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View Full Version : Steve Jobs says no to Real Networks


1macker1
Apr 16, 2004, 08:50 AM
I wonder if this mean real will use WMA

http://apnews.excite.com/article/20040416/D81VT5J00.html

srobert
Apr 16, 2004, 08:55 AM
I'm not sure if it's a good decision or not. I'll let the thinkers decide.

The only thing that bothers me his Steve's statement:

"The iPod already works with the No. 1 music service in the world, and the iTunes Music Store works with the No. 1 digital-music player in the world," he said. "The No. 2s are so far behind already. Why would we want to work with No. 2?"

Developpers could use the same argument why not develop software for the mac platform. In the computing world, Apple IS number 2 and FAR BEHIND de leading PC platform (In user base).

Just my 2 canadin cents. (1.48 US Cents)

Nny
Apr 16, 2004, 09:12 AM
Steve to Real: We're Number One, and Your Full of Number Two!!!

srobert
Apr 16, 2004, 09:15 AM
I can't help thinking that Bill Gates went: "Phew! Close call *sigh of relief*" in is office.

jxyama
Apr 16, 2004, 09:20 AM
I wonder if this mean real will use WMA

http://apnews.excite.com/article/20040416/D81VT5J00.html

i don't even know if M$ will partner up with Real to begin with. not apple doesn't mean M$.

it might be time for Real to pay up for their awful past treatment of the users - they may be left out to be hung dry by both M$ and apple for all we know...

agreenster
Apr 16, 2004, 09:27 AM
The only thing that bothers me his Steve's statement:

"The iPod already works with the No. 1 music service in the world, and the iTunes Music Store works with the No. 1 digital-music player in the world," he said. "The No. 2s are so far behind already. Why would we want to work with No. 2?"

Developpers could use the same argument why not develop software for the mac platform. In the computing world, Apple IS number 3 and FAR BEHIND de leading PC platform (In user base).


This is an extremely good point.

Fukui
Apr 16, 2004, 09:30 AM
Real will not go MS. Steve knows this. Steve isn't like other business men who go out and say things with a straight face, he's a poker player AFAIK. By rebuffing Real, he can either find thier Real intentions, or get better concessions from Glasser because he will be more desparate. And if Glasser Really pursues this after this rebuff, it means he is probably sincere. Remember, even MS "partnered" with Apple, and we all know how that turned out *hint* knife-in-back.

Grimace
Apr 16, 2004, 09:41 AM
Even though it might be nice to sell more iPods, if Real is using its own download service, that is competition (big or small) for Apple.

I think the smarter route is to partner with PC manufacturers like HP. That was BRILLIANT for Apple. Get them to use the software, they might buy hardware too - less need to worry about formats that way.

jxyama
Apr 16, 2004, 09:45 AM
Developpers could use the same argument why not develop software for the mac platform. In the computing world, Apple IS number 2 and FAR BEHIND de leading PC platform (In user base).

in pure number, yes, but probably not in terms of potential revenue/profit.

software companies will continue to develop for Mac as long as there's revenue to be made and profit to be taken. if prosumers using Macs will be shelling out a couple of hundred to thousand dollars for pro apps, those will continue to be made.

i am not sure if the same can be said for online music. the margin is very thin. #1 or #2, i am not sure if there's much more money to be made.

just a counterpoint. may not really be valid, though.

but in this case, it's probably good to wait a bit to find true intentions of Real. they are the ones in desparate need of help and publicity, not apple. they definitely aren't in the position to dictate what deals are to be made.

instead of Apple being questioned why they turned down Real, it's the other way around. people will be asking why Real was turned down by Apple.

yamabushi
Apr 16, 2004, 12:40 PM
I think this is very bad news. It appears that Real was mostly interested in the Fairplay DRM so that they could sell music that would play on iPods. This would have benefitted Apple by increasing the perceived value of both iPods and AAC encoded music. Music sales lost to Real would have been offset by fees for the DRM and some increased demand for iPods. Think of Real as a potential 3rd party supplier of software(actually data) for Apple's hardware. This is a good thing for Macs - why not iPods?

1macker1
Apr 16, 2004, 01:12 PM
I dont like steve, he's and arrogant A**hole. I mean, just look at his statements.

P-Worm
Apr 16, 2004, 01:32 PM
I think you guys are missing something. Let's take a look at the whole picture here:

Apple has stated that the purpose of the store is not to make money, it's to sell iPods. And the purpose of the iPod is to sell computers by showing Apple's style/innovation. We know this.

Enter Real stage left:

Real is making their own store, but they are just trying to make money off of it (which Apple knows is next to impossible). Real wants to side with the iPod because it kicks the trash of every MP3 player it comes across. Real just wants to have the greatest installed base from the get go. This is very smart becuase it could potentially make their store be more popular than the rest.

