AllThingsD » DRM

DRM Firm Sues Apple After Patent Talks Flop

John Paczkowski — Wed, 20 Mar 2013 20:21:31 +0000

Intertrust is looking for another big paycheck.

On Wednesday, the digital rights management pioneer slapped Apple with a broad patent infringement suit that encompasses most of its products and services.

Filed in federal court in Northern California, the suit alleges infringement of 15 Intertrust patents across everything from iOS and Mac hardware to services like iTunes and iCloud. It was brought against Apple after the two companies failed to reach a licensing agreement. And Intertrust is taking Apple to the mat in a pretty big way. Not only does the suit seek preliminary and permanent injunctions against further infringement and a reasonable royalty for Apple’s continued use of Intertrust technology, it requests pre- and post-judgment interest on those royalties and a judgment of willful infringement. Such a judgment would triple damages levied against Apple.

“No other entity uses Intertrust technologies so extensively at so many levels of its enterprise,” the company said in its suit.

Intertrust is not messing around. And while this is clearly yet another case of royalty negotiation though litigation, it’s not one to be taken lightly. Intertrust may not be a household name, but the companies that license its technology include Sony, Samsung, HTC, Motorola and Microsoft. The last name in that list is the most important one, because Microsoft — like Apple — refused to license Intertrust’s IP. Intertrust sued Microsoft in 2001, and in 2004 it squeezed a $440 million legal settlement and licensing deal out of the software giant.

Which is not to say that Intertrust is likely to win a similar victory over Apple. Just that it has prevailed in cases like these in the past. If Apple has refused to license Intertrust’s IP, it obviously has good reason to do so. It’s just not clear if it feels it owes Intertrust lower royalties than the company is demanding, or none at all.

Apple declined comment on the Intertrust suit, citing its policy of not commenting on pending litigation.

Sonos Schools the Dock With New Software Update

John Paczkowski — Wed, 05 Dec 2012 08:01:27 +0000

With the launch of its proprietary Lightning dock connector, Apple pushed a number of accessories designed to work with its iOS devices into obsolescence, and sent their manufacturers scrambling to integrate its new connection standard.

Some manufacturers, anyway. Others have decided that the future of docking doesn’t involve a dock at all. Case in point: Sonos, the company responsible for the wireless multiroom audio system of the same name. After quietly killing off its own wireless dock in September, Sonos is today rolling out an update to its software that serves exactly the same function.

Sonos 3.8.3 transforms the devices on which it runs into networked drives that can stream the music stored on them to a Sonos system. And it gives them the same functionality as a standard Sonos library. In other words, you can play different tracks or playlists in different rooms, or the same ones in multiple rooms. That’s something Apple’s AirPlay wireless streaming protocol can’t do (yet), which is presumably one reason why Sonos isn’t using it (another is Apple’s AirPlay certification program). It’s not using Bluetooth, either. According to a company spokesperson, the app simply reads music off an iOS device and streams it to Sonos players over the network they create — in its native digital format.

Sonos 3.8.3 supports most, but not all, popular audio formats — MP3, AAC and Apple Lossless files, among others. It doesn’t support WAV or AIFF, or any tracks protected by a digital rights management scheme. Obviously, it does not play well with Apple’s iTunes Match music locker service, either.

Still Sonos’ latest software seems an elegant solution for the dock dilemma created by Apple’s move to Lightning, and a far better option than line-in for listening to music from your iPhone — or a friend’s — over a Sonos system.

New Way to Stream Music Crosses the Pond

Katherine Boehret — Tue, 19 Jul 2011 23:31:16 +0000

Until last week, mentioning Spotify to some music fans in the U.S. was like dangling a cream-filled doughnut before a kid barred from eating sweets. Spotify’s music-streaming service was only available in the United Kingdom and Europe, and it seemed Americans would never get to try it.

[ See post to watch video ]

Finally, last Thursday, Spotify became available here—but only by registering on its website and waiting for an invitation, which may take several days to receive. I’ve been using Spotify (a cross between “spot” and “identify”) to see what all the hype is about.

I found Spotify runs remarkably fast and does a good job of incorporating Facebook friends and their playlists—as long as they, too, use the service. Spotify could stand to improve in music discovery, as it doesn’t allow searching by genre or editors’ picks, nor does it make suggestions as you type into its search box—a useful feature if you don’t know the full name of an artist or song. Spotify’s ability to play the exact song you want rather than a collection of similar songs gives it a leg up on the likes of Pandora, but it also makes users do more work finding songs to play.

Spotify is a software program that must be downloaded and installed on a Mac or PC—it doesn’t run in a Web browser like many of its competitors. Spotify lets users search for and play specific songs from a music library of over 15 million tracks. It also imports local music files from your computer, displaying them along with the music in Spotify’s extensive library.

The options for streaming songs on Spotify on the left; the People list on the right lets users see and share music with friends on the service.

To mark the U.S. launch, people who sign up for Spotify now get a free account for the next six months that offers unlimited tracks and unlimited hours of listening. Afterward, people already registered will get 10 hours of music a month and five plays per track free of charge. People who don’t sign up now will be restricted to 20 hours of play for the first six months; after that, 10 hours of listening a month with five plays per track. All free accounts include ads.

Spotify subscriptions are available, including an ad-free, unlimited play, $5 a month account. There’s also an ad-free, unlimited play $10 a month account that enables listening to playlists offline and taking music to portable devices.

Spotify’s rivals don’t offer the wide selection of songs and free streaming at the same time. Apple’s iTunes has over 14 million tracks—almost as many as Spotify—but doesn’t offer streaming options beyond 90-second clips of songs. The Pandora Internet-radio service allows free streaming, but it has just 800,000 tracks and doesn’t let its free-account holders play specific songs—only “radio stations” customized around music that’s similar to a chosen song, artist or genre. MOG, Rhapsody and Rdio offer free streaming for trial periods. Like Spotify, both MOG and Rdio charge $5 or $10 for ad-free listening, and their $10 versions enable playing music on portable devices.

I downloaded and installed Spotify on a Windows PC and on a Mac, and in both instances the software speedily imported my computers’ music and sorted it into a Local Files category. A What’s New category has a New Releases section that suggests content based on an algorithm that combines new releases and artists that are most popular on Spotify. A feed of social-networking suggestions from Spotify and your Facebook friends are also displayed in What’s New.

While an Internet-radio service like Pandora creates radio stations on the fly that play a steady stream of music (with ads in the free version), Spotify uses a Play Queue, which is a list of songs from playlists and tracks you find and add. Play Queue consists of any song you drag or right-click and add to it. Any playlist you open and start playing, regardless of whether you created it, got it from a friend or found it on a website where Spotify playlists are shared (like Spotiseek.com) will be added to the Play Queue.

Using Facebook Connect, Spotify users can see a list of Facebook friends who use the service. The People list is displayed in a right-side panel, along with a Facebook profile photo for each person. By clicking on each friend’s name, I saw their public playlists and was able to click a button to subscribe to each list and add the songs to my Play Queue. I could also see each person’s Top Tracks and Top Artists.

People can opt to hide all of their Spotify account information from public view or make it all public. They can make certain aspects of their account public, like Top Artists or a playlist that they particularly like and want to share.

I easily shared songs with friends by dragging track names and dropping them onto a friend’s name on the People list. A message window popped up in which I wrote a note about the shared song that was sent via Spotify’s internal messaging system. An inbox in the top left corner of Spotify indicates new messages.

Another pop-up window lets people share songs via Facebook, Twitter, Spotify itself or Windows Messenger. But my friends couldn’t click on the shared link to listen to songs unless they downloaded Spotify. This is one of the big disadvantages of Spotify not running in a Web browser.

I tested Spotify’s mobile app on an iPhone, but it also works on the iPod Touch, iPad, Android and Windows Phone and WebOS devices. By connecting the iPhone to the same Wi-Fi network as the PC that had Spotify installed, my music—including playlists I made and tracks I bookmarked with a star icon on the PC software—synched over to the iPhone.

If you tend to choose music according to what your friends like and a lot of your friends use Spotify, you won’t likely have a problem with discovering music in Spotify. Otherwise, you may be frustrated by the relatively limited What’s New music selection. Overall, using this service feels a bit like someone opened a vast library of digital music and made it free for unlimited listening—at least for now.

Watch a video with Katherine Boehret on the Spotify music-streaming service at WSJ.com/PersonalTech. Email katie.boehret@wsj.com.

Corrections & Amplifications

A previous version of this column stated that iTunes has 30-second song previews instead of 90-seconds.

