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News

Report: Apple Changes "Made for iPod" License Program to Flat Fee [Update]

Apple Computer has changed the fee structure of its "Made for iPod" licensing program aimed at iPod accessories vendors who make products that connect to Apple's iPod 17-pin Dock connector. Australian magazine SmartHouse reported Wednesday that Apple has changed the fee for the program from a 10% of retail sell-in price (i.e. the wholesale price) to a flat US$4 fee.

According to SmartHouse, the move was made to make the program simpler for Apple to manage, but it is also one that favors higher-dollar product manufacturers -- such as those who make speaker solutions -- at the expense of makers of less expensive items such as FM transmitters and the like.

For instance, a $30 FM transmitter might have a wholesale price of $20, which would result in a $2 per-unit fee paid to Apple. The new structure would bump that fee to $4, which is a staggering 20% of the wholesale price. According to SmartHouse, most such licensing fees are set up to be in the 1%-2% range, though the publication doesn't source that opinion.

In addition to the "Made for iPod" licensing fee, manufacturers also have to buy the actual Dock connector from Apple, which is a separate charge. The Dock connector is controlled by Apple patents.

Apple has so far declined iPO's requests for comment on the story. Companies participating in the licensing program have also so far declined to confirm or deny the story for us, but sources familiar with the program have confirmed the gist of SmartHouse's report.

[Thanks to Macsimum News for the heads up on the SmartHouse article - Editor]

[Update: The story was updated with additional information regarding the licensing changes. - Editor]

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