Why Apple Isn't Making iTunes Available for the Palm Pre

The Palm Pre (PALM) was favorably reviewed relative to the iPhone (AAPL). But the iPhone has all those great Apps but the Pre does not. And your iTunes account ties you to the iPhone too unless your phone runs it too. And that was what the Pre did till Apple upgraded iTunes and it was no longer compatible with the Pre. Palm is upset and is trying to get Apple to open up iTunes.

Does Apple’s strategy make sense? Allowing Pre to use iTunes increases sales of music but reduces sales of the iPhone. Where do the two effects line up? It seems iPhone margins are almost 60% as AT&T (T) is giving Apple a huge subsidy. And the iTunes profit margin is around 10%. Not sure what the sales figures are but you’d have to see a huge number of songs to counterbalance profits from iPhone sales.

If it’s worried about iPhone sales, Apple is making the right call on making iTunes incompatible with the Pre.

Comments

[Jon T:]

Besides which, the moment Apple tacitly allows the Pre, it will be in no position to deny other phones too... it's all or nothing, and Apple's not stopping anyone doing what they want.

So, just why aren't Palm investing in their own ecosystem instead of borrowing Apple's?

For years Palm dismissed Apple, now it's payback time.

Aug 04 08:34 AM

[mollytjm:]

Palm really blew it. they rested on their laurels for years with the Treo and never did really fix all the glitches. Apple took nothing from anyone and they innovate fast and beautifully. There's no reason why they should have to give up what they created to a competitor. They had to do it a long time ago (selling code to microsoft in an effort to just stay alive) but it's their game today.
I remember all the dire comments about Apple going into the smartphone game 'so late'. Well, Palm was even later with the Pre...too late. They are playing catch up and since they are very slow innovators, the Pre will be outdated very soon. There's a reason there's no rush to buy it and Apple is doing the smart thing.
Apple is the investment to make for the long run.
Long APPL

Aug 04 08:49 AM

[brewer:]

Pre was only favorably reviewed by the Microsoft types who are, frankly, scared to death of Apple's resurgence. They all wrote off Apple for dead even when it was very clear they were coming back.

Palm ripped off Apple in the first place with the palm pilot. That was a dumbed down Newton. They did it again with the Pre. The Pre added NOTHING over the iPhone. The iPhone DOES MULTITASK, but Apple has very smartly limited it. The screen is too small to NEED multitasking, and it's much better to limit it because that way everything is nice and snappy, loads quick, switches very fast from one app to the next, each app saves it's data and comes right back to where you were. Why does it even matter if it continues to run in the background? For most things, it doesn't. Email and music multitask all the time.

iPhone 3.0 made crucial improvements such as cut and paste. Apple is very good at prioritizing features, beside which, they know that if they leave a few out, it will only make the upgrade more compelling.

Pre isn't selling anywhere near as well as the iPhone.

Apple has always been about hardware sales. The sell it with superb software though. Your article is incorrect, 10% on music sales, that must have been a WAG on your part. Apple has reiterated MANY TIMES that they make about 7 cents on a 1 dollar song. They also have expenses to run the store. iTunes is a loss leader, but it has tremendous value for the customer, something that other companies in the computer business fail to understand.

Apple learned the importance of music in the late 90's. Generic PCs were including CD burners before Macs, and it hurt sales. A CD burner was an easy thing to add, even a company like Dell could add it very easily. It almost killed Apple's sales for a quarter or two, then they saw the light, and put a LOT of focus on music, bought iTunes (soundjam) and built it into the product that it is today.

For them to give it away to other companies would be foolish at best.

BTW, Palm did another work around, iTunes is working again on Pre. So it's turned into a cat and mouse game, but Palm has little hope of keeping up. Apple should sue them, as they stole intellectual property from Apple when they hired some of the ex Apple employees. I expect they will go to court over this, if Pre manages to stay in business long enough.

Aug 04 09:38 AM

[roger that:]

Apple would have to be crazy to give away software it spent millions of dollars to create to help sell its hardware so that its competitors could use it to help sell their hardware.

Let Palm spend a few bucks to create its own music software.

Aug 04 10:38 AM

[John Blackburn:]

What was the point of this article? You've said nothing.

Aug 04 10:42 AM

[CGP:]

@John Blackburn
Agree, what did this add at this time?

....Of course iPhans and Palm haters got another chance to reel off some more "cheep" shots.

Aug 04 11:29 AM

[GSlusher:]

Palm should have written its own software to access the iTunes Library. "Spoofing"--pretending that the Pre is an iPod--implies that they are lazy, incompetent, greedy or unethical--or all of the above.

