[10 September 2009]
San Jose Mercury News (MCT)
SAN JOSE, Calif. — Steve Jobs’ appearance marked the only real surprise at Apple’s press event Wednesday in San Francisco, an otherwise low-key affair in which the company announced some modest updates to its music products.
Preshow rumors to the contrary, Apple didn’t unveil its long-expected tablet computer, didn’t introduce a new streaming video service and didn’t kill the venerable iPod classic. Oh, and the Beatles still aren’t available in the iTunes music store.
Instead, the company added a video camera to its midrange iPod nano line, cut the prices on some other models and rolled out an update to its iTunes software and store that, among other things, adds digital liner notes to certain music albums.
Analysts at the event said Apple was wise to make incremental changes to existing products rather than roll out radical new offerings. The poor state of the economy makes it harder to sell consumers on anything entirely new, they said.
“I don’t expect anyone to bring out bleeding edge (products) in a market like this,” said Mike McGuire, an analyst with Gartner, a technology research firm.
Apple officials used much of Wednesday’s event to tout the company’s success in music. Apple’s iTunes music store is now the world’s largest music retailer, they said. Apple has sold 220 million iPods to date and 8.5 billion songs through iTunes, which has some 100 million accounts worldwide.
Meanwhile, the company has sold 30 million iPhones to date and an additional 20 million iPod touches, bringing to 50 million the number of devices it has sold in little more than two years that run on its iPhone operating system. There are now some 75,000 different applications in the iPhone App Store, and iPhone and iPod touch users have added a grand total of 1.8 billion applications to their devices since the store opened last year.
Not long ago, “portable music device” was synonymous with Sony’s Walkman, noted Michael Gartenberg, an analyst with Interpret, a market research firm. But the iPod has made the Walkman brand “about as meaningful as Victrola,” he said.
Gartenberg and other analysts expect the latest updates will help Apple maintain its dominance.
Unlike past years, the company didn’t radically update the design of any of the iPod models. The biggest update was adding a digital video camera to the iPod nano. The camera will capture standard definition video — 640 pixels by 480 pixels — and the new nano will include both a microphone to record audio and a speaker to allow users to hear what they’ve recorded.
But Apple didn’t add a camera to the iPod touch or other iPod models. And the camera feature is limited. It can’t shoot still pictures and doesn’t have a zoom. Users can’t trim videos on the iPod nano itself and they can upload videos to the Web only after transferring them to their PC.
The other big theme of the event was Apple’s move to make its products more affordable. It slashed the price on its entry-level 8-gigabyte iPod touch to $199 from $229, and is now charging $299 for the 32-gigabyte iPod touch, down from $399. A new 64-gigabyte model will be added to the lineup for $399.
Meanwhile, Apple cut the price of its 16-gigabyte iPod nano to $179 from $199, and introduced a new 2-gigabyte version of the iPod shuffle for $59.
Those cuts follow price reductions earlier this year on the company’s notebook computers.
As for the iTunes update, the company added an expected new feature called “iTunes LP,” which includes such things as liner notes, lyrics, band photos and album art with the purchase of digital albums. Music labels have hoped such extras will boost sales of full albums, which have flagged far behind sales of single songs in age of digital downloads
Apple also introduced a related feature called iTunes Extras, which adds content, such as deleted scenes and interviews, to purchases of movies on iTunes. Another new iTunes feature, one certain to please iPod touch and iPhone owners, allows users to rearrange program icons from within iTunes on their PCs, rather than solely on the touch-sensitive devices themselves.
Wall Street seemed unimpressed with Apple’s announcements. Although the broader market rose, Apple’s stock closed regular trading Wednesday down $1.79, or 1 percent, to $171.14.