Mr. Jobs Would Be Happy to Respond if Someone Could Please Remind Him What FairPlay Was

John Paczkowski — Tue, 22 Mar 2011 21:24:49 +0000

“We are stunned that RealNetworks has adopted the tactics and ethics of a hacker to break into the iPod, and we are investigating the implications of their actions under the DMCA and other laws. We strongly caution Real and their customers that when we update our iPod software from time to time it is highly likely that Real’s Harmony technology will cease to work with current and future iPods.”

–Apple July 2004

Has the dispute over the FairPlay Digital Rights Management technology Apple once used in iTunes really dragged on this long? Impossibly, it seems it has. More than three years after the company discontinued its use, the now six-year-old lawsuit is back in the headlines again. The judge hearing the case on Monday ordered Apple CEO Steve Jobs to testify, Bloomberg reports.

Under the terms of the mandate, Jobs must sit for a two-hour deposition, answering questions about a 2004 software update that that made songs purchased from RealNetworks unplayable on the iPod, thwarting Harmony, the software RealNetworks developed to mimic FairPlay and outraging iTunes user Thomas Slattery who sued Apple in 2005 (for further detail, see the ancient posts I wrote about these issues for GMSV below). “The court finds that Jobs has unique, non-repetitive, firsthand knowledge about the issues at the center of the dispute over RealNetworks software,” U.S. Magistrate Judge Howard R. Lloyd wrote in a court filing.

Which is almost certainly true.

But at this point, who cares? Aside, that is, from the folks who in 2005 accused Apple of “rigging” the iPod so that only music purchased from iTunes could be played on it. Evidently, they’d still like to be able to play RealNetworks files on their iPods.

Reached for comment, Apple declined. Below, some very dusty background on the case …

Yeah, you’re Real alright … real annoying …

In a recent e-mail to Steve Jobs, RealNetworks CEO Rob Glaser asked the Apple CEO to consider a “tactical alliance” with his company. License us your Fairplay digital rights management system, allow our customers to play their digital music collections on the iPod, wrote Glaser, and we’ll make the iPod our primary device for the RealNetworks store and for RealPlayer software.

It was an astonishing offer, especially coming from Glaser, who had been a vocal critic of Apple and its decision to make digital music sold through its iTunes store playable only on iPod (“I bought an iPod and can only shop at one store,” Glaser once said. “What is this? The Soviet Union?”) But it was an offer that Jobs found unappealing. The Apple CEO rebuffed Glaser, declining even to meet with him over lunch to discuss it. So Real’s announcement today of a new technology that makes its online music service compatible with the iPod isn’t likely to go over well at Apple HQ. This morning Real rolled out RealPlayer 10.5 and with it Harmony, technology that will allow people to play music purchased at its Rhapsody store on Apple’s iPod as well as music players that support only Microsoft’s WMA (Windows Media Audio) format.

For Real this is quite a coup, and one that, assuming it’s not thwarted by Apple, may well give it a much needed leg up in the online music market. “This is very important for RealNetworks, because it overcomes one of the biggest issues they have had: lack of popular device support,” said Michael Gartenberg, an analyst with Jupiter Research. “It’s the device that drives the music store, not the other way around. Now the challenge is for Real to provide a compelling reason for users to come over–an extended catalog, more attractive pricing. It has solved the technological problem. Now it has to persuade customers from a content perspective.”

Hey, I’ve got a great idea! Let’s do an online petition!
When Real Networks’ launched its “Hey Apple, Don’t Break My iPod!” petition, it hoped for an outpouring of support for its new Harmony technology, which allows consumers to download music to all new music devices, including the iPod. What it got instead was a merciless tarring and feathering that will no doubt give the Real PR team nightmares for years to come. Appended to the hundreds of digital signatures on petition were hundreds of comments, most of them critical of Real, its technology and its business practices.

“When Real makes their songs available for sale to Mac users, then we can talk about limiting choice,” wrote one signatory. “Hulk smash Real player!!! Apple good for strong bones!!!! Glaser weak, Hulk Strong. Hulk smash Glasers head with fist for insulting Hulks intelligence!!! Hulk Smart!!! Glaser Dumb!!!,” wrote another. Not all of the comments added to the petition were so staid or tongue in cheek. “Selling on a loss to gain market share might work for large profitable giants with money to burn,” wrote one signatory. “But for a worthless company like Real, with history of losses quarter after quarter, it is a short-cut to Chapter 11. And I say more power to Real, please spend your way to bankruptcy ASAP. The whole market will heave a collective sigh of relief and your 49c customers will get what they paid for, support or rather lack thereof, from a bankrupt company.”

Its first petition gone horribly awry, Real launched a second, this one with comments disabled. But it too drew the ire of those viewing it and inspired an alternate petition that pretty much captured the spirit of the entire debacle.

Google's 42nd Acquisition of the Year: Widevine

John Paczkowski — Fri, 03 Dec 2010 23:00:44 +0000

Back in January, Google CEO Eric Schmidt predicted the company would make one acquisition a month. Now with the year nearly finished, the company has made 41–including Phonetic Arts, whose purchase it announced earlier today. Many of the buys were deemed “not material individually,” but the significant ones numbered in the high 20s. That’s more than double Schmidt’s original forecast, and Google’s clearly not through yet. Moments ago, the company announced the acqusition of video optimization outfit Widevine for an undisclosed price.

“We’re pleased to announce that we’ve agreed to acquire Widevine,” the company said in a post to its blog. “The Widevine team has worked to provide a better video delivery experience for businesses of all kinds: from the studios that create your favorite shows and movies, to the cable systems and channels that broadcast them online and on TV, to the hardware manufacturers that let you watch that content on a variety of devices. By forging partnerships across the entire ecosystem, Widevine has made on demand services more efficient and secure for media companies, and ultimately more available and convenient for users.”

For Google, which ramped up its video efforts with the launch of Google TV last month, the acquisition is an important one for bolstering its streaming video offerings. The Seattle-based Widevine specializes in digital video optimization and digital rights management, and its services are used by everyone from Netflix and NBC.com to AT&T.

Interesting to see Google snapping up a video DRM company (Widevine did Flash DRM before Adobe), considering its purchase of On2 last year and its subsequent release of On2′s VP8 video codec as an open standard (something that did not go over well at MPEG-LA, the consortium that controls the AVC/H.264 video standard).

"UltraViolet" Is Short for "Giant Media DRM Cloud Coalition Featuring Everyone Except Apple and Disney"

Peter Kafka — Tue, 20 Jul 2010 10:49:54 +0000

Small steps! The Digital Entertainment Content Ecosystem, a coalition of tech and entertainment companies that’s supposed to create a seamless, cloud-based, consumer-friendly media network, now has a brand name: “UltraViolet.” And a logo, too.

Next step is getting the thing up and running. But the DECE, which has nearly 60 companies signed on and has been working on this stuff for a couple years, says it’s getting closer.

By the end of this year, it promises to have tech specs and licensing details ready to go. So perhaps you’ll have a piece of equipment with this icon in your living room in 2011:

Then there’s the real question: Will you have any interest in this stuff?

The DECE is either wildly ambitious or unwieldy and destined to fail, depending on your perspective. And it’s also a little nebulous and hard to explain.

But the gist is that it creates a system that allows you to consume movies, TV shows, etc., on a variety of devices. And it’s supposed to manage the confusing world of digital rights management–the media companies’ lock-and-key system–via a Web-based account, so that you don’t have to think about it.

That’s not a terrible pitch, right? But this supposes that a group featuring everyone from Microsoft (MSFT) to Intel (INTC) to Sony (SNE) to Time Warner’s (TWX) Warner Bros. can work together to produce a decent consumer experience. If you’re skeptical about this, you’re not alone.

And DECE’s other big problem is the absence of two companies: Apple (AAPL) and Disney (DIS). The latter is creating Keychest, its own, equally confusing cloud-based DRM management scheme. And the former is, well, Apple.

Steve Jobs’s go-it-alone approach to software and media standards has worked out pretty well for him so far. Hard to see that changing. And hard to see an industry standard that doesn’t work with Apple getting much traction. See: Windows Media Audio.

Netflix: There's a Movie Waiting on Your iPhone

John Paczkowski — Tue, 04 Aug 2009 15:26:14 +0000

Among the 1,000-plus new features included in Apple’s iPhone 3.0 is a new open standard for live video streaming over HTTP, and soon, Netflix will make use of it. Well, that’s the rumor anyway.

An industry executive said to be familiar with the company’s plans tells Multichannel News that Netflix plans to extend its Watch Instantly video-streaming service to the Nintendo Wii and to the iPhone and iPod touch as well.

It’s not entirely clear how the company plans to bring Watch Instantly to the iPhone. Presumably, it will use a native iPhone app, since the device doesn’t support Silverlight, Microsoft’s (MSFT) Flash-esque also-ran.

