[7 January 2009]
San Jose Mercury News (MCT)
SAN FRANCISCO - With company icon Steve Jobs a no-show at the 25th annual Macworld, Apple on Tuesday unveiled a radically new pricing plan for music sold through its online iTunes store that could give a boost to the sagging recording industry and secure iTunes’ standing as the leading outlet for music. In another dramatic change, the company said it will allow consumers to play iTunes song downloads on just about any device they want.
The Cupertino, Calif., company also showed off its new 17-inch laptop with a non-replaceable battery that Apple says can run up to eight hours between charges.
At the last Macworld that Apple will participate in, the company rolled out a modest offering of product updates. The show was decidedly low-key as Apple fans absorbed the day-old news that Jobs, who skipped the event, is being treated for a hormone imbalance that he said is responsible for his dramatic weight loss.
Still, the company he co-founded delivered enough updates and innovations to trigger oohs and ahhs from the throng of Macolytes at the Moscone Center in San Francisco.
Gartner analyst Mike McGuire called the new product announcements “solid,” though veterans of past Macworlds have grown accustomed to such groundbreakers as the iPhone and near-paper-thin MacBook Air.
Piper Jaffray analyst Gene Munster, in a note to investors, called the product updates “underwhelming.” That, according to Munster, is a good thing, at least for fans of Jobs.
If Apple Senior Vice President Phil Schiller, who replaced Jobs on the Macworld stage, “had made a significant announcement, we would have seen that as a sign of a changing of the guard,” Munster wrote. “This is another sign that Steve Jobs remains the active leader of the company.”
Some investors expressed disappointment, sending Apple stock down 1.6 percent, closing at $93.02.
The Jobs-less Macworld got under way with Schiller strolling onto the stage. Like Jobs, he wore the preferred attire of Silicon Valley: jeans. But there was no Jobs trademark black mock-turtleneck - Schiller wore a blue shirt.
“I appreciate you showing up - from the bottom of my heart, thank you so much,” he told the adoring audience.
Though he seemed a bit tentative on the blue-hued stage that Jobs has owned for years, Schiller displayed the seamless showmanship for which the company is renowned. What he lacked in charisma, he made up for with sincerity, enthusiasm and deep understanding of the products.
Apple’s new song pricing - 69 cents, 99 cents and $1.29 - is a concession to record labels, who have seen CD sales plummet and who have lobbied hard for Apple to adopt a tiered price structure. Schiller said most songs in the iTunes catalog would sell for 69 cents, but it is assumed that current hits and other popular songs would cost $1.29.
In return, the music industry agreed to let iTunes to sell all songs free of digital rights management technology, or DRM. That technology restricts the ability to copy songs or move them to other computers and devices. By the end of this quarter, all 10 million songs in the iTunes catalogue will be DRM-free, Schiller said.
“It means your ownership of the music truly is your ownership,” said Tim Bajarin, president of technology analyst group Creative Strategies. “You can play it across your devices - TVs, PCs, any other competing music player.”
The new 17-inch MacBook Pro, which will sell for $2,799, is aimed at professionals doing high-end graphics and video editing. But its 8-hour battery could set a new standard for laptops. Like the batteries in iPods and the MacBook Air, the new 8-hour battery is sealed in the machine and can’t be swapped out by users. But Apple will install a new one for $179.
The long-lasting batteries can be recharged 1,000 times, significantly more than conventional batteries, Schiller said.
“You don’t need to change your battery if you are getting up to eight hours (in a single charge) and 1,000 recharges,” Bajarin said. “This new chemistry that gives 1,000 recharge cycles is going to force the rest of the battery industry to follow. But typical of Apple, they probably have a 12 to 18 month lead on their competitors.”