Apple Bars Palm from iTunes: Is Pre a Threat? 12 comments
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According to media releases, Apple Inc. (AAPL) (Analyst Report) introduced an update to its iTunes software, the iTunes 8.2.1, that limits Palm (PALM) (Analyst Report) users' access to the updated iTunes on the recently launched Palm Pre smartphone.
During Pre’s release, Palm said that users will be able to download free music, photos and videos via iTunes. Now Pre owners can no longer use Apple's iTunes to sync their smartphones to Macs or PCs. This move is expected to hurt Pre sales going forward as users’ ability to download music and videos now will be restricted.
Pre will not be able to act much like an iPhone or iPod. This is a setback for Palm as it had expected Pre to drive sales and turn the company’s fortunes around.
Apple has the prerogative to take such action as it exclusively owns iTunes. Although Apple has blocked the use of updated iTunes software, Pre owners can use the older version of iTunes. But we believe it will be of no use as consumers would not want an old system that restricts music access.
The new updated iTunes Version 8.2.1 provides a number of important features. The access to new iTunes will be allowed only to authorize devices, such as its iPods and iPhones. Apple also said that iTunes do not support non-Apple hardware. We believe this action will greatly undercut competition and generate higher sales and profits for Apple.
In our opinion, this move by Apple to lock away the advantage of the iTunes software for Palm Pre is to maintain its monopoly in the market and reduce the growing threat from Pre.
This move should help Apple defend its market from competition for its newly introduced iPhone 3G S. Though a number of other competitors, such as Microsoft (MSFT) (Snapshot Report), SanDisk (SNDK) (Analyst Report), Samsung, and Sony (SNE) (Analyst Report) have launched rival products and are trying to undercut iPod with additional features and attractive pricing, Apple’s iPhone and iPod carry strong brand equity among consumers, giving it a dominant position amid the high-end digital music players.
iTunes presently enjoys over 85% share of the U.S. market for legally purchased and downloaded online music. With over 65 million customers, iTunes has a catalog of 10 million songs, over 30,000 TV episodes, and over 2,500 films including 600 in high definition video.
We maintain our Hold rating on Apple shares.
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This article has 12 comments:
Pre was masquerading as an iPod device. Apple never agrees to support any device in that manner other than iPod. So it closes that hole. This is typical software interface policies. If I write software to work with Microsoft SQL Server API's, I am restricted to using the exposed application level API. Suppose I discover a hole that lets me call private API reserves for internal Microsoft software. Suppose I then exploit that capability and start masquerading as a Microsoft product to gain access to internal capabilities not meant for third-party applications.
Should Microsoft support that hole and let me use it? Or should Microsoft close it?
Supposed I am a Linux developer who discovered this hole that allows me to claim some interesting capabilities if you run Linux on Windows using VM. Is Linux a mega threat to MSFT?
Apple has a tiny share of the PC market. So if Apple is the one who found this hole and developed applications to exploit it, is MSFT feeling a threat from Apple?
If Microsoft closes the hole, is it because I am a threat to Microsoft? Or is it that my product has gained unauthorized access to capabilities not meant for third-party software?
Does whoever wrote the original article truly understand how the software product development process work?
No, it has nothing to do with whether Pre is a threat. Palm has not announced any sales figures. It is about unauthorized access of API not meant for third-party developers.
Pre can indeed continue to synchronize with iTune, just like other devices out there, just not masquerade as an iPod to have unauthorized access to reserved Apple internal API. Is that too difficult to comprehend?
The point remains the same though.
The only people that should complain are Palms shareholders who have been tricked into thinking they were getting iPod style media syncing and iPhone style apps when in fact they have been sold a cheap hack and a second rate SDK, neither of which will deliver.
On Jul 19 08:14 PM Beluga wrote:
> It's gotta make you laugh when bloggers complain that Apple's actions
> are 'monopolistic' when in fact the opposite is true: If Apple provide
> a sync facility for all third party devices to work seamlessly with
> iTunes it would arguably increase its already high market share for
> music distribution. Apple is therefore only acting to keep the market
> competitive. Amazon will be pleased with their actions.
>
> The only people that should complain are Palms shareholders who have
> been tricked into thinking they were getting iPod style media syncing
> and iPhone style apps when in fact they have been sold a cheap hack
> and a second rate SDK, neither of which will deliver.
Just for fun, so is this instance of "monopolistic" acceptable? Or unacceptable?
If you create hardware to sell and build software to make the hardware that much more competitive and appealing, are YOU willing to then let other people use your software to build their hardware to compete against you? Will you be gracious enough to NOT be monopolistic?
I have no clue how this logic works. So BMW has to let Mercedes in? Toyota has to let Honda in? So everybody has to let everybody else in on their secrets else there is a monopoly?
Is Apple the only company making MP3 hardware? Every other company, including Zune maker, must buy and rebrand the hardware from Apple?
Must EVERYONE on the planet use iTune only? There can be no other music store?
If the answer is yes to any of the two above, we have a monopoly. If the answer is no, we have no monopoly.
Please get that straight.
On Jul 19 10:11 PM biggar wrote:
> It's not music downloads that makes Apple a heap of cash, it's iPod
> and iPhone sales. If other players gain access to iTunes people may
> choose to purchase those players instead of Apple's suite. That would
> hurt Apple. The move, while I applaud it, is monopolistic.
