Apple in the Sauce

Apple Computer is riding a wave that shows no sign of breaking.

On March 6, the Cupertino, CA–based computer pioneer celebrated its highest stock price in over three years, closing at $26.75/share on the Nasdaq exchange, an increase of 25% since January 1, buoyed by the popularity of Apple's iPod portable music player and the company's iTunes downloadable music service, and by an unconfirmed rumor of a takeover bid by Sony Corporation.

In February, Apple reported that it had received 100,000 preorders for the new iPod mini. The $250 player went on sale February 20, but some customers were told that they would have to wait up to three weeks for delivery. The iPod mini comes in five different colors and can hold up to 1000 songs on its miniature hard drive. Apple has sold more than two million iPods since they first hit the market in 2001.

Despite declining CD sales, the music industry is beginning to enjoy at least token profits from online sales. A recent twist in downloadable offerings is recordings that will never appear on discs released from record labels, according to a March 1 story by The Wall Street Journal reporters Ethan Smith and Nick Wingfield. The week after the Super Bowl, one of iTunes' most popular downloads was Beyonce Knowles' rendition of "The Star-Spangled Banner" as performed at the championship game.

Another popular outtake from the game was Green Day's version of "I Fought the Law," used in a commercial for Apple and Pepsi. The song is an iTunes "world-wide exclusive," in the words of Apple marketing executive Rob Schoeben, and sold 27,000 copies during the first three weeks it was available.

Like authorized bootlegs, otherwise unavailable recordings are proving irresistible for music fans, Smith and Wingfield report. Among the online lures are recordings from live performances, such as Knowles', as well as outtakes from rehearsals. Artists are keenly aware of this previously untapped revenue stream, according to Scott White, co-owner of Fast Atmosphere, which builds and runs websites for musicians Norah Jones, Charlie Hunter, Gillian Welch, and others. "Artists are bringing computers on the road, plugging them into soundboards, and making digital recordings ready for download," White told the Journal.