Apple seeks 'tax' on iPod accessories

[MacBytes]

Category: 3rd Party Hardware
Link: Apple seeks 'tax' on iPod accessories (http://www.macbytes.com/link.php?sid=20050316224637)
Posted on MacBytes.com (http://www.macbytes.com)

Approved by Mudbug

[clayj]

Uh-oh, Yogi... Mr. Ranger isn't going to like this...

If true, this is a phenomenally bad move on Apple's part. They're already raking in huge profits from the sales of iPods, music from ITMS, and Apple iPod accessories, and now they want a cut of what every other iPod accessory maker brings in? If they insist on doing this, it will only hurt the iPod, at a time when it's actually a bit vulnerable to competition.

This is like Coca-Cola trying to charge glass makers for selling glasses to hold Coke products. The availability of accessories actually helps drive the iPod market... kill the accessory makers, and you hurt your ability to achieve greater market penetration.

[PlaceofDis]

depends on how apple wants to collect this 'tax' after all these people are riding on apple's success, apple has to approch this from the right angle to not fall on its face

i am not sure about this...this is definately going to raise some risks though, not to mention a lot of other issues

[irmongoose]

Official: Apple = Microsoft.



irmongoose

[Belly-laughs]

Greedy indeed.

:mad:

[Phatpat]

Apple provides guidelines and tech specs. Accessory makers get a way to stand out. Seems like a good business deal. Apple is a publicly held business, makes sense that they would take advantage of an opportunity.

[suntzu]

This is like Coca-Cola trying to charge glass makers for selling glasses to hold Coke products.

Actually, no. The report said that the "tax" (and that term should really be used lightly) only applies to electronic devices and not accessories like cases. That being the case, a better analogy would be Coca-Cola charging food makers for using the phrase "Made with real Coca-Cola" (like ICEEs and other ice creams).

But this makes sense. These companies are making money from technologies that Apple pioneered. But it's also important to remember that this isn't even for all electronic iPod accessories. These are just for products that want to have the "Made for iPod" seal. As the article states, Griffin Technology and Belkin, both want to use this and have stated this won't increase the price of the product (it'll probably draw from the advertising budget).

[aswitcher]

I am fine with this, especially if they make very clear what pods it works with, and test for other issues. As a 3rd party supplier, you dont need this, but its a good thing to have in a competative market.

[Kagetenshi]

I'm iffy about this, but if Apple doesn't get greedy and goes about this the right way this could be good for Apple and the accessory makers. Specifically, the article talks about Apple possibly feeding back into the iPod program with upgrades and/or increased marketing. if they increase the number of people buying iPods and increase the number of people buying accessories, it could end up driving up not only their profits but those of the accessory makers as well.

~J

[nagromme]

Important fact: nobody HAS to participate.

Voluntary doesn't = "tax" to me.

It's a marketing program to benefit both parties. If a company doesn't find the "Made for iPod" logo worth the price (such as if Apple doesn't do enough to promote it) then they don't have to use it.

Making money is inherently greedy, of course. Apple should not try to make any profit off of the huge sub-economy that has sprung up around the iPod ;)

[Dont Hurt Me]

Official: Apple = Microsoft.



irmongooseYeah i have noticed this the past few years they both are Monopolies and both are very Greedy.
I cant make any excuses for Apple but there will be plenty of fan boys telling us how Apple does no wrong. Greed sucks. Apple has billions but i guess its not enough.

[edesignuk]

I'm not liking the path Apple have been going down recently. Suing all over the place, now this.

tut tut :rolleyes: :mad:

[edesignuk]

Apple provides guidelines and tech specs. Accessory makers get a way to stand out. Seems like a good business deal. Apple is a publicly held business, makes sense that they would take advantage of an opportunity.
I'm 99% sure you wouldn't say that is this were MS.

[mpw]

I'm not liking the path Apple have been going down recently. Suing all over the place, now this.

tut tut :rolleyes: :mad:

...cheap entry-level products, two button mouse rumoured pandering to the consumers desires... it's almost like they're trying to run Apple as a business to make money.

...Yeah i have noticed this the past few years they both are Monopolies...
Both monopolies?

[edesignuk]

...cheap entry-level products, two button mouse rumoured pandering to the consumers desires... it's almost like they're trying to run Apple as a business to make money.That's unrelated. The point is how many people seem to be happy for Apple to piss on them, when if MS did the same (which of course they already do) you'd all be going bonkers.

Yes, Apple is a business, but that doesn't mean they have to be like MS, which apparently everyone hates :rolleyes:

[Applespider]

I'm in 2 minds about this - I'm not sure I like it but I can see the business reason for doing it.