Was it wrong for Apple to close the "hole" to the palm?: yes. Why would they write an iTunes client that can run on Windows if they didn't want only Apple Macintosh products to use their software. They obviously know that if they completely close off the access to their services, sales would suffer. So yes Apple did write a Windows client for use on a MAC. Did Microsoft write a MAC OS client for Windows? No. They don't see a threat. If they didn't close off iTunes from Microsoft using it, then why did they close it off to Palm? Because they see a possible threat. You didn't see them block the Samsung Instinct application that could remotely control your iTunes software did you? That's because the Instinct still sucked...I know, I had one. I will give Apple this, the iPhone 3G S is an incredible device, and if AT&T service didn't suck so bad and wasn't so expensive, I'd probably own one. But the Pre is a comparable device, and each has it's own Pros and Cons. The main reason I like the Pre better is the Cards feature, where you can seamlessly multitask and go back to where you were with one push of a button and a finger slide.
I see that this is a sensitive argument, and I do applaud Apple for such incredible devices, but nothing gets me more than the foolish people who have their Apple tunnel vision goggles glued to their face...
On Jul 19 10:11 PM biggar wrote:
> It's not music downloads that makes Apple a heap of cash, it's iPod
> and iPhone sales. If other players gain access to iTunes people may
> choose to purchase those players instead of Apple's suite. That would
> hurt Apple. The move, while I applaud it, is monopolistic.
Do you know FOR CERTAIN Pre cannot possibly access iTune data? Or are you just reading someone else's erroneous posts and then formulate your position?
Sandisk users using Windows can use iTune, they just cannot use iTune to synchronize Sandisk product directly. Do you understand the difference. For example, if I have a sandisk device and I have iTune on my Windows machine, I can use an indirect method to get my iTune content onto my Windows machine which then uses Windows Media Center to synchronize the content to my Sandisk device. The key word is INDIRECT.
Many other devices can "synchronize" indirectly via an intermediary with iTune. This has been done forever. iTune just cannot recognize these device natively.
iTune DOES NOT recognize Zune as a native iPod, does it? iTune does not recognize Sandisk Sansa as a native iPod, does it? So why should iTune recognize Pre as a native iPod device?
Palm decided to be blatant about it and actually fooled iTune to see the Pre as an iPod. Do you get the difference yet?
Do you really think this is specific to Palm? Or it is only because of competition? How about the need to then support multiple devices? All the different needs by the device manufacturers? Compatibility issues? Updates? Upgrades? Why should Apple go through all that headache?
Windows run on multiple PC's made by multiple companies and must deal with all different sorts of hardware, and so it is not an easy task for Microsoft. Apple chooses to not go that path. Do you understand the difference yet?
So Apple is not preventing anyone from synchronizing with iTune. Apple is actively allowing that to happen as long as you do it indirectly using a host of other tools. Apple is only saying that iTune will NOT recognize any and all MP3 players as iPod. Can you please explain to all of us here why that is bad or wrong?
Does IBM AIX machines somehow magically accept Windows VISTA as a partner OS and seamlessly integrate with VISTA? Why not?
Does HP-UX machines seamlessly recognize Solaris as a partner OS and open up all hardware and low level access as though it is HP-UX? Why not?
Does Microsoft SQL Server automatically detect FileMaker Pro and seamlessly support cross-db SQL queries? Why not?
Do you understand yet?
Looks like a bunch of ignorant media BLOGER type is mouthing off with little journalistic integrity causing a lot of unnecessary confusions amongst Pre users. I also blame Palm directly for doing something that will confuse their own customers. It is a strategic move that either benefits Palm or make Apple out to be a bad guy. I for one am not easily fooled.
On Jul 20 01:15 AM GmanDavis wrote:
> guess what...Apple's iPhone isn't all its cracked up to be, and for
> those users who know how to drag and drop files (most do), you dont
> even need iTunes to manage your music. You can manage your Palm
> library of music with any other music software because it can act
> like just another hard drive.
>
> Was it wrong for Apple to close the "hole" to the palm?: yes. Why
> would they write an iTunes client that can run on Windows if they
> didn't want only Apple Macintosh products to use their software.
> They obviously know that if they completely close off the access
> to their services, sales would suffer. So yes Apple did write a
> Windows client for use on a MAC. Did Microsoft write a MAC OS client
> for Windows? No. They don't see a threat. If they didn't close
> off iTunes from Microsoft using it, then why did they close it off
> to Palm? Because they see a possible threat. You didn't see them
> block the Samsung Instinct application that could remotely control
> your iTunes software did you? That's because the Instinct still
> sucked...I know, I had one. I will give Apple this, the iPhone 3G
> S is an incredible device, and if AT&T service didn't suck so
> bad and wasn't so expensive, I'd probably own one. But the Pre is
> a comparable device, and each has it's own Pros and Cons. The main
> reason I like the Pre better is the Cards feature, where you can
> seamlessly multitask and go back to where you were with one push
> of a button and a finger slide.
>
> I see that this is a sensitive argument, and I do applaud Apple for
> such incredible devices, but nothing gets me more than the foolish
> people who have their Apple tunnel vision goggles glued to their
> face...
Unfortunately, our crazy legal system requires companies to take these actions.
To say that Pre is a 'threat' is to give it way too much credit. So what if Palm BIZARRELY promised support in a store they don't control. Honestly, did anyone buy that? Get your head checked if you did.
Why can't anyone do a decent MP3 client/store other than Apple? Geez, iTunes is OLD at this point and there is NOTHING to compare to it anywhere. Maybe Palm, etc... just waited too long, never had any music devices, etc... basically followed Apple's lead in the PDA space to begin with (to put it kindly), etc...