iTunes, uTunes—We All Swoon For iTunes
Apple's iTunes music service dominates the market for legal downloads, owning over 70% of the industry. A European division servicing the UK, France, and Germany opened for business in June and already dominates the market there (though our UK correspondent Paul Messenger complains about a higher price compared with US-only downloads).
Sales of Apple's iPod and iPod Mini buoyed the company's stock price, which has risen by 12% (up $3.49 to $33.07). The computer company's third quarter stock profit nearly tripled on the strength of its iPod success. Sales of the G5 computer were also up by 15%, good news that was somewhat spoiled by IBM's inability to supply enough of the new 90-nanometer G5 processor chip to enable several new computer models to ship in time to meet the critical "back to school" marketing window.
Apple shipped 876,000 computers in the third quarter, an increase of 14% over the same period last year; iPod sales increased by 186% over last year's performance, with 860,000 units shipped in the 90-day period.
On July 24, Apple will make the $250 4GB iPod Mini available internationally. The smaller iPod proved so popular upon its US release that Apple has struggled to supply the demand for it. The Mini's international introduction was delayed in order to accommodate the American appetite for the diminutive device. Shortages continue, however, and few Apple stores or resellers seem to currently have them in stock.
Apple recently released the $129 AirPort Express, a seven-ounce, compact 802.11g wireless base station that supports both Macs equipped with an AirPort Extreme Card and Wi-Fi–compliant 802.11g Windows PCs (and Macs with the older AirPort Card and 802.11b Windows PCs, as well, of course). The audio twist to this is that the AirPort Express not only sports 10/1000BASE-T Ethernet and USB ports, but an analog/digital mini-jack output, allowing consumers to wirelessly connect their hi-fis (or a pair of powered speakers) to their computers housed in remote locations. The AirPort Express can also provide simultaneous wireless Internet access via DSL or cable modem for up to 10 computers—which might be handy for keeping the rest of the family occupied during marathon listening sessions.
Website Think Secret claims that "reliable sources have confirmed" that Apple will release new iPod models "sometime in the first three weeks of August."
The site reports that the new iPods will be more compact, "similar to the iPod Mini in design," but will possess larger hard drives than the current model—other websites have reported that a 60GB version is likely. Unlike the iPods available now, the new models will be offered in colors, which Think Secret suggests will include purple, orange, and yellow. The site reports that "pricing is expected to be similar to the current iPod MSRP."
Late breaking news: Just as we were going to press, we learned that Think Secret got it partially right. The new iPods, which were announced with a cover story in the July 26 issue of Newsweek, are still white and roughly the same size as the G3 models, although slimmer. The G4 iPods also feature a centered headphone jack, longer battery life, and a Mini-style brushed metal "click" wheel, sans the four-button interface of earlier models. The cost has dropped by $100 per model (and the 15GB iPod has been dropped from the lineup). There is no sign of a 60GB model—yet. Think Secret's latest post on the subject reveals that the "apparent discrepancy [in its] previous reports of an August revision . . . may pertain to a separate iPod mini announcement rather than a replacement to the standard iPod line." Does that mean there could still be an August surprise?
Unlike the iTunes music store, which limits fidelity to 128kbps, the iPod and iPod Mini allow the consumer to choose between quantity and quality. Many audiophile iPod owners report that uncompressed files in .WAV or .AIF format allow them to carry a wide range of demo material wherever their audio fancies might take them. An iPod with a 60GB drive will allow them to haul around several days of Red Book quality digital source material.
Speaking of the trade-offs inherent in choosing between capacity and sound quality, Apple's latest version of its iTunes software includes a lossless encoder. Stereophile's editor John Atkinson has been putting it through its paces and will report on his findings in the September issue of the magazine.