Graham Spencer

917 posts on MacStories since January 2011

Former MacStories contributor.

graham@macstories.net

Apple Faces Licensing Challenges With Music Publishers

In just a matter of weeks, Apple is expected to reveal their cloud-music service at WWDC. With rumors suggesting Apple is actively co-operating with the music publishers, CNet today published an interesting article that highlighted the potential stumbling blocks that Apple faces in tying up a deal. There are four major record companies and it is widely believed Apple has finalised agreements with three of them: EMI Music, Warner Music and Sony Music, furthermore, Universal, the current holdout may reach an agreement with Apple this week. Yet this is only half the battle, as CNet points out, because Apple still needs publishing rights – the big labels only own the recording rights, not the publishing rights.

For the publishing rights, Apple must negotiate with the large music publishers individually. With only two weeks till WWDC it really doesn’t leave Apple with much time at all to sort this out. But what are publishing rights? As CNet explains, when Apple sells a song, such as the Beatles “Twist and Shout”, it must pay both EMI and Apple Records (representing the Beatles) for the sound recording. However it then has to pay the publishing company that represents the writers of the song and words (in this example it is the company representing Phil Medley and Bert Russel). However if Apple then wants to sell a cover version of the song, such as The Isley Brothers version, it again has to pay Medley and Russell again.

The complication with this is that whilst there is a set rate for those licenses in terms of CDs and digital downloads – there is no precedent or guidance for a cloud-based music service that Apple is reportedly developing. As CNet suggests, there is very little money that separates Apple and the publishers on this issue, but it will nonetheless be the sticky point of negotiations. What muddies the water even more is that because Apple has inked deals with 3 the labels already, they “have soaked up most of the money that Apple is prepared to pay” – leaving little for deals with the publishers.

A source from the recorded-music side said that the labels who have licensed Apple have negotiated only what their songs are worth and if Apple is unwilling to pay the publishers’ price, the publishers don’t have to provide licensing. The source suggested that this is a negotiating ploy and that Apple is trying to pit the labels and publishers against each other.

[Via CNet]

Wired Implements Apple’s In-App Subscriptions

With an update to the Wired app today, it becomes the latest iPad magazine from Conde Nast to utilize Apple’s in-app subscription service after they began implementing it in all their magazine apps earlier this month. Wired now offers users four ways to consume the Wired magazine on the iPad, they can continue to purchase individual issues for $3.99, pay $1.99 for a monthly subscription, $19.99 for a yearly subscription or if they are already a print subscriber, access the app for free.

The subscription offerings will allow users to access the monthly editions until the subscription runs out. Opting to purchase individual issues will mean users get to permanently purchase that issue and re-read it at a later time without a subscription.

Today’s update follows last month’s update that brought enhanced sharing and shopping features to the app, and to celebrate they made the issue available for free. According to Howard Mittman on Twitter, that proved successful because the issue has become the most downloaded, beating the record set by the first iPad edition of Wired, which had over 100,000 downloads.

App Store Hits Milestone Of 500,000 Approved Apps

Just after midnight this morning, the iTunes App Store approval team pushed through a batch of app submissions, making the total number of submissions exceed 500,000 apps. It means that in the 34 months since the App Store opened in July 2008, there have been just over half a million apps published to the App Store.

To celebrate the event, Chillingo (developer), 148apps (mobile app blog) and Chomp (search company) created an epic infographic. It’s full of a tonne of interesting factoids such as: Angry Birds stayed at number 1 on the paid apps list for 275 days, the App Store launched with 500 apps, each developer submits an average of 4.6 apps and so on.

The actual number of apps available for download is currently closer to the 400,000 mark because of various replacement and withdrawals of the past 34 months. We also know that at least 75,000 of the apps are for the iPad – a figure revealed in late March. To see the full infographic jump over to the 500K Facebook page put together by Chillingo, Chomp and 148apps.

[Via Fortune]

Chengdu Plant Shut Down May Reduce iPad 2 Production By 500,000 Units

Last week’s explosion at the Chengdu Foxconn plant may in fact lead to a loss in production of 500,000 iPads, despite contrary reports from yesterday. The figures come from IHS iSuppli, which did note the exact figure will depend on how long the plant remains closed.

Yesterday’s report, from China Times, reported that production would unlikely be impacted because the Shenzhen Foxconn plant would pick up any drop in production from the Chengdu plant. IHS however says that Shenzhen will struggle to make up for all of the lost output. It may even result in Apple missing the 7.4 million iPad 2 shipments that IHS iSuppli has forecast.

The Chengdu plant is said to produce 30% of all iPad 2s and some, including Mike Abramsky of RBC Capital Markets last week speculated that the impact could even be as large as a loss of production between 1.8 million and 2.8 million iPads. Whilst others such as Shaw Wu of Sterne Agee doesn’t believe the Chengdu shut down will have much of an impact at all on iPad 2 production, with other plants picking up the slack.

The explosion at the Chengdu Foxconn plant last week took 3 lives and injured 15 people, nine of which are still hospitalised. The exact cause of the explosion is still unknown but early signs point to inadequate venting leading to a build-up of highly explosive aluminium dust that combusted.

[Via Bloomberg Businessweek]

 

Scott Forstall Places Second In Most Creative Business People Award

Fast Company has placed Scott Forstall as second in their 2011 ‘Most Creative People in Business’ awards. Forstall, who is VP of iPhone software, received the award for leading the development on iOS, with Fast Company noting that “the popularity of that tap, pinch, and swipe interface has sent Cupertino’s earnings rocketing”.

Jonathan Ive’s slick designs may grab the headlines whenever Steve Jobs introduces a new product, but it’s Scott Forstall’s smart software that fills Apple’s coffers.