That said, there are some hurdles to negotiate there since native video streaming on iPhone 3.0 doesn’t yet support digital rights management.

Another issue likely to prove problematic: Bandwidth. Watch Instantly streaming typically requires a fair bit of bandwidth and might prove problematic over 3G connections. AT&T (T), which hobbled SlingPlayer Mobile for iPhone over bandwidth concerns, will probably see things that way. Which means Netflix’s app, if it is indeed in development, will be limited to Wi-Fi like the SlingPlayer.

Beyond that and the DRM issue, there’s not much more I can think of to prevent such an app from being brought to the iPhone. There’s not much overlapping content between Watch Instantly and Apple’s iTunes service. And even if there was, there’s no real rivalry here that might inspire Apple to block Netflix’s (NFLX) service. iTunes is run pretty much at break-even to support sales of Apple (AAPL) devices. And a Netflix app for iPhone would arguably help Apple do that as well.

Netflix: There's a Movie Waiting on Your iPhone

John Paczkowski — Tue, 04 Aug 2009 15:26:14 +0000

Among the 1,000-plus new features included in Apple’s iPhone 3.0 is a new open standard for live video streaming over HTTP, and soon, Netflix will make use of it. Well, that’s the rumor anyway.

That said, there are some hurdles to negotiate there since native video streaming on iPhone 3.0 doesn’t yet support digital rights management.

Think You Own the Book You Bought for Your Kindle? You Don't, Says Amazon.

Peter Kafka — Fri, 17 Jul 2009 19:50:33 +0000

Buy an e-book for Amazon’s Kindle recently? You might want to check to see if it’s still on your device. Kindle users are complaining that the e-commerce giant has removed titles from their machines this week and given them refunds in their place.

What happened? The details are fuzzy, but apparently, a publisher that supplied Amazon (AMZN) with two George Orwell titles has decided that it doesn’t want to sell them via Amazon anymore. So away they went.

Readers described their experiences at this Amazon forum, and one of them included this note she said she received from Amazon customer service explaining what happened:

The Kindle edition books Animal Farm by George Orwell. Published by MobileReference (mobi) & Nineteen Eighty-Four (1984) by George Orwell. Published by MobileReference (mobi) were removed from the Kindle store and are no longer available for purchase. When this occured, your purchases were automatically refunded. You can still locate the books in the Kindle store, but each has a status of not yet available. Although a rarity, publishers can decide to pull their content from the Kindle store.

Normally, I’m pretty cavalier about the complaints that people make about the evils of digital rights management–the locks and restrictions distributors often attach to digital media like music, movies and books–but this is the sort of incident that gives those gripes some gravitas. If you’re buying bits, you ought to own those bits, just as you would when you plunk down dollars for a CD, a book or any other physical item.

Doubly confusing: As far as I can tell, Amazon’s license terms don’t have any loophole that allows for this. The section on “digital content” explains that I don’t have the right to “sell, rent, lease, distribute,” etc., the stuff I buy from Amazon. But it sure looks like stuff I buy, I keep:

Upon your payment of the applicable fees set by Amazon, Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times, solely on the Device or as authorized by Amazon as part of the Service and solely for your personal, non-commercial use. Digital Content will be deemed licensed to you by Amazon under this Agreement unless otherwise expressly provided by Amazon.

So, what am I missing here? I’ve asked Amazon for comment, but if anyone has any bright ideas, sound off in comments below.

UPDATE: Amazon says the copies it sold were “illegal”, because the publisher never had the rights to them. But it says that going forward, it won’t be removing books from customer’s Kindles “in these circumstances”.

EMusic's New Boss Is the Same as the Old Boss

Peter Kafka — Tue, 02 Jun 2009 17:34:24 +0000

The eMusic subscription music service site, which specializes in nichey tunes for the “High Fidelity” set, has signed a deal to start carrying Sony’s (SNE) back catalog.

But I have a question: Whatever happened to eMusic’s search for a new CEO?

David Pakman, who ran the company since 2005, left last fall to join Venrock, the Rockefeller family’s venture capital arm. Last I heard, in late October, the company was “looking at a handful of very qualified candidates” to replace him. And in the meantime, eMusic Chairman Danny Stein–who runs the investment company that owns eMusic and who ran eMusic himself prior to Pakman–was serving as interim CEO.

So who’s the new boss? Same as the old boss. It’s also old news.

Stein says that’s he’s going to run the company for the foreseeable future, and that he figured that out way back in December: He just never announced it. “It was an easy decision to make”, he says.

Stein says he saw plenty of “very capable people” but figures, a la Dick Cheney, that he was the right man for the job. He also says that the various headhunting companies who say they’re helping eMusic find a new CEO are doing so without his knowledge (or dollars).

Fair enough! The bigger question, as it has been for many years, is how eMusic fits into the larger digital music ecosystem. It sells DRM-free MP3 downloads, which some consumers like, via a subscription service, which most consumers don’t enjoy. Stein says the company has around 400,000 subscribers, and that that number has remained stready for a while. But he says his topline revenue still grew 40 percent last year, to $70 million. (No word on profits or lack thereof).

That’s a pittance compared to Apple’s iTunes (AAPL) store, which moves about $2 billion worth of songs every year. And while eMusic was once a couple of signatures away from selling to Amazon (AMZN), that window looks like it’s closed, as the retailer launched its own MP3 store a year ago.

But perhaps there’s still an M&A opportunity for eMusic for a different retailer that wants to get into digital goods; Best Buy (BBY) did something similar when it bought up Napster last year.

Rubinstein and McNamee: Remaking Palm

John Paczkowski — Thu, 28 May 2009 19:14:42 +0000

What a wonderful curative the Palm Pre has proven to be for Palm. Especially considering that the device has yet to ship. In early January of this year, the company’s shares were trading below $3, having been dragged deep into the mud by a string of nasty quarterly losses. Five months later, after the Pre’s announcement at the Consumer Electronics Show, they’re trading at over $10.

And Jon Rubinstein and Roger McNamee are largely responsible for that. Rubinstein is an Apple (AAPL) veteran who’s now Palm’s (PALM) executive chairman. And McNamee, managing director of Elevation Partners, is the guy who recruited him for that position. Together, they’re remaking Palm in a bet-the-company move to recover its long-lost glory. Should be an interesting session.

Session Highlights

[ See post to watch video ]

Live Blog

A couple pieces of Palm-related breaking news before we begin. Verizon Wireless (VZ) CEO Lowell McAdam this morning said the company intends to sell the Pre about six months from now. Also, the Pre will reportedly sync with iTunes.
This session is prefaced by video of a faux-advertising shoot in which McNamee makes increasingly preposterous claims about the Palm Pre over Rubinstein’s protestations. It’s funny as hell, and not all that far off from reality if you know the company’s recent history. McNamee, as you may recall, made some silly claims about the Pre’s prowess in a March interview with Bloomberg–so silly that Palm was forced to file a Free Writing Prospectus with the SEC refuting them. So to hear McNamee boast that the Pre is the only handset based on alien technology–well, I wouldn’t be surprised to read that in Bloomberg tomorrow.
While the audience is still chuckling, Walt and Kara welcome Rubinstein and McNamee to the stage.
Walt kicks things off by noting Palm’s history of developing breakthrough devices and asking how the company’s doing now. “We hired a lot of new people into the company,” says Rubinstein. “Palm is a new company today….Palm had tremendous assets. The DNA is there. The way of thinking about great products is there.”
Walt asks McNamee about his claim that all iPhone owners with expiring contracts will switch to the Pre. At what time will that happen? “4:25 p.m,” quips McNamee.
What’s the depth of Elevation’s involvement in Palm? Pretty deep. McNamee says that because the opportunity at the company is so huge, he spends a lot of time on it. He notes that leaders in the smartphone market–Palm and RIM–each have very small market share. That means there’s a great opportunity for Palm to join them. “I wish I had the entire fund in Palm,” he said. “This is the thing that will define us.”
Kara asks how Rubinstein came to Palm. He says it was a compelling idea to take something that needed to be turned around and rebuild it. “It’s so rare to be able to start with a blank sheet of paper and start over. And we were given a blank sheet of paper with the device and the OS. The old Palm OS lasted 15 years but had run its course. We set out to develop a platform that will last us another 10 or 15 years.”
What lessons from Apple has Rubinstein brought to bear on his new work at Palm? “I worked with Steve for many years and learned a tremendous amount from him, the value of user experience and design–taste. I also learned the idea of great marketing…On the engineering side, I helped create the engineering culture at Apple, so obviously, the engineering culture at Palm bears some similarities to it.”