The scene begins:

Apple has no incentive here. It throws their strategy out the window. Their strategy has to go in a certain order here, iTMS->iPod->computer. With Real here, the cycle looks like iPod->choice of music store. Computer isn't even in that mix. Do we honestly think that Real's music store is going to sell a bunch of iPods? What if they get the syncing wrong or something? It will make the iPod look like a bad product when it isn't. Then people go back to Apple is putting out the same old garbage not knowing what is actually going on.

The only winner here is Real who would get a boost for their store.

Of course, this would be different if ALL the music stores were compatible with the iPod, that would encourage people to get iPods which would lead to computers (maybe, again it depends on how well the software and iPod treat each other). But we all know that all of the other stores besides the iTMS is WMA. I'm going to side with Steve on this one.

P-Worm

yuc7zhd2
Apr 16, 2004, 02:04 PM
This behavior is the reason that the current platform placement is 90% microsoft and not 90% Mac OS. Real won't threaten apple's marketshare in the music department - people who use iTunes use it because they know its better. The Real agreement would have exposed a lot of Windows users to apple products, and hopefully quality. Bad bad bad bad bad bad decision.

jxyama
Apr 16, 2004, 02:25 PM
The Real agreement would have exposed a lot of Windows users to apple products, and hopefully quality. Bad bad bad bad bad bad decision.

Real itself has a notoriously bad rep, with many, many windows users still pissed off from their past (and current) business practices. they are far from being an ideal partner for apple to show off its quality products to windows users.

Dont Hurt Me
Apr 16, 2004, 02:52 PM
This behavior is the reason that the current platform placement is 90% microsoft and not 90% Mac OS. Real won't threaten apple's marketshare in the music department - people who use iTunes use it because they know its better. The Real agreement would have exposed a lot of Windows users to apple products, and hopefully quality. Bad bad bad bad bad bad decision.I agree rather then expanding the market base Apple said its my Player! Mine Mine Mine. didnt they learn anything from the OS wars they lost?

Phatpat
Apr 16, 2004, 03:17 PM
Real is dying. They were just begging for life from Apple. How many people are happy when they get to use realplayer? I don't think allying with Real would have helped Apple much. Steve is a smart guy, I'll trust in his decision on this one.

rueyeet
Apr 16, 2004, 03:32 PM
Do we honestly think that Real's music store is going to sell a bunch of iPods? What if they get the syncing wrong or something? It will make the iPod look like a bad product when it isn't.

You've got it nailed.

Real is looking at this like the PC-based company they are, which means that to them, the hardware and software should be interchangable, mix-and-match components. Apple likes, usually for better even if sometimes for worse, to do that "whole widget" thing so that they don't get screwed on end-user experience, and thus customer perception, by a third party they don't have any control over. They already gave a lot of ground there by making iTunes and the iPod for Windows, but that's no reason to give away the farm.

And if they're going to partner with another download service, Real wouldn't be my choice. I've gotten to a point where I won't install their player, free or paid, on any computer I own, and especially not a Windows box. It's annoyware, constantly bugging you to download updates, and I have yet to find the setting that tells it to shut up and get the ******* out of the system tray, and that's not even counting the ad-crap it tries to throw at you under the guise of "content." :mad:

Awimoway
Apr 16, 2004, 03:58 PM
I dont like steve, he's and arrogant A**hole. I mean, just look at his statements.

I pretty much agree. Oh, I'm happy for many of the decisions he's made, as I'm a loyal Mac user. But he can be a real pr*** much of the time. For example, if Apple wasn't always so pissy with Best Buy, I bet sales would be significantly higher. If he wasn't so insistent on running all sales through those sparsely distributed Apple Store money pits, sales would be a lot better. If they had implemented Marklar and embraced x86 (proprietary hardware would still have been possible), sales might have been a lot higher rather than turning to also-ran chip makers like Motorola and IBM who constantly have delays.

And on and on and on.

Jobs has at least as many failures as successes. Nowadays they are typified by arrogance. There was a superb article last fall in New York Times Magazine that came out on the anniversary of the iPod that basically said Steve thinks Apple is the one and only cool company in the computer business. And for him it's all about being cool. Having cool products, cool interfaces, being cooler than thou, etc. Now as a paying customer, I agree that everything they put out exudes coolness and is a pleasure to use. But there is a downside to being cool, an arrogance that Jobs seems to be totally unaware of. Arrogance makes enemies. A lot of people hate Macs and Mac users because we are an arrogant, insular lot. A lot of potential buyers are turned off by how locked-in owning a Mac seems to make you. And the marketplace does not tolerate irrational impediments like arrogance, so Apple continues to languish at the bottom.