Meanwhile, Wadah Khanfar took out top honors for his work as Director General of the Al Jazeera network – which has seen recent surge in popularity for its extensive coverage of the uprisings in the Arab world, notably for its coverage in Egypt and more recently, Syria. In its entirety, the list featured a variety of people that exhibited creativity in business from Arianna Huffington of the Huffington Post (10th) to Oprah Winfrey (12th) to the singer Bruno Mars (58th).

However of most interest to us at MacStories are those which have heavily utilized iOS as part of their business strategy – in some cases even dedicating their entire business to the success of iOS. Jack Dorsey of Square and Twitter made the list at number 4, whilst Marcos Weskamp of Flipboard made the list at number 42. Others included Aaron Levie of Box.net (59), Kevin Systrom of Instagram (66), Dong Minghzhu of Gree (71) and Mikael Hed of Rovio, who rounded out the list at number 100. [via Setteb.it]

Reports Of A Grand Central Apple Store Resurface

The Wall Street Journal has today revived suggestions that Apple is looking to open an Apple Store in the New York Grand Central Terminal. Back in early February there had been reports from the New York Observer that Apple was planning to open their largest store at the terminal. Those rumors were then squashed in early March after reports surfaced that negotiations had fallen through.

Todays report from the WSJ claims that the Metropolitan Transportation Authority (MTA) is looking for new tenants and that Apple has expressed interest in establishing a retail presence within Grand Central. The space on offer is large, but not large enough to be the world’s largest Apple Store – which is currently the Regent Street (London) store which is 25,000 square feet.

The agency is looking for a single renter for two adjacent balconies on the north and east sides of the terminal. It will issue a request for proposals Monday.

A spokesman for the MTA told the WSJ that the agency dealing with the space has spoken to Apple and is hopeful that they bid on the space. Their report also suggests that the MTA may even be working specifically to find space for Apple, offering two adjacent spaces for rent, even though one is still occupied by a tenant. That tenant, who operates the Metrazur restaurant, would likely receive a hefty buyout from whoever purchases the space.

If Apple is interested in renting the space they will have to do so publicly – with all retail space within Grand Central awarded through an open bidding process. Jump the break for a plan of the retail space on offer – highlighted in red on the right hand side, labelled “East Balcony”.

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iPhone 5 To Feature Curved Glass Screen?

According to DigiTimes, the latest rumor going around the Taiwan supply chain is that the next iPhone (whether it be the 4S or 5) will feature a curved cover glass for the display. It would see the next iPhone resemble aspects of Google’s Nexus S phone which had the glass curved into a concave, or perhaps like the older model iPod Nano which had convex glass.

In the past, manufacturers of the glass for smartphone displays had been reluctant to commit to the investment in appropriate glass cutting equipment because of the high capital costs associated with producing them. However, Apple is said to have purchased between 200 and 300 glass-cutting machines for the glass manufacturers according to DigiTimes’ sources.

Prior reports put the production of the next iPhone as beginning in August this year, but today’s DigiTimes report notes that there is no firm timetable yet for the beginning of production. Apple is supposedly still involved in working with suppliers for cover glass, glass cutting, lamination and touch sensors to improve yield rates before production begins.

[Via DigiTimes]

Explosion Tragedy at Foxconn Plant Claims Third Life

Today some more details have emerged over the explosion and subsequent fire that occurred at a Foxconn manufacturing plant in the city of Chengdu, China. The sad news is that a third life has since been lost and 9 people (of the 15 that were injured in the incident) remain in hospital as a result of various injuries.

The Chinese paper, Commercial Times is reporting that the explosion took place around the location of a building that houses coating lines and other various chemical materials. An investigation is currently ongoing, but early signs point to “an explosion of combustible dust in a duct” within one of the polishing workshops. On a related note, the SACOM watchdog group had published a report two weeks ago that criticized several aspects of the Chengdu plant, including insufficient venting of the polishing department, where it was said that there was large amounts of (highly explosive) aluminium dust.

Foxconn rejected the report when it was released, and although early signs do point to a dust explosion, it must be noted that the investigation is still in the very early stages to say with certainty that this was the cause. Meanwhile it has been reported in the Commercial Times and China Times that Foxconn, in efforts to quell investor concerns, will be increasing production of the iPad 2 at their Shenzen plant (which already produces most iPad 2s) to offset any loss in output at their Chengdu plant whilst it is being repaired and investigated.

[Via Engadget and DigiTimes]

Apple Store iOS App Expected To Be Updated As Part Of Retail Revamp

Some more fragments of information have leaked out about what this weekends rumoured Apple Store 2.0 relaunch will bring. According to MacRumors, the iOS Apple Store app will be updated, bringing with it full support for building custom, built-to-order Macs.

It is suggested that the app update will bring all the features and purchasing options that the online Apple Store currently offers – meaning the ability to customize everything from the processor to memory and even pre-installed software. Add-ons, like printers and AppleCare, would also be options for customers to select when using the Apple Store app for ordering a new Mac. The Apple Store app was released just over a year ago but has always been somewhat limited, only offering customers the ability to order the base configurations of each Mac and with options for AppleCare or One to One.

With this update, it seems clear that Apple has opted to move the mobile ordering experience into an app rather than deploying it as a mobile-formatted website.

With this latest leak, it seems reasonable to expect a fairly large and broad revamp of the Apple Store experience, just days after its 10 year aniversary. From what has leaked and been rumoured, there is expected to be minor store makeovers, a revamp of the internal RetailMe service on iPad 2s, a new internal “Daily Download” application for store employees and now a new Apple Store app for iOS.

[Via MacRumors]