On to the demo. Discussing the idea of synergy–managing information across applications and multitasking. Multiple apps can be run at the same time. Not an infinite number, Walt notes, but quite a few.
On to media. MP3 player includes onboard support for Amazon’s (AMZN) MP3 Store. Files are downloaded directly over the air to the device. Very slick.
Plug the Pre into a PC and you’re offered the option of using the device as a USB drive, charging it or beginning a “media sync.” Interesting, using media sync, the Pre does indeed sync with iTunes, though it’s hamstrung by Apple’s DRM-protected songs. Can’t imagine that Apple’s too happy about that. Presumably, Apple legal is already drafting a letter. Pre appears to make iTunes think it’s an iPod.

How is Apple going to feel about that, asks Walt. Rubinstein dodges a bit, noting that there are a variety of ways of getting music out of iTunes. Walt pushes back, pointing out that this is the first non-Apple device that is recognized as an Apple device by a Mac. Rubinstein dodges again. Seems he’s pretty obviously using his Apple knowledge here. McNamee jumps in. “I don’t think so,” he says. “They are practically a monopolist and this is what consumers want. Consumers own all this media. I find it hard to believe that Apple will get bent out of shape.”
The media sync feature also works with iPhoto and syncs photos to the Pre. That’s not likely to go over well at Apple either.
Moving on now to WebOS, Palm’s new operating system. The key feature is the Web App Catalog, Palm’s analog to Apple’s App store. Palm will have just a dozen or so apps in the store when the Pre launches next week. Kara jokes that Palm should simply port all the apps in the Apple’s App Store over to its own store.
Rubinestein and McNamee demo a download of Fandango. Tap to download. App is downloaded over the air. Apps do not sync with iTunes, they’re stored on the device.
Fandango on the Pre looks and works pretty much as it does on the iPhone and the BlackBerry. It does have an interesting additional feature or two. A simple gesture adds a movie time to the calendar. Tap the screen and the Pre’s calendar ingests info from Fandango. Pretty elegant integration with the Pre’s core applications.
Moving on to universal search. Very slick and something the iPhone lacks. Search for D7 on the Pre device yields no results, but the user is offered the option of searching Google (GOOG), Twitter, etc., for the same query. The Twitter search reveals the following Tweet about iTunes syncing: “Apple may not like this, but it’s damn cool.” Indeed.
McNamee says the model here is “When in doubt just type.” Simple. Elegant.
When the demo ends, Walt asks about Palm’s competitors. Clearly Apple and RIM (RIMM), says Rubinstein. He adds that the battle that’s going to be fought is not about hardware, but software. McNamee interrupts to say the opportunity here is to persuade people to move from the “feature phone” to the integrated device. Apparently, the iPhone is a feature phone and the Pre is the integrated device here. McNamee going on and on about the Pre’s design. Feels great in the hand. The Pre has a mirror. “Never before has a device like this been designed for a woman.” Nice, Roger. Perhaps someday it will include a blow dryer as well.

Walt asks about the Pre’s keyboard, Rubinstein says that there are a lot of people who want keyboards. Applause from the audience. That said, the iPhone’s lack of a keyboard clearly hasn’t hurt it in the market.
More talk about McNamee’s “women like mirrors” comment. McNamee says device makers typically do not target the female audience. They traditionally target a male, testosterone-driven audience. McNamee seems to think the Pre will appeal to a wider audience–one with a larger female contingent than the iPhone and BlackBerry. McNamee appealing to audience to confirm its love of mirrors…
How do you woo developers away from the iPhone? Rubinstein says Palm doesn’t need to. It’s easy to develop for the Pre. “We have a great SDK.” Walt notes that the SDK hasn’t been widely distributed yet and the Pre is just days away from launch. Rubinstein says this was intended. “We’re doing this methodically.” There are hundreds of developers with the SDK right now, and thousands in the queue waiting for it. Why? McNamee jumps in again and says the company wants to get it right, but seems to suggest that the SDK may not be quite as polished as Palm would like.

When the Pre debuts will there be a shortage? Walt cites varying rumors about how many handsets will be available initially. Rubinstein says the company is in full production now and shipping devices every day to Sprint (S). That said, he expects there may be shortages due to high demand.
On to the Q&A: When will there be a GSM version? Palm expects to have one at some point in the future. What about the Verizon deal, asks Walt, noting this morning’s Verizon story. Rubinstein says he can’t comment. We do love Sprint and they are our exclusive launch partner,” Rubinstein said. “It sounds like AT&T (T) and Verizon both want it. I can’t comment on unannounced relationships.” He notes that BellMo will distribute the Pre in Canada.
Questioner wants to know about overlapping features in Pre, iPhone ? Yes, says McNamee, refering to the Pre’s EAS. As a generalization, everything you’re used to in an iPhone will be in the Pre as well. And if it’s not there initially it will be there soon.
Does Palm worry that Apple might break the Pre’s iTunes sync feature? McNamee doesn’t seem to think so. “We’re recognizing their market dominance…and they can’t tell people what to do with their music.
McNamee on his investment in Palm and the Pre: If I could have put everything into it, I would have.
End of Q&A

A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as we were able. It was not intended as a transcript and should not be interpreted as one.

Kindle Hikes Book Prices and Adds to My Ambivalence

Dan Gillmor — Mon, 11 May 2009 15:49:46 +0000

Just when I was coming to terms with my ambivalence toward my Kindle e-book reader, Amazon and the publishers have gotten greedy.

I’ve had a love-hate relationship with the device since I bought my first one about 9 months ago. As a frequent traveler and voracious reader, I’ve found the Kindle to be nearly ideal. I never have fewer than a dozen books in its memory, and they’re always things I want to read.

As someone who believes we should often interact with media instead of passively consuming it, however, I don’t think much of the Kindle for any purpose other than reading a narrative. And given what a disaster “digital rights management” (DRM) is becoming for scholarship, culture and ultimately freedom, the device’s restrictions on how I can use what I’ve purchased are deeply troubling.

Still, I’ve been using it with some degree of satisfaction (as have enough other people to have helped boost Amazon’s stock price, so as the holder of several hundred shares I’m slightly better off in that way, too). The second-generation model improved nicely on the first–among other things, fixing some user-interface quirks, letting me charge it via a USB cable, and boosting the battery life.

The books I load onto the device fall generally under the casual entertainment category. I buy a Kindle book the way I buy a movie ticket (or did before going to theaters became such a crappy experience).

These are books, like most movies, that I’ll read or watch once and forget about. A physical book is more like a DVD–something I want to own and enjoy again and again.

So the kinds of books I tend to buy for the Kindle are the sort I’d often pick up at an airport newsstand, namely mysteries, thrillers and semi-trashy novels that I’d sometimes leave in hotels or airplane seat-back pockets once I’d finished them. (I also subscribe to several magazines, and consider it a favor not to see the advertising.)

Once I got accustomed to reading e-books, I started doing something that had been out of character in the analog era: buying new books that, in print, were available in hardcover only. Why? The price, typically $10 (okay, one penny less), was right. In fact, my new-book purchases soared.

But not for long. In recent weeks, Amazon (AMZN) or the publishers (or both) have done their best to deter me from buying the latest releases. Prices have gone up, way up.

Now, I often find books for which I’d have gladly paid $10 listed at $14 or $15. I save these to a list I keep on the Amazon website, called “Too expensive for Kindle,” and periodically check to see if the price has dropped. So far, not yet on any of these.

Hiking prices this way creates a bad deal for the customer. Amazon’s price for a new hardcover is typically just a couple of dollars higher. This means I could buy the hardcover, read it and donate it to my local library, and–after the tax deduction–come out ahead. I’d do even better taking the book to my local used-book store and getting cash.

But I almost never buy new hardcovers of books I don’t expect to reread or use as a reference, because a) I’m kind of cheap; and b) I can stand waiting for the paperback. So if prices stay high, I stay away.

Now, sellers have every right to charge more for popular books, especially when they’re new. This is basic supply and demand. But when the price only makes sense for people who consider the ultra-portability of an e-book paramount, that’s a turnoff for other potential buyers.

As a customer I also understand supply and demand. My demand is extremely elastic, and in this case it’s snapped.

Last week’s introduction of the Kindle DX was framed in many ways by different constituencies, but I was taken aback by the praise heaped on the device by several newspaper people, including the CEO of the New York Times Co. (NYT) (in which I also own a small amount of stock). Newspapers aren’t going to fix their considerable woes with Kindles, and anyone who thinks so lives in a fantasy world.

The DX, with its bigger screen, strikes me as potentially useful in several ways, possibly including the textbook function that Amazon hopes to jumpstart with the help of several universities (including the one that employs me). But if textbook publishers don’t radically cut prices on the outrageously expensive books they sell, they will find themselves creating a strong incentive for precisely what they don’t want: unauthorized copying.