Apple is too obsessive about how the product looks. I'm sure he turned Real down because their store and products just aren't as nice. He doesn't want to "taint" the Apple brand with a subpar product. But I don't think Apple's in a position to turn down anything that will help them strengthen their market position. In that article I mentioned, Steve hints at a fatalistic outlook concerning the iPod. He expects it to be eventually superseded by inferior products. Well that's just idiotic. It doesn't have to be that way. Steve just needs to be a little more open.

Big, big mistake. What an ass.

Makosuke
Apr 16, 2004, 05:09 PM
At first, I was thinking this was a good thing, but Seve would turn it down out of principle or because Glasser "publicly" threatened him. And I may have been right. However, I'm wondering if Apple's decision to turn Real down wasn't actually a wise move. What does Real sell that iTMS doesn't already, after all, and do they do it any better than the iTMS does?

P-Worm hit the reason it right on the head:

...Do we honestly think that Real's music store is going to sell a bunch of iPods? What if they get the syncing wrong or something? It will make the iPod look like a bad product when it isn't. Then people go back to Apple is putting out the same old garbage not knowing what is actually going on.

The only winner here is Real who would get a boost for their store....

And, Awimoway makes the same point in reverse:
Apple is too obsessive about how the product looks. I'm sure he turned Real down because their store and products just aren't as nice. He doesn't want to "taint" the Apple brand with a subpar product. But I don't think Apple's in a position to turn down anything that will help them strengthen their market position.

How much market share would Real's store actually gain the iPod, and at what cost? Real is notoriously heavy-handed in their advertising, and their store hasn't exactly been a rousing success so far.

One possibility is that Apple gives them the cool tech, Real's store gains a big boost from it, the iPod gets even more buyers, and everybody is happy.

Another possibility, though, is that Apple gives them the cool tech, Real does nothing but cannibalize sales from the iTMS (no biggie, since the iTMS isn't profitable anyway), doesn't sell any significant new number of iPods, and creates big support hassles when the Real store doesn't synch properlly with the iPod.

Think about that last point; why does everybody love the iPod/iTMS so much? They work so smoothly together. But adding Real's store to that mix is sure to cause at least minor problems with synching from two apps (do you play Real's content through iTunes? I don't think so. So how does synching work--do you have to choose only one store? And if so, is Real's option really better than iTunes for that? I don't think so). And once you've got those problems, you've got direct competition for what app people use to manage and synch to their iPods.

And you're GUARANTEED to get higher support costs and more complaints about iPods not synching properly with Real's stuff. Sure you can tell people that "it's Real's fault", but no customer wants to hear that. And Apple's been dropping the margins on the iPod to sell more volume--more support costs are going to cut those even thinner.

I'm not saying this is the only way it could play out, but I'm really not sure how much apple stands to gain from this relationship now that I think about it harder. There will be a time to open AAC and Fairplay up, but I'm not sure the partner to do it with is Real, and now isn't necessarily the time.

It's also interesting that Steve's bargaining power just tripled, too--because of these leaks, MS knows that Real is desperate and flailing, and there's only one place to go now: Microsoft. So, if MS decides to buy or partner with Real, it's now a cheap deal compared to what it would have been last week. I don't think MS will even bother, personally, leaving Real to wither and die unless Apple eventually goes for the buyout.

yuc7zhd2
Apr 16, 2004, 05:52 PM
I think one important thing that we're forgetting in all of this brainstorming is that there is an iTMS for windows. There is also, unfortunately, a user base for the Real download whatever it is. I was just telling a friend who is home on holiday about how great rendezvous and tivo are, and he told me that he doesn't care about iTunes because he is a real subscriber and he gets this and that and cheap and the other thing. Once these people who use Real players get frustrated with how bad the syncing sucks, if it does suck, which it might not (in fact, it could be wonderful, and they could love the ease of the iPod, gain respect for apple and buy an Apple computer) they will call apple as you have suggested. But when they call apple, the service reps will tell them to download iTunes if the iPod isn't working right, and everything is well for apple. In fact, Real will be delivering customers to apple.

titaniumducky
Apr 16, 2004, 06:09 PM
Frankly, it's tough to decide whether Apple made the right decision.

Licensing the Fairplay DRM would have brought them some money and potential iPod sales.

However, if Real's implementation sucked (as Real's history indicates it probably would have), it could give APPLE a bad name because Real already has one.

I think the risk was larger than the gain.

hulugu
Apr 16, 2004, 06:16 PM
I think this is very bad news. It appears that Real was mostly interested in the Fairplay DRM so that they could sell music that would play on iPods. This would have benefitted Apple by increasing the perceived value of both iPods and AAC encoded music. Music sales lost to Real would have been offset by fees for the DRM and some increased demand for iPods. Think of Real as a potential 3rd party supplier of software(actually data) for Apple's hardware. This is a good thing for Macs - why not iPods?