Aug 04 12:20 PM

[M.J.:]

This is a really stupid article. All of you people are just jealous about the Palm Pre's success. It is an Iphone Killer!!!!! Palm continues to add more and more updates to this phone every month. I will never trade the Palm Pre for a crappy Iphone 3GS. Why would I have a Iphone 3GS that is only good for multimedia purposes, when the Palm Pre can do Multimedia, Multitasking, Organizing your life, and a lot more all at the same time.

Aug 04 01:19 PM

[mathue:]

I'm on the fence with getting a Pre (I used to own one before they sucked), but their inability to write software and subsequent piggybacking on iTunes makes me wonder if they have any real strategy for the future of the device. Anyone who's suffered through getting Palm Desktop to sync properly on Windows via USB* will understand my reluctance to jump back from my Blackberry to Palm again.

*Eventually I used a USB to serial adapter

Aug 04 01:58 PM

[bankerdanny:]

You can't honestly believe that access to iTunes was the deciding factor for a single Pre buyer who might also have been considering an iPhone?

All the Pre could do was use iTunes to synch and manage play lists. If you have older Apple DRM restricted music it won't play on the Pre. If you buy video from iTunes, it won't play on the Pre.

As music management software iTunes really isn't that great. Rhapsody or MS Media Player work just as well.

ITunes has only one real advantage: the availability of video, and as I said, to watch it you need an iDevice.

Blocking the Pre makes Apple look bad and costs them music sales.

Aug 04 10:37 PM

[AdamC:]

We are not jealous of the Pre success if there is one, its upgrade path is limited and will probably look at where the iPhone is going.

The Pre team always be a follower and always looking out for missing features in the iPhone so they can one up the iPhone but for them to innovate ,I am sorry to say, they simply have no idea where to go.

But then to each his good.

Aug 04 10:39 PM

[bankerdanny:]

On Aug 04 01:58 PM mathue wrote:

> I'm on the fence with getting a Pre (I used to own one before they
sucked), but their inability to write software and subsequent piggybacking on iTunes makes me wonder if they have any real strategy for the future of the device. Anyone who's suffered through getting Palm Desktop to sync properly on Windows via USB* will understand my reluctance to jump back from my Blackberry to Palm again.
>

Palm isn't "piggy backing" on iTunes. i picked up my Pre today (after 12 years w/ATT the last 2 on a Blackberry). Lots of Pre owners and potential Pre owners will own iPods and already use iTunes to manage their libraries. Why should they have to switch or use two programs? I was able to add music via MS Media Center just like on my Creative Zen. Personally I don't care for iTunes. I think it's complicated and not intuitive at all.

But if I had an iPod and a big library of songs already set up to work with iTunes I would be pissed to have to switch. There is no good reason for Apple to prevent the Pre from accessing iTunes. It only hurts Apple and it's existing customers.

Aug 04 11:01 PM

[James Katt:]

Palm is so stupid.

Why can't Palm do what Blackberry did? Blackberry created their own desktop software that accesses iTunes information without needing iTunes to be on. It works well. Blackberry doesn't need iTunes to sync with a Blackberry. Why doesn't lame Palm do the same? Are they so dumb? Duh.

iTunes will never support 3rd party hardware.

Palm is misusing USB IDs to fake being an iPod. This can be construed as a hack, a security risk.

All Apple has to do is let iTunes verify the firmware of any attached hardware to verify the identity of the hardware. It's easy. This would block out anything that Apple does not support.

Aug 05 12:02 AM

[neutrino23:]

First of all, Apple can't formally allow Pre to sync to iTunes as that becomes a liability. They are now responsible for providing this service and if they do it for Pre they do it for everyone. I see no way Apple can do this.

Second, I agree with James Katt. There are other ways Palm could have gotten iTunes content onto the Pre without pretending to be an iPod. This would not have put them at odds with Apple.

Aug 05 12:26 AM

[Neil Anderson:]

Palm was horrible to Apple and Mac users for years. Like the old saying: He who cries last cries loudest.

Aug 05 12:55 AM

[Tim Nash:]

Palm is running out of money. Clearly it wasn't a priority to make good desktop software, like RIM for Blackberry, that accesses the iTunes information provides by Apple for free. More thoughts on Palm and why the shares are overpriced in my articles Palm Pre: Chronicle of a Death foretold lowendmac.com/nash/09t...

Aug 05 04:57 AM

[Constable Odo:]

Palm should create their own synching software for the Mac the same as RIM is doing for the BlackBerry. In the long run it will make it much more easier for them to keep Pre customers happy. Palm may be able to create software much easier for Pre users to work with. Does the iPhone hook up to anything Palm has?

Aug 05 08:26 AM