I suspect the DX will prove most useful in more prosaic ways. For example, it could be a nearly ideal container and viewer for technical documentation–thick manuals that need periodic updating, where the cost of printing is prohibitive and the bulk of the books is daunting for the user.

Will all of this be made moot by the widely anticipated Apple (AAPL) “NetPad” or whatever it’s going to be called? I refer to a device that looks like a larger version of the iPod Touch, which would be a wonderful mobile multimedia player, among other likely capabilities.

I doubt it. If you enjoy severe eye strain, reading books on a back-lit, glossy display is just the ticket. The passive displays on Kindles, the Sony (SNE) e-reader and other such devices are much better for this kind of reading.

One size does not fit all in the emerging world of devices. Then again, one carry-on bag doesn’t hold all devices. For now, however, the Kindle has a place in mine.

Apple: Steve Jobs Is Still Fine, and We Still Hate Netbooks

Peter Kafka — Wed, 22 Apr 2009 22:07:30 +0000

Next to no news from the Apple earnings call this afternoon, which is just the way Apple execs like their earnings calls. Once again, the company provided no information about CEO Steve Jobs’s health except to note that he is still scheduled to come back to work in June. And the company continued to pooh-pooh the concept of netbooks–supercheap, supersmall laptops with very little horsepower that are the hottest part of the PC business right now.

But COO (and temporary CEO) Tim Cook’s dismissal of the netbook market will continue to spark speculation that the company is readying something that sits in between a laptop and an iPhone (which is itself a computer, of course). Silicon Alley Insider’s Dan Frommer got more of Cook’s response than I did so I’ll reprint his quote here:

“When I look at what is being sold in the netbook space today, I see cramped keyboards, terrible software, junky hardware, very small screens, and just not a consumer experience and not something we would put the Mac brand on. So it’s not a space–as it exists today–that we’re interested in, nor do we believe that customers in the long term would be interested in. That said, we do look at the space and are interested in how customers respond to it. People who want a small computer than does browsing and email might want to buy an iPod touch or iPhone. We play indirect basis. Then of course if we find a way where we can deliver an innovative product that really makes a contribution, then we’ll do that. We have some interesting ideas in this space.”

EARLIER:

Apple (AAPL) just turned in a strong quarter and followed it up with conservative guidance. A fairly typical performance for the company. Now investors will want to know about new product lines, Steve Jobs’s health and other matters. I’ll be covering the call live. Please refresh this page for the most current information. Click here if you want to listen in yourself.

Joining call now. Tim Cook CFO Peter Oppenheimer going over info that’s already in the release.

Mac products: 2.2 million Macs, a three percent decline year-to-year. Tough comparison from last year. But better than the seven percent drop in PC sales overall. “We feel very positive about our Mac performance.” Began and ended quarter with three-to-four weeks of Mac inventory.

iPod: People still buying ‘em! iPod touch selling well, and so are apps. Claims people like the new shuffle player. [Dubious about that]. We own the MP3 player market. [Duh.] Began and ended the quarter with four-to-six weeks of inventory.

iTunes store: 35,000 apps available in store, up from 15,000 a quarter ago. “We are within hours” of one billions app downloaded.

iPhones: Unless I’m missing something, absolutely no new data here. Praising new iPhone 0S 3.0 that’s in the works. Apple delayed the start of revenue recognition of all iPhones sold after the company announced the new OS, which was March 17. Will start up again once OS is released.

Stores: Half our Macs sold to people who had never owned one before. Average revenue per store is down year over year, because the economy is lousy.

Gross margins: Commodity and other component costs lower than expected. Higher-margin sales better are also than expected. Apple also spent less on operating expenses than expected.

Guidance: Forecasting is “challenging” in macroenvironment. Again, noting delay in revenue recognition for iPhones (see above). Excited about new products in pipeline, etc.

Q&A

Outlook for pricing on component supply? Mostly favorable, but some commodities, like NAND, will increase sequentially. Cook does not expect to see the level of reduction seen in calendar Q1. Will it be down? It will be “in a similar range as last quarter.”

Cash flow issues? Not really, for several reasons: 1) Apple made prepayment to…. [sorry, I didn't catch who that was]; 2) accounts payable were down, from holiday quarter to spring quarter, which is standard; 3) at $1.3 billion, tax payments were up “significantly” from last year.

Mac business: Desktops selling well, but average selling price down quite a bit. What’s going on? Sales accelerated in March after Apple announced new product launch. Higher-end Pro products sold to professionals are down a bit, which is related to economy for obvious reasons. Education sales also down a bit, for same reasons. Hoping Federal stimulus funds will help with that.

Back to netbooks–why won’t Apple sell them? Cook is still criticizing netbooks. The ones available today are ”just not a consumer experience and not something we would put the Mac brand on, quite frankly. It’s not a space today that we’re interested in, and it’s not a space we think that customers in the long-term are interested in.” But… a slight hedge with regard to smaller computers, which are, of course, what the iPhone and iPod Touch are. We “have interesting ideas in this space.” Today’s netbooks really shouldn’t even be called computers, really.

App store: What’s the mix between paid and free downloads and the iPod and iTouch mix? Nope. Apple won’t say. Again, Cook notes that we’re just “hours away” from the one billionth download. Cook: One of the keys behind the growth of iPod has been that sales of the iPod touch “more than doubled year-over-year.” The iPod and iPod Touch have reached sales of 37 million units, a big platform for developers. So there’s a virtuous cycle there.

[Sorry, missed two questions here.]

Why is Apple still doing an exclusive with AT&T for the iPhone? And how’s Steve Jobs? AT&T (T) is the best wireless provider in the U.S. “They have done a very good job with iPhone….We’re very happy with the relationship we have and do not intend to change it.” Structurally, we’re using GSM architecture, and Verizon (VZ) uses CDMA, and we wanted a world phone.

And Steve Jobs? Apple CFO Peter Oppenheimer: “We look forward to Steve returning to Apple at the end of June.” [Translation: No news.]

[Yet another question missing here. Apologies.]

Any info on DRM-free/”iTunes plus” sales? Too early to tell.

How much impact did Wal-Mart (WMT) have on Apple sales? Very key partner for the iPod. The company believes Wal-Mart provides extended reach. Pleased with results, but “early going, and not much to report there yet.”

So many iPhone Apps. How can you make them easier to find on iTunes? (Same problem as music.) Any kind of unusual patterns? Nonanswer here.

Please talk about competition for smartphones–i.e., please discuss the Palm (PALM) Pre. “Difficult to comment on products that aren’t shipping. So there’s nothing intelligent I could say on the Pre.” But “we think we’re years ahead.” We see things through software lens and that has benefited us and customers very well. Power of device and ecosystem enormous and we’re now just scratching the surface.”

What about suing Palm re: patents on the Pre, etc.? “We think that Apple’s innovation is leading the industry by years. We think competition is great; we think it makes all of us better as long as other companies invent their own stuff.”

Consumers Want to Rip, Burn DVDs

Marisa Taylor — Fri, 17 Apr 2009 15:22:11 +0000

Apple’s (AAPL) iTunes makes saving music from CDs onto one’s personal computer a simple process, but doing the same with a DVD is much more complicated endeavor. Most DVDs are encoded with digital rights management technology to prevent copying.

Most DVD viewers think that’s hypocrisy. A study of 1,000 consumers conducted by the National Consumers League found that 90 percent think that they should have ability to back up DVDs on their personal computers in the same way they are able to do with music from a CD.

Read the rest of this post on the original site

Macworld '09: Behind the PhilNote

John Paczkowski — Wed, 07 Jan 2009 19:00:19 +0000

[ See post to watch video ]

Macworld '09: One Last Thing–DRM-Free iTunes Plus, 3G iTunes and Tony Bennett

John Paczkowski — Tue, 06 Jan 2009 18:27:56 +0000

Looks like today’s keynote will include a “One More Thing” moment after all, even without Steve Jobs to deliver it. And it will focus on iTunes. Three big updates to the iconic software today.

Three new pricing tiers in April: $.99, $.69 and $1.29
iTunes Plus eight million songs DRM-free today. By the end of this quarter, all songs will be DRM-free in iTunes Plus
Finally, the iTunes store will be available to iPhone and iPod touch users via Wi-Fi AND 3G networks beginning today.

This is a big step for Apple (AAPL), says Phil Schiller, and a big step for music. And with that, he welcomes Tony Bennett to the stage to close out Apple’s final Macworld. Bennett’s first song: “The Best is Yet to Come,” followed quickly by a second, “I Left My Heart in San Francisco.”