I was thinking the same thing, except now I'm not so sure this was Real's intention:

RealNetworks spokesman Greg Chiemingo..."We want support for all media formats," Chiemingo said, "and it makes sense for us to make the most consistent experience for consumers so they can move their content to whatever device they want."

The deal they made have offered might have been detrimental in some way to Apple, or maybe Steve believes Apple can go it alone without partners who have their own agendas.
I like the idea that someone posted in the original forum thread that Apple should just buy Real, turn Real servers into iTunes servers, and make QT the streaming codec in place of Real's crappy services. Thus, QT makes a greater inroad to streamed media, and once everyone has QT on their machines, going to MPEG4 w/ Fairplay will be made easier for users.
I just don't trust Real and the only way this is going to work is for Apple to attain the greatest advantages possible while locking Real into a system they can't break easily. Jobs, I hope, is playing poker feigning disinterest while looking for a great deal.

Sparky's
Apr 17, 2004, 01:15 PM
This article added a little more,
http://story.news.yahoo.com/news?tmpl=story&cid=77&ncid=738&e=7&u=/mc/20040416/tc_mc/appleandrealnetworkstherealstory

Kinda reminiscent to Jobs decision to pull licensing to the OS and thereby shutting down the clone market. Same thing here, he's just a stubborn S.O.B.

applebum
Apr 19, 2004, 12:25 AM
For example, if Apple wasn't always so pissy with Best Buy, I bet sales would be significantly higher.

What??? Best Buy is one of the worst stores around. I only go in there when I know exactly what I want and I know they have the best price. I certainly don't expect to get good help. And if the product isn't on the shelf where it should be....good luck getting it. The employees don't know much, and then they simply push what they know and the wonderful add on "would you care for an extended warranty with that?" Who cares if it is only a $20 product, why not pay and extra $5 for that 3 year warranty??? I think Steve has been more than generous and should have demanded results if they wanted to keep Apple products. You have to be an educated consumer when you shop at Best Buy, and that does not translate as a switcher.

hulugu
Apr 19, 2004, 01:47 AM
What??? Best Buy is one of the worst stores around. I only go in there when I know exactly what I want and I know they have the best price. I certainly don't expect to get good help. And if the product isn't on the shelf where it should be....good luck getting it. The employees don't know much, and then they simply push what they know and the wonderful add on "would you care for an extended warranty with that?" Who cares if it is only a $20 product, why not pay and extra $5 for that 3 year warranty??? I think Steve has been more than generous and should have demanded results if they wanted to keep Apple products. You have to be an educated consumer when you shop at Best Buy, and that does not translate as a switcher.

I have to agree, Best Buy is a terrible store to shop at. The staff are typically clueless and warrenty happy, and the stores have always treated the Macintosh—when they've sold them—with contempt. The iPod has changed this to a point, I see many iPod displays, but this is half-hearted at best. If Apple is really serious about selling its products, it must protect the CompUSA store-within-a-store, the Resellers, and it must continue the Target iPod/iTMS kiosks. It's not necessary to sell a Mac in every possible location, but rather it must have a wide availibility so that if someone wants a Mac, not only can they see one, but they can see one in good shape, in a clean area with knowledable staff. To do anything else is a waste of time.
If Apple finds sucess in the Best Buy pilot program I would be happily surprised, but I can barely get the guys there to find a Memory Card, much less describe the difference between the iPod and a Rio Karma, and why either would be a good choice.

Awimoway
Apr 19, 2004, 02:07 AM
What??? Best Buy is one of the worst stores around. I only go in there when I know exactly what I want and I know they have the best price. I certainly don't expect to get good help. And if the product isn't on the shelf where it should be....good luck getting it. The employees don't know much, and then they simply push what they know and the wonderful add on "would you care for an extended warranty with that?" Who cares if it is only a $20 product, why not pay and extra $5 for that 3 year warranty??? I think Steve has been more than generous and should have demanded results if they wanted to keep Apple products. You have to be an educated consumer when you shop at Best Buy, and that does not translate as a switcher.

Well you are not everyone. I know a lot of people who consider that place the only electronics/computer store worth bothering with. I don't agree, but I'm not everyone either. ;)

Anyway, the problem Apple had with Best Buy was rather specific. Apple insisted that Best Buy stock an even number of all CRT iMac colors regardless of which ones actually sold. From Best Buy's point of view, it was utterly illogical and I can see why they felt that way. Of course, that was several years ago. I don't know the precise details of what went wrong with the recent trial, but my understanding was that essentially the same differences in philosophy existed. And this is my point. Apple is utterly tone deaf to the way business is done. They are so full of themselves sometimes, thinking so damn differently that they offend and alienate themselves right out of serious contention. They're too ****ing proud for their own good.