Apple has tended to shy away from the iPod accessory market (aside from socks, cables, chargers) and allowed others to do it. If Apple started making some of these accessories (and their known product timeframe would allow them to be first to market), then I wonder how many of the 3rd party accessories would simply fall by the wayside. This way perhaps the developers give up a little but if Apple promote their products more, they get increased sales, increased marketing footprint and overall, more money. And if Apple are willling to share a little more details on the upgrade path (subject to multiple NDAs I'm sure! :rolleyes:), their product cycle improves too.

[Chip NoVaMac]

My only concern is the 10% figure. That seems way too high.

[nagromme]

I'm 99% sure you wouldn't say that is this were MS.
If MS did it, and abused their monopoly power to force all companies to lose their business, that's a different story.

Does anyone really think that companies who choose not to participate in this will somehow be forced out of business? Maybe with MS.

I'm also unclear on how these hardware accessories are an exact parallel to Microsoft software components.


The point is how many people seem to be happy for Apple to piss on them,
If that's how the feel about the program, they simply don't have to participate in it.

[wordmunger]

My only concern is the 10% figure. That seems way too high.

Well, now that you know it, you can limit yourself to products without the "made for iPod" logo (remember, it's a voluntary program!). Save yourself some bucks!

[SiliconAddict]

Sorry but it has to be said. Apple's behavior over the last year is starting to really irk me. This is the crap I'd expect to see out of Microsoft. In point of fact this behavior is WORSE then Microsoft because by and large they put out cease and desist letters to the offending parties vs. suing them into the ground. I never thought I would EVER say this but MS’s behavior is actually starting to become palatable. I know that is a sin to say but there it is. All I know is Apple better knock this **** off.
In regards to the Apple “tax” Does anyone know if it costs cash for people to be tagged as a PlayForSure item under Microsoft’s branding scheme?

[irmongoose]

Does anyone know if it costs cash for people to be tagged as a PlayForSure item under Microsoft’s branding scheme?

Well I dug around and it seems that only those who are certified WMA licensees can get the PlaysForSure logo. According to Pricing Schedule (pdf) (http://download.microsoft.com/download/8/f/0/8f01eecc-2b11-4eb2-b218-859a4a86e0f7/WMFCDistAgreement-Sample.pdf), the prices are 10 cents royalties on every product PLUS $400,000 ~ $800,000 annually. Am I reading this correctly?



irmongoose

[SiliconAddict]

depends on how apple wants to collect this 'tax' after all these people are riding on apple's success, apple has to approch this from the right angle to not fall on its face

i am not sure about this...this is definately going to raise some risks though, not to mention a lot of other issues

No it’s a symbiotic relationship as far as I’m concerned. Apple could never keep up with the demand on accessories. Not only is their distribution channel slow as hell but the R&D costs would kill them. Who do you think is getting a better deal out of someone making a set of speakers for Apple. Apple because its one product that they don’t have to build for themselves while still reaping the rewards of having such a device for their iPod or the manufacturer who has to design, produce, package, ship, and support that product. The depth and width of accessories is one of the many reasons why the iPod is so successful. I mean for the love of god does any other MP3 player have Bose speakers designed for it?
Again this is the behavior I would expect out of Microsoft not Apple. Then again their behavior as of late is a lot Microsoftish.
We sure that Bill Gates didn’t pull a coup when Steve was in the hospital last year? ;) :(

[Lord Bodak]

Nothing wrong with this. You want the logo, you pay for the logo.

The headline is misleading though. It's not a 'tax' on accessories since it's a voluntary program.

[coolfactor]

Apple created this market, even if they weren't the first to market with a portable digital music player. NONE of these 3rd parties would be making a dime from the iPod industry if Apple didn't invent the iPod in the first place. Companies are trying to capitalize on the huge popularity (which will eventually fade into mainstream). I recently spoke with the folks at shuffleshirt.com and they clearly stated the price of their shirts "are in line with current iPod accessories". They weren't interested in offering consumers a reasonable-priced product because they knew people would pay for the shirts at the current price, which is obviously a premium.

Apple knows that cheap products make for cheap products. The "value" of products across the board goes down if we only focus on lowering the price. It doesn't really help anyone. If someone can't afford something, it's not up to the company to lower the price, but up to the person to make more money. That's my take.

[suntzu]

Who do you think is getting a better deal out of someone making a set of speakers for Apple. Apple because its one product that they don’t have to build for themselves while still reaping the rewards of having such a device for their iPod or the manufacturer who has to design, produce, package, ship, and support that product. (

But it isn't always the case and that's why the "made for iPod" branding is useful. Not every product that comes out from 3rd parties are great. Some of them are down right crappy and they don't work as stated. These companies that make these products end up harming Apple because the average consumer will most likely chose the cheaper of two similar products not knowing there's a difference in quality.