After a few parting words from Schiller, the keynote address ends. No jaw-dropper announcements, no cameo appearance from Jobs, but a good keynote just the same. Schiller did his boss proud, I think.

MacWorld 2009 Keynote Photos: iTunes and Tony Bennett

View photos at SmugMug

Confirmed: iTunes Going DRM-Free. Unclear: Does Anyone Care?

Peter Kafka — Tue, 06 Jan 2009 14:43:42 +0000

In 2007, Apple CEO Steve Jobs predicted that half the music offered at his iTunes store would be sold without digital rights management–the lock-and-key system that the music labels wrap their songs–by the end of that year. But until this week, only one big label–EMI Music Group–was selling iTunes music in a DRM-free format.

Better late than never: Apple (AAPL) has deals in place with three of the big music labels–Warner Music Group (WMG), Sony (SNE) and Universal Music Group–to sell DRM-free songs. In exchange, Jobs will give the labels some ability to introduce “flexible pricing”–a key demand for the industry. CNET’s Greg Sandoval reported the news yesterday, citing sources; I’ve confirmed with my own industry sources this morning. Expect an announcement this week; the logical timing would be during today’s MacWorld keynote. [UPDATE: Here's the press release]

You’ll be hearing a lot of hubbub in the Techmemeworld about the move: DRM has been one of the tech world’s biggest bugaboos. If you believe the people who write blogs and leave blog comments (please do!), the fact that the labels have sold their music with DRM has been a drag on iTunes sales.

But I don’t think that’s the case: Apple moves some two billion songs a year via iTunes, and unless you’re in a small minority of people who want to do something with your iTunes song other than listen to it on your computer, iPhone, or iPod, you’ll find it hard to butt heads with a DRM restriction.

In the real world, few people have even heard of DRM. That’s one reason why the fact that Amazon’s (AMZN) Jeff Bezos has sold DRM-free music for all of 2008 doesn’t seem to have helped the company even dent Apple’s commanding market share. And think about it this way: Who’s more eager to sell digital music–Steve Jobs or the struggling music labels? If DRM-free tunes were a cure-all, you would have seen the big guys moving to drop it a long time ago.

The bigger news here is the move to add flexible pricing to the iTunes store. The labels have long pushed for the ability to mark up certain songs above the 99-cent mark, and Jobs hasn’t given in (he initally sold EMI’s DRM-free songs for a premium, but ended that after a few months). Neither CNET nor I have details about the pricing, but expect three tiers: One for in-demand songs, one for “long tail” back catalog and one for midrange stuff.

If Apple and the labels play this right, the tiered pricing could move the needle. But it won’t be at the high end: While there’s some opportunity to squeeze a few more cents out of the buyers who absolutely have to have the new Beyoncé song, the real opportunity will be selling lots and lots of music at a steep discount.

That’s if the labels go ahead and offer music at a significant discount, which I think they will be reluctant to do, for various reasons (more on that later). But let’s hold off and see what the pricing actually looks like first.

UPDATE: Expect the following tiers: $0.79, $0.99 and $1.29 per track, I’m told. [Update: Make that $0.69, $0.99 and $1.29] Disappointing but understandable: I’d like the labels to sell most of their music for 50 cents or less; they think their best music is worth much more than $1.29.

UPDATE 2: Also coming to iTunes: Over-the-air downloads for iPhone 3G users.

Amazon's MP3 Store, One Year In: No iTunes Killer; Probably Won't Be

Peter Kafka — Mon, 15 Dec 2008 16:58:15 +0000

Amazon has been selling digital music from all the big music labels for nearly a year now. It’s the first major challenge to Apple’s hammer lock on that business. So how did it do?

If you view Amazon’s MP3 store as a would-be iTunes-killer, or even a would-be iTunes rival, it has failed miserably. Neither Amazon (AMZN) nor its big label partners–Warner Music Group (WMG), EMI Music Group, Sony (SNE) and Universal Music Group–is publicly releasing any sales numbers. But the best estimates I’ve been able to get from label executives give Amazon 5-to-10 percent of the digital music market, with Apple (AAPL) hanging on to its 70+ percent share.

Billboard reaches the same conclusion, pegging Amazon’s market share at eight percent. Lucas Gonze, a smart digital music guy who spent a brief stint at Yahoo (YHOO) after it acquired his start-up, does some back-of-the-envelope math and concludes that Amazon’s store contributed all of $82 million to the music business, and that Universal collected most of that. That same math means that Amazon grossed all of $39 million from its music store.

And while Amazon’s presence–and the fact that all of its music was sold as MP3s, meaning there were no DRM locks on the songs–was supposed to give the labels more leverage when they negotiated with Apple, we have yet to see Steve Jobs make any significant changes in his contracts.

But the labels would still rather have Amazon in the game. The fact that the world’s biggest e-commerce company is in the music business does have some tangible benefits, like giving players an easy way to get into the music business: Both News Corp.’s (NWS) MySpace and T-Mobile’s new G1/Google (GOOG) phone, for instance, use Amazon to sell downloads. There’s no way Apple would have worked with either platform.

And Amazon can afford to lose money as it figures out its digital media strategy–the company logged nearly $4.3 billion in sales last quarter alone. Right now, it seems content to serve a handful of dedicated MP3 fans/anti-DRM zealots who are actively shunning Apple. But I’m guessing Jeff Bezos and crew have bigger ambitions. So when do we see what those look like?

Rent. Rip. Restraining Order.

John Paczkowski — Mon, 06 Oct 2008 18:38:41 +0000

The legal broadside Hollywood lobbed at RealNetworks (RNWK) last week has upset the company’s carefully prepared plans to offer a mainstream means of legally copying DVDs. A judge has issued a temporary ban on sales of Real’s RealDVD software in the wake of a lawsuit brought against it by the Motion Picture Association of America. Point your browser at the RealDVD site today and you’ll be greeted with the following message:

Due to recent legal action taken by the Hollywood movie studios against us, RealDVD is temporarily unavailable. Rest assured, we will continue to work diligently to provide you with software that allows you to make a legal copy of your DVDs for your own use.”

Good luck with that, folks.

As I’ve noted here before, RealDVD is a nice idea–a $30 software program that easily copies entire DVDs, right down to the menus, bonus features and cover art. And it does so in an ostensibly legal way. What it doesn’t do, though, is prohibit users from ripping DVDs that they rent. Effectively, users are on the honor system, which isn’t exactly a Hollywood-approved DRM scheme.

One–Make That Two–Words: Plastic Logic

John Paczkowski — Mon, 08 Sep 2008 18:00:07 +0000

[ See post to watch video ]

Rent. Rip. Return.

John Paczkowski — Mon, 08 Sep 2008 14:19:24 +0000

RealNetworks Inc. (RNWK) CEO Rob Glaser calls RealDVD, the company’s new “legal” DVD ripper, “a compelling and very responsible product that gives consumers a way to do something they have always wanted to do.” But really, what it’s giving them is a more cumbersome way of doing something that they’ve already been doing for years now with DVD Decrypter, AnyDVD, Handbrake, MacTheRipper, RipIt and the like.

Like other DVD rippers, the $30 software program easily copies entire DVDs–right down to the menus, bonus features and cover art. But unlike those rippers, RealDVD does so in an ostensibly legal way. It copies them without breaking their digital rights management schemes by installing a second layer of DRM on the ripped files that prevents users from sharing the DVDs online.

What it doesn’t do, though, is prohibit users from ripping DVDs that they rent. Effectively, users are on the honor system. And last I checked, the honor system isn’t a Hollywood-approved DRM scheme.

Steve Jobs at WWDC 2008: iPhone 3G for $199, on Sale July 11

John Paczkowski — Mon, 09 Jun 2008 16:59:39 +0000

Apple’s much lauded iPhone captured 28 percent of the smart-phone market in the States by the fourth quarter of 2007–just six months into its launch. Today it holds something less than that–about 19.2 percent. But to look at the headlines, you’d think it controlled the market in its entirety. A quick search on Google returns 19,035 results for “iPhone”– from Jun. 2, 2008 to today. Why? Because in a few hours, Apple CEO Steve Jobs will address the company’s Worldwide Developers Conference in San Francisco, at which he is expected to unveil the next version of the company’s iPhone.

And for Apple’s (AAPL) sake, I hope he does. Because with expectations running this high, I’d hate to see what happens if he doesn’t. Although the new Apple Store housed in a life-size replica of the Golden Gate Bridge pictured in the invite would certainly take some of the heat off …

Anyway, I’ll be live-blogging from inside Moscone West in San Francisco starting at 10 a.m. PDT. Here’s something to read while you wait …

From Moscone West: This is crazy. They just opened a single door to let cameras in and the media rushed the gate. Its like that 1979 Who concert in Cincinnati.

