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Fortune Editor: iPhone is Real Reason Behind Steve Jobs DRM Letter

The real reason for the timing on Steve Jobs's open letter asking record labels to drop DRM is the iPhone, according to an editorial from Fortune magazine's Brent Schlender. Mr. Schlender suggests that Mr. Jobs' real motivation in going public with his DRM concerns is to get the Big Four music labels to renegotiate their music licenses so that Apple can allow iPhone users to download music directly from iTunes to their iPhone.

"From the get-go (once it goes on sale this summer)," wrote Mr. Schlender, "the iPhone as it is currently described will be prevented from directly downloading music or video itself, even though it is a wireless broadband-capable device."

While his wording is less than clear -- it is possible that iPhone users could download any media they can access through an ordinary URL through iPhone's browser -- as of now, iTunes will not be running on iPhone in such a way that allows customers to purchase music on the device.

"So the real question may be this," wrote Mr. Schlender, "could Jobs' eloquent plea on behalf of consumers all be a gambit to force Apple's content suppliers to renegotiate their deals and make it possible to download music and video directly onto the iPhone?"

The general consensus since Mr. Jobs's open letter appeared on Apple's Web site on Tuesday is that it is a direct response to Norway and other European governments demanding that Apple license FairPlay to other players in the digital media market.

While the letter certainly addresses those complaints fairly directly, Apple's public relations campaigns have certainly had a wheels-within-wheels-within-wheels aspect at other times. For instance, the public tit-for-tat squabble Apple had with IDG World Expos was in part an effort to gain control of the company's product release announcements, and Steve Jobs saying publicly that there's no money to be made from selling music online is thought to have been an effort to discourage competitors from entering the market.

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A guest said: (hide)

I think that's full of sh*t. You can download music to the iPhone directly (via cable). Just not wirelessly. What does he think the 'widescreen iPod' part of the iPhone is?

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A guest said: (hide)

Left wing Fortune hates companies that make money and employ people.

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A guest said: (hide)

It's probably contractual that Apple can only download to Mac's or PC's and not directly to any other devices. It's because that $0.99 iTune is worth $2.99 or more if the end-user wants it on a phone. It'll obviously sound better and have greater fidelity through a phone than the same song as played through the 5.1 speakers hooked up to your computer.

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Rainy Day said:

member since 07 Jun 2005 with 607 posts, unranked, send him a message or view his profile

That analysis is a load of crap. If Apple wanted to offer wireless downloads, the record labels are not stopping them. The problem is that the technology is currently too slow, and there’s not that much real value to the customer. Even the 4Gb model can hold more than enough music to tide someone over until the next time they dock their iPhone.

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burrito said:

member since 07 Aug 2005 with 177 posts, unranked, send him a message or view his profile

that article's a real stretch.

i think i'm gonna write an article next, declaring that the only reason apple is competing with vista so hard is to swipe market share from the zune.

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A guest said: (hide)

The analyst is wrong. And so is most of you.

The reason iPhone hasn't got direct access to iTMS, is the same reason they use Yahoo mail; they assure all future partners that there will be amble business opertuneties for thirdparty content providers.

I do not know the status in US, but in Europe an Japan, the only way Apple could have provided these services, was for a god chunk of money to the operator. And the biggest useful partner for Apple in Europe wouldn't accept that either. They do content delivery by them self.

There is prob. a good reason behind Steve's blog, but its not about iPhone.

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Willmark said:

member since 17 Mar 2005 with 73 posts, unranked, send him a message or view his profile

Wrong Guest @ 5:11 am

You seem to be forgetting this:

http://www.appleinsider.com/article.php?id=2275

Apple can use this critical patent as a threat to anyone that transmits data in any way shape or form in a download. Be it from computer, to pda, cell phone, movie downloads and whiny gamer kiddies X-boxes, etc.. And it doesn't stop there, Apple if they choose to can threaten Microsoft, and any of the Big 4 music companies. Steve Jobs must be laughing at the CEO of Universal right in expecting to get a kick back from iPod sales ala teh Zune.

The ramifications of this patent is huge. In addititon Apple can also now afford protracted legal battles, whereas they couldn't years ago. Example: If they choose to they could have dragged Creative through the legal proceedings for years over the iPod interface. They settled for what amounted to chum change for Apple.

They don't have to ask anyone for permission for data transfers. Basically they could tell any of the cell phone companies they will have to pay "X" amount of money per transmission/download for their own music services, since Apple holds the patent. And what could they do, go to court? I bet Apple has lawyers primed and waiting.

Is this likely? No, not really, more like Apple is playing poker with the best hand at the proverbial table and has a very big ace up their sleeve.

In short to borrow/paraphrase from afore mentioned gamer kiddy slang, "Apple can pnwn anyone they choose to".

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A guest said: (hide)

Sorry Willmark , they can't.

While they can really screw up the mobile business in Europe this way, they can't force a singelhand grip on both handset and content without also becomming operator. And in that business scenario, they would have their ass handed to them by a seriously scared mobile business sweating millions in R&D.

The reason we do not have the development speed of the asian, isn't because we CANT, its because the european way makes more money!

Competition regulation would make Apple a free kill, and band them up in court for years. In Japan they would be banned from the main operator and silently die within months.

Getting into these markeds means that Apple has to show an understanding and respect for the foreign mobile business. That was the whole point of getting google, cingular and yahoo on stage. Apple needs partners, not deadly enemies.

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A guest said: (hide)

Umm... WHO would WANT to download music over the AIR directly to the iPhone, when it uses CRAPPY SLOW EDGE, which isn't much faster than DIAL-UP?

Oh YEAH BABY, I sure want to dload an iTunes song over the air on EDGE, knowing that it'll take me 10 MINUTES, on average, per SONG.

The article is total ignorant GARBAGE, written by someone who obviously missed the clue train.

.

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