Using Bose as an example, if you were an average consumer and you had to pick between the bose speaker set or an off name brand costing 30% less, which would you pick?

[Rincewind42]

If you notice at the very beginning of the article they state that Apple went from requesting 10% retail to 10% wholesale. Given that wholesale is less than retail, I would think that is fairly strong evidence that this is really just Apple trying to cover costs and provide more services to people who make them a lot of money.

It's much like the ADC program. People constantly scream about how much it costs to be a select member, but when you look at what you get (assuming you use it all at least) the service MORE than pays for itself. I suspect that a lot of accessory makers will look at the program and say to themselves that they would save a LOT of money going with the program than not.

[nbs2]

Microsoftish? Monopolistic? I thought this was nothing different than the cookies, cakes, etc. that you can buy in any supermarket.

Any of you who don't live off of generic items, look in your cupboards. Those who do, go to your grocery store. You'll find cookies made with "Real Nestle's Chocolate Chips," brownies made with "Real Hershey's Cocoa," etc. Companies are willing to pay more to use those products even if they can get a generic version of the same quality. Why? Becuase morons like me believe that adding the packet of Hershey's Syrup that comes with the cake mix will make it taste better. Because I don't know if other frostings are made with butter, but Betty Crocker says she uses it, so I won't buy anything else.

The PlayForSure campaign is brilliant. It unites all of the Apple competitors under one banner. To see the difference between fighting for yourself or together, please watch Braveheart (enjoyable little movie). Anyway, while Apple waiting until now to do this is a bit risky, I think it is a safe move. As mentioned earlier, there is no obligation to join the program and there is no reason to distrust those without the logo. But, I promise you that there are many millions of morons out there just like me. And they will be drawn to the officially sanctioned logo. And that will drive up their sales. And it will make Griffin much money. And it will make Apple much money. And it wiil be good for all involved. In fact, I think that those who choose not to market will find it beneficial to try to join.

I think many of you out there prefer to use Apple products because you believe they are of a higher quality. Am I right? Apple is saying that they put their name behind every certified product. Think of it as being an Apple product, manufactured by Belkin.

As for being upset at MS for doing the same thing, I beg to differ a little. I think a lot of the people here that would be upset with MS are upset with anything MS does and see a constant ulterior motive to any of their good that they may produce (don't ask for examples). If you went to MicrosoftRumors, I think you would see that those posters would be "apologetic" of an MS program and mock a similar action by Apple.

In short, Apple is doing nothing more than putting a seal of approval on the box, reassuring customers that nothing will hamper the enjoyment of their iPod investment. And those people who are reassured will be the same ones paying more to their car dealer for AC Delco/Mopar/Honda/Toyota certified parts while eating their authentic Oreo ice cream on top of a brownie that was made with Reas Hershey Chocolate Chips and Hershey's Syrup.

[Kagetenshi]

I'm 99% sure you wouldn't say that is this were MS.
That's correct. Because Microsoft has a history of bad decisions, while Apple has a history of good decisions. It'll take a good bit more evidence and a few more years for all of that good will to wear away, in my opinion.

And as for the lawsuits, nail the bastards to the wall. Apple is clearly in the right here. I wouldn't cheer them on, but I wouldn't fault Microsoft for acting similarly.

In point of fact this behavior is WORSE then Microsoft because by and large they put out cease and desist letters to the offending parties vs. suing them into the ground.

Seriously. Shut up until you're willing to look at history. Apple has sent cease and desist letters for years. This is a case of the same people injuring Apple again and again. Finally it got to be too much. In each case the people involved had received dozens of C&D orders in the past; in fact, it's been suggested that Think Secret received a C&D on the Mac Mini announcement and ignored it.

As a potential future shareholder, Apple better keep this up or I'm dropping them like a hot brick.

~J

[nagromme]

SOME accessory makers seem to think they'll make MORE money with this program, not less! They'll sell more volume.

To my mind, that depends on Apple spending money to market the program (or market iPods in general even more than before!) and thus living up their end of the deal by drumming up demand for accessories.

If Apple doesn't do that, then I suggest that accessory makers should make the choice not to participate.

I'd also like to know just what "up to" 10% of wholesale translates to. Is it always 10% or not? And how MUCH lower is wholesale? And how many makers will actually raise their price on existing products in order to participate? Very few, I'd guess--THAT would hurt sales. And exactly which kinds of accessories call for payment? Not all of them, it seems.

[Iroganai]

If you went to MicrosoftRumors,
I just checked there are no www.microsoftrumors.com :)