The hall in Moscone West is filling quickly to the sounds of Jerry Lee Lewis. From the looks of it media and developers are here in equal numbers.
Jobs takes the stage. I’m sitting about 20 rows back, but even I can see he’s looking pretty thin from here. He gets right into it, pulls up a slide of a stool and describes Apple as a three-legged company. Macs, music and the iPhone.
Jobs will spend the morning talking about the iPhone. This afternoon Apple will discuss OS X “Snow Leopard.”

Talking about iPhone SDK: In the past 96 days, 25,000 people have applied to Apple’s paid developer program. It’s had 250,000 downloads of the iPhone 2.0 software SDK.
Three parts to iPhone 2.0: enterprise, SDK, “new features.”
Apple has built exchange support into iPhone 2.0: push email, push contacts, push calendar, auto-discovery, global address lookup, remote wipe. Also supports Cisco VPN security.
Everything enterprise has told us they’ve wanted in the iPhone, we’ve built into it right out of the box, he says.
35% of Fortune 500 companies have participated in iPhone 2.0 beta: top five banks, securities firms, 8 of 10 top pharma companies, 6 of 7 leading airlines. Lots of support from higher-ed market as well.
Cutting to video now: Execs from Disney (DIS), Genentech, U.S. Army discussing iPhone 2.0 beta: all of them talking about the extraordinary demand for the iPhone among their employees.
“iPhone 2.0 is extraordinarily well-integrated with Microsoft (MSFT) Exchange.”
Video goes on: Talking about security now. Army rep talking about how important remote wipe is. Disney exec describes iPhone as “an enterprise-level device that packs the power of a laptop into a device the size of a phone.” Video ends.
Moving on to iPhone SDK. Jobs welcomes Scott Forstall to the stage to discuss the SDK. “We’re opening up the same developer tools we use internally,” he says. “Developers will create applications in exactly the same way we do.”
Core OS: Core operating system of iPhone uses the same elements as OS X. Offers a quick overview of Cocoa Touch, Xcode, Interface Builder, Tethered Debugging, Instruments and other developer tools, before moving on to a quick demo of Interface Builder.
Launches Xcode and creates a new project in Xcode. App will use built-in address APIs as well as core location APIs to locate contacts within a 10-mile radius of the iPhone.
He opens Interface Builder and drags and drops some buttons and fields onto an iPhone test screen on his desktop.
The UI finished, he opens the iPhone simulator to test it out. It works.
He links the UI features up to the code he’s written and bang, it’s linked up and ready to go. That’s it.
Forstall says developer response to the iPhone SDK has been enormously positive. He refers to a number of developer quotes that really lionize the platform: “It blows away anything we’ve seen from RIM” says one.
Forstall invites a Sega rep up to the stage to demo some of their work for the iPhone. Sega’s Ethan Einhorn offers a bit of background on their Super Monkey Ball project. He notes that the company was able to demo an early version of the game after just a few weeks of work at the iPhone SDK launch announcement. Now, after a few more months of work, they’ve managed to create a full-featured version of the game.
Super Monkey Ball will be available at the launch of the App Store for $9.99.
Up next: eBay’s Ken Sun. The iPhone has become the No. 1 mobile device for accessing eBay, Sun says.
Six weeks ago, eBay began developing a new interface for the iPhone and was able to quickly pull one together.
The application supports auction watching and bidding. Bids placed on an iPhone are instantly registered in eBay’s system. The eBay app will be available for free when the App Store launches.
Loopt’s Sam Altman takes the stage to talk about the company’s location-based social-networking app: “We make serendipity happen.” Pffft. He pulls up the app and uses it to locate a friend and a list of the thing’s she’s done today. He notes that the friend is close by at a cafe and sends her a quick message asking if she’s available for lunch.
Next up: TypePad and its mobile blogging application. Michael Sippey takes the stage and after talking up TypePad as a blogging platform, he moves on to the company’s new iPhone app.
Demo will focus on photoblogging. He browses the photos on his iPhone, selects a picture, crops it, adds it to a blog post, publishes it to his blog, taps view and Safari launches and displays his new post. Very fast, very slick. Oddly, no mention of a cut-and-paste feature.
This app will also be available at the launch of the App Store for free.
Associated Press follows TypePad. AP’s Benjamin Mosse describes AP’s Mobile News Network, which uses the device’s location API to provide location-based local news, photos and video.
The app also supports citizen journalism and permits AP readers to send the news agency their own photos and news reports. This app will also be available for free at the launch of the App Store.
Next up: Brian Greenstone from Pangea software. The company has ported two of its games from OS X to the iPhone.
The first is Enigmo. The second is Cromag Rally–a 3D caveman racing game. The graphics in both games look great. Greenstone notes that in this particular game, the iPhone itself is the controller–in this case, the steering wheel.
Greenstone really talking up the SDK, says porting the game was almost a no-brainer.
Forstall welcomes Moo-Cow-Music’s Mark Terry to the stage to demo Band. It’s a collection of virtual instruments that allows users to create music on the iPhone. He pulls up a keyboard and plays the first few bars of John Lennon’s “Imagine.”
He moves on to a drum kit, and then to a “blues interface” that includes all the instruments you need to play the blues. And now the bass; he plays a few bars of Pink Floyd’s “Money.” He notes that tracks can be recorded and mixed together to create songs individually or collaboratively.
Onstage now is Jeremy Schoenherr from MLB.com to demo an app developed exclusively for the iPhone. The app offers real-time updates of game info and also nearly real-time video highlights. Videos will reportedly be uploaded minutes after a play is made.
Next: Modality, which will demo the first of two apps designed for the medical industry. S. Mark Williams takes the stage to talk about a learning application for med students. Looks like they’ve created an iPhone version of “Netter’s Anatomy.” All the graphics have been ported to the iPhone, and you can zoom in and out, and use touch to locate different areas of the body, the same way you use the Google maps application. Modality says that within weeks of the App Store launching, it will be offering this application as well as others for different education markets.
Mark Cain from MIMvista onstage now. Looks like we’ve got a medical imaging application. Onscreen now is a CT scan and a PET scan overlaid on an iPhone screen. (My god, this is really cool.)
The application relies on the iPhone’s pinch, slide, touch and drag to navigate images. You can also toggle to a planar view as well. Whoa–it supports movies as well. Cain stresses that this is a highly complex and computing-intensive application that’s been ported to the iPhone. And his company was able to do it with relative ease.
Up now: Digital Legends to demo another game. They’ve developed Krull, a fantasy action game, on the iPhone. Accelerometer is used to move the character, to jump, swing weapons, etc. The graphics are very impressive.
The person demoing notes that in some cases they’re better than those of handheld gaming platforms. The app will be available later this year. What we were just shown–which was damn impressive–was pulled together in just two weeks.
Forstall back onstage. He’s talking about one feature that developers have requested that wasn’t included in the SDK: The ability to run applications in the background as well as the foreground.
He pulls up a Windows Mobile task manager to demonstrate the wrong way to address that request. “This is nuts,” he says. Apple has come up with a far better solution: We’ve developed a push notification service.
Apple will maintain a persistent IP connection to the iPhone through which third-party applications can push notifications to the device. These can be badges, text notifications and audio notifications. There is also a unified push notification service for all developers that preserves battery life, maintains performance and works over the air. This will be available in September, but Apple will begin seeding it soon.
Jobs strolls back onstage to discuss some new features.
The first: Contact Search. Your standard contact search.
Second: Full iWork document support: pages, keynote. MS office support as well: Word, PowerPoint. (Cut-and-paste support?)
Third: Bulk delete and move.
Fourth: Save images from email.
Fifth: A landscape view of the calculator.
Sixth: Parental controls.
Seventh: Languages: there are two forms for Japanese, two forms for Chinese (simplified and traditional) including one that allows you to draw the characters with your finger. “One of the great advantages of not having a bunch of plastic keys on your keyboard,” says Jobs.
What about 8, 9 and 10? Cut-and-paste, chat and a better camera? No? Damn.
“iPhone 2.0 raises us to a whole new level,” says Jobs. “We’ll release it in July. It will be free to all iPhone owners, and $9.95 for iPod Touch users.
Moving on to the App Store. It will be on every iPhone, and it supports wireless downloads, automatic installs and automatic updates. Developers can set the price of their apps. Developers take 70%. No credit card or hosting fees. Apps will be DRM’d for FairPlay.
If a developer chooses to offer their app for free, Apple won’t charge them anything. Apps under 10 MG can be downloaded over the air. Apps above that size can be downloaded over iTunes or via Wi-Fi.
Apple has also developed an enterprise version of the apps store that will allow companies to distribute their custom applications only to their employees on their phones.
There’s another distribution method as well: Ad Hoc. Developers can mail apps to up to 100 users.
Now we’ve got something entirely new: It’s called MobileMe. Phil Schiller takes the stage to talk about it. What’s MobileMe? “It’s like Exchange for the rest of us.”
(Haha.) He just slipped up and called active sync “active stink.”
With MobileMe, iPhone users can have mail, calendar, etc. pushed to their phones. Information is stored in the cloud and then pushed to all a user’s Apple devices. Change a meeting on your phone, the update is pushed to MobileMe, which then pushes that update to your laptop and the machines of the people who are scheduled to attend it.
All this is done over the air. MobileMe works directly with Apple apps. It also works with Outlook for PC users. Apple has also built a suite of Web-based applications. You’ll find them at me.com. The applications look pretty robust. More like those you’d see on the desktop than on the Web.
Mail, contacts, calendar, photos–which can be sent directly to MobileMe from the phone–iDisk for storage.
He’s demoing it now: supports drag and drop. Also supports real-time contact search with links to Google (GOOG) maps for directions.
Calendar supports drag and drop as well. Want to reschedule a meeting? Drag it to another date and time.
Moves on to iDisk, which has a new interface. All this is tightly integrated with the iPhone. He checks a push email on his phone, saves the sender as a contact. Now he checks his MobileMe account online. The email and new contact are already there.
Now he creates a new calendar entry on his laptop. He check his phone and there it is. Now he leaves the iPhone view up on the screen behind him, walks back over to the laptop and adds another meeting to his calendar. A few seconds later, the iPhone screen updates with that new meeting. He demonstrates the same thing with a photo.
MobileMe will be available for $99 a year, with 20 gigabytes of storage. It will be available in July. And yes, MobileMe does replace .mac. Mac users will be automatically upgraded.
And what about that cut-and-paste support? No? Anyone? Bueller?
Jobs back onstage. In a few weeks, it will be the iPhone’s first birthday, he says.
He shows some photos of the crowds outside the Manhattan Apple store.
Jobs: “This is the phone that has changed phones forever.” He says the iPhone has 90% customer satisfaction; 98% of iPhone users are mobile browsing; 94% are using email; 90% are text messaging; 80% are using 10 features or more. “You can’t even find 10 features on other phones,” he adds.
Apple has sold 6 million phones so far, Jobs says. Now we need to address our next challenges:
1. 3G
2. enterprise support
3. Third party applications
4. more countries
5. more affordable.
Jobs notes that everyone wants one, but 56% of consumers Apple surveyed said it was too expensive.
iPhone 3G announced to roar of applause, camera flashes.
iPhone 3g is thinner, full plastic back, solid metal buttons, but same display, camera, a flush headphone jack, dramatically improved audio. “Feels even better in your hand, if you can believe that,” Jobs says.
How does the iPhone 3G tackle the challenges I just mentioned?
Video of EDGE vs. 3G pageload on Safari: 3G takes 21 seconds, EDGE still grinding away. Web site is National Geographic, very image heavy. EDGE still grinding; audience begins laughing. EDGE takes 59 seconds; 3G is 2.8 times faster than EDGE.
Jobs notes that 3G speeds approach those of Wi-Fi. Apple compared the iPhone 3G to two other state-of-the-art 3g phones, and the iPhone is 36% faster than Nokia N95 and Treo 750.
Video of same comparison with an email attachment: 3G downloads it in five seconds; EDGE takes 18 seconds. 3G is 3.6 times faster.
Talking about battery life now: iPhone 3G has 300 hours standby. 2G talk time: 10 hours; 3G talk time: five hours–that’s an industry-leading metric.
Five to six hours of browsing. Seven hours of video. Twenty-four hours of audio.
One other thing that benefits from fast data is GPS, and we’ve built that into the iPhone 3G, Jobs notes
Jobs talking about how location based services for the iPhone are about to explode. He’s demoing GPS tracking now. Jobs tracks a car driving down San Francisco’s Lombard Street.
Now, he circles back to enterprise support, third-party apps, and international distribution. Apple hoped to put the iPhone in 25 countries. World map appears on screen. Theme from “It’s a Small World” plays as countries in which the iPhone is distributed are quickly colored in. Half-hearted “Small World” sing-along fades after a few verses.
Lots of applause for this: “We’ll be rolling out the iPhone 3G in 70 countries over the next few months.” The next time you’re in Malta and you need an iPhone, it’ll be there.
Deals for all these countries are signed, sealed and delivered, according to Jobs.
Moving on to price: iPhone 3G will sell for $199 for 8GB version. Huge applause.
“With think at that price point it will be affordable for everyone,” Jobs says. The 16GB model will be $299 and will be available in black and white. Apple will start rolling the iPhone out in 22 of the largest countries on July 11.
on to a new ad: “It’s finally here. The new phone that beats the iPhone–it’s the iPhone 3G.”
The ad’s tagline: “Twice as fast. Half the price.” You can almost feel the early adopters in the audience wincing.
Jobs after ad ends: “Isn’t that nice? Would you like to see it again?” Audience roars; Jobs plays the ad again. “Just like the first iPhone, this new iPhone is one of the most amazing products I’ve ever had the pleasure of being associated with.” Jobs asks iPhone team to stand. Lots of audience applause.
Looks like that’s it. “Take advantage of the great sessions and go make some great products,” says Jobs. And the keynote ends. Sadly, there’s no “one more thing” moment today — no video-chat support, no chat support, no cut-and-paste.

