Apple Video iPod Invites War with Microsoft
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Rumors are flying that Apple will build on the success of its iPod as early as late this year with a version of the digital music player that also plays videos. Microsoft, having lost one market battle to Apple, has resolved not to get caught flat-footed twice. In fact, it has been laying the groundwork for a full-fledged war, aimed at winning not only consumers' money for their portable video players, but for their living room entertainment systems at well. Microsoft's weapon: DRM.
As is typical for Apple, rumors have been flying in advance of their next product offerings. Bloggers have led the charge, though the Wall Street Journal and several major news outlets added fuel to the fire. Many observers predict that sometime in September of this year, Apple will come out with a new iPod that features video playback. Apple’s iTunes store will supposedly support this by allowing users to purchase and download videos for just under $2 each.
Business2day editor-at-large Paul Sloan goes even further. He claims to have seen an internal Disney email showing that “[Apple CEO] Steve Jobs has spoken with Disney President and soon-to-be CE Bob Iger about ways to license various Disney content for a video iPod…That could include anything from clips from ESP and ABC News to short cartoons.” There may actually be something to this claim. Remember, Steve Jobs is not just the head of Apple; he is also the top man at Pixar Studios, which maintains a good relationship with Disney. Therefore, the door is already open for this kind of negotiation.
Sloan makes an interesting prediction after that, though. It’s true that the iPod wasn’t the first portable digital music player, but still managed to beat the competition. Looking at the past to see the future, Sloan believes that “Jobs will enter the arena late (as he did with the iPod) only to leapfrog over the competition with some entirely different device. And that could leave everyone from Microsoft’s Bill Gates to Sony’s Howard Stringer once again racing to copy their far smaller rival.”
There are a number of drawbacks to these predictions. Steve Jobs has denied more than once that a video iPod is in the works, and an Apple spokeswoman refused to comment on a story discussing the possibility. On the other hand, Apple watchers are used to these kinds of leaks and rumors, and hearing them denied. Some take the denials with a grain of salt, as the rumors have been right on the money often enough to be a thorn in Apple’s side.
Technology needs and competition covers the second drawback. With the Sony PlayStation Portable as one of the more prominent portable video players on the market, Apple’s video iPod must measure up to that standard. That means boasting a screen at least as large as the one on the PSP, a 60 GB storage capacity (or larger), and a price less than $500.
The biggest challenge facing Apple’s video iPod comes from a more familiar direction, however. It comes from Redmond – and a man determined to not lose another opportunity to move his products from the office into entertainment. In short, it comes from Microsoft, and Bill Gates.
Next: Microsoft Learns Humility >>
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