving if the global flu epidemic hit, says a new AMR study.

Gartner: Don't Expect Vista Until 2Q 2007
Microsoft says all versions will be out by January, but Gartner says it will take a few months longer than that.

ISO Approves OpenDocument Format
The International Standards Organization's nod to ODF gives the anti-Microsoft forces more fodder.

Borland To Cut Staff By 20%
Most of the 300 layoffs will come from a restructuring of Borland's international operations, the company said.

Microsoft To Replace Counterfeit Office
The company will offer free replacement copies of its Office application suite for people whose versions were tagged as counterfeit—if they can prove they bought the bundle with the best intentions.

Microsoft Research Probes Future Technologies
Thanks to sensor-based systems, users may soon be able to find nearby restaurants and then pinpoint those with the shortest waiting list.

5 Technologies You Need To Know About
Keep your eye on these innovative hardware and software solutions with the potential to change all the rules.

Oracle Unwraps RFID Edge Server Upgrades
Oracle Sensor Edge Server, an important piece in Oracle Fusion Middleware 10g, lets companies integrate a variety of products from existing IT infrastructures with RFID and sensor networks.

All Our Latest News

Watch The News Show

In the current episode:

Stephanie Stahl With 'John Chambers Is A Smart Guy'
Interop keynote speaker John Chambers spells out his vision of convergence.

John Soat With 'Best Of Interop'
John interviews Interop grand-prize winner Doron Meirom from Crescendo Networks.

Stephanie Stahl With 'Convergence Now!'
Lenny Heymann from Interop tells Stephanie it's the consumers that are pushing convergence forward.

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4. Grab Bag: News You Need From Around The Web

The Battle For The Box (The New York Times - reg. required)
The latest salvo in the war between Microsoft and Google centers around the search box in the latest beta of the Internet Explorer browser. This editorial argues for a fair fight between equals to ensure healthy competition for the market.

The Microsoft Malaise (Marketwatch.com)
John Dvorak explains why Microsoft is losing its iron grip over the technology world.

The Best Of The Worst (WSJ.com)
A trip down memory lane revisits the silliest ideas from the dot-com era.

5. In Depth: Net Neutrality

U.S. Finance Companies May Throw Their Clout Behind 'Net Neutrality'
Broadband providers' efforts to charge Web sites for premium network access could add billions in costs just to maintain current offerings, said financial companies, which wield a lot of clout in Washington.

Net Neutrality Amendment Dies, Supporters Continue Battle
A congressional committee drew rapid fire Wednesday after killing an amendment to preserve network neutrality.

Net Neutrality Debate Heats Up
A House of Representatives task force is holding a hearing Tuesday on whether the Internet should operate like a utility, with equal service, or whether providers should be able to provide tiered access and pricing.

6. Voice Of Authority

Sun's R&D Chief Gets Out His Magnifying Glass
An overlooked aspect of the much-remarked-upon CEO switch at Sun is Jonathan Schwartz's order for a wholesale engineering review of all technology projects over the next three months, says Aaron Ricadela.

7. White Papers

Get Off The EDI VAN--Without Re-Engineering Your Business
Conducting B2B transactions using IP software solutions (as opposed to electronic data interchange value-added networks) can deliver substantial benefits without costly re-engineering.

8. Get More Out Of InformationWeek

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