"Comes With Music," DRM & Sony BMG

John Paczkowski — Tue, 22 Apr 2008 11:28:48 +0000

Sony BMG (SNE) has signed on to Nokia’s (NOK) new “Comes With Music” program and really, who better than the pioneer of the rootkit digital-rights management scheme to endorse Nokia’s DRM-hobbled prebundled music initiative?

This morning, Sony BMG became the second record label to jump on board the Finnish phone giant’s Comes With Music offering, which–when it launches in the second half of 2008, will package mobile phones with a year of unlimited access to music. There are, however, certain caveats to that value proposition, as I pointed out last December:

Though Comes With Music does indeed permit owners of certain Nokia cellphones to download as many songs as humanly possible in one year (with no per-song data charges), transfer them to a PC and keep them at the end of that time, they must pay a per-song usage fee to burn them to CD. What’s more, the songs are wrapped in Microsoft’s (MSFT) ironically named ‘Plays for Sure’ digital-rights management scheme, which prevents them from being played on the iPod, Zune, etc. Finally, another 12 months access to the music catalog requires the purchase of a brand new phone.”

Clearly, Sony, like Universal (VIV.PA) before it, doesn’t see these issues as off-putting to consumers. “When you give consumers the key to the candy store without any limitations, there’s a lot more opportunity for discovering music that you might not have found before,” said Thomas Hesse, president of global digital business and U.S. sales for Sony BMG Music Entertainment. “We think this will energize the discovery of music.”

It might energize Sony BMG’s bottom line a bit as well. When Universal first signed up for Comes with Music, sources close to the company said that Nokia would pay the label up to $35 for every phone that offers access to its library. Nokia subsequently denied it was paying that amount, but it’s definitely paying something–to Universal, Sony and whatever other labels it manages to line up for the service.

"Comes With Music," DRM & Sony BMG

John Paczkowski — Tue, 22 Apr 2008 11:28:48 +0000

Though Comes With Music does indeed permit owners of certain Nokia cellphones to download as many songs as humanly possible in one year (with no per-song data charges), transfer them to a PC and keep them at the end of that time, they must pay a per-song usage fee to burn them to CD. What’s more, the songs are wrapped in Microsoft’s (MSFT) ironically named ‘Plays for Sure’ digital-rights management scheme, which prevents them from being played on the iPod, Zune, etc. Finally, another 12 months access to the music catalog requires the purchase of a brand new phone.”

Here's an Idea: Make Them Edible

John Paczkowski — Tue, 22 Apr 2008 07:00:01 +0000

I hope DVD-D Germany Ltd. has a nice big landfill out behind its corporate offices, because it’s going to need it if its new disposable DVD technology takes off.

Produced with a chemical coating that renders them unreadable after 48 hours or so, the company’s Einmal (German for “once”) discs posit a play-once-and-toss model that, at a reasonably low price-point, could be a piracy-limiting means of distribution (the discs include no DRM, but why bother ripping them if they’re so cheap).

So it’s an interesting idea (though not a new one; Flexplay and SpectraDisc both tried something similar a few years back). Certainly the prospect of not ever having to worry about returning your latest Netflix (NFLX) or Inmotion Pictures airport rental could be quite appealing to some. But isn’t that an annoyance that video-on-demand is already doing away with? And really, who wants to increase their carbon footprint like this anyway?