Apple -Merging Technology, Business,
Apple Computer Inc., back from near oblivion, is setting the pace in the digital world with innovation and creativity that has been missing from the company for the past
20 years. The introduction of the iPod, a brilliant merger of technology, business, and entertainment, catapulted Apple back into the mainstream.
CAPITALIZING ON NEW TRENDS
In 2000, Steve Jobs was fixated on developing video editing software for the Macintosh. But then he realized millions of people were using computers and CD burners to make audio CDs and to download digital songs called MP3s from illegal online services like Napster. Jobs was worried that he was looking in the wrong direction and had missed the MP3 bandwagon.
Jobs moved fast. He began by purchasing SoundStep from Jeff Robbin, a 28- year-old software engineer and former Apple employee. SoundStep was developing software that simplified the importing and compression of MP3 songs. Robbin and a couple of other programmers began writing code from scratch and developed the first version of iTunes for the Mac in less than four months. This powerful and ingenious database could quickly sort tens of thousands of songs in a multitude of ways and find particular tracks in nanoseconds.
Jobs next challenged the team to make iTunes portable. He envisioned a Walkman­ like player that could hold thousands of songs and be taken anywhere. The idea was to modify iTunes and build a tiny new system for what was basically a miniature computer, along with a user interface that could sort and navigate music files with the same sophistication as iTunes on the Mac. The iPod was born nine months later.
Jobs noticed that one last key element was missing, an online store for buying downloadable songs. Such a store would need an ebusiness infrastructure that could automatically deliver songs and track billing and payments for conceivably millions of purchases. In the spring of 2003, 18 months after the launch of the iPod, Apple's iTunes Music Store opened for business. The company's goal was to sell 1 million songs in the first six months. It hit this goal in six days.

CAPITALIZING ON THE IPOD

With millions of iPods in the hands of consumers, other companies are noticing the trend and finding ways to capitalize on the product. John Lin created a prototype of a remote control for the iPod. Lin took his prototype to Macworld where he found success. A few months later, Lin's company had Apple's blessing and a commitment for shelf space in its retail stores. "This is how Apple supports the iPod economy," Lin said.
In the iPod-dominated market, hundreds of companies have been inspired to develop more than 500 accessories-everything from rechargers for the car to $1,500 Fendi bags. Eric Tong,vice president at Belkin, a cable and peripheral manufacturer, believes that75 percent of all iPod owners purchase at least one accessory-meaning that 30 million accessories have been sold. With most of the products priced between $10 and $200 that puts the iPod economy well over $300 million and perhaps as high as $6 billion. Popular iPod accessories include:

Allee Lansing Technologies-iPod speakers and recharger dock ($150).
Belkin-TuneCast mobile FM transmitter ($40)
Etymotic Research-high-end earphones ($150)
Griffin Technology-iTrip FM transmitter ($35)
Kate Spade-Geneva faux-croc mini iPod holder ($55)
Apple-socks set in six colors, green, purple, blue, orange, pink, and gray ($29)
Apple-digital camera connector ($29).

CAPITALIZING ON THE FUTURE

The latest iPod packs music, audiobooks, pod casts, photos, video, contacts, calendars, games, clocks, and locks in a design up to 45 percent slimmer than the original iPod. It also boasts stamina (up to 20 hours of battery life), generous capacity (30GB or 60GB of storage), a great personality (intuitive, customizable menus), and a touch of genius (the Apple Click Wheel). The latest features include:
Videos-Choose from over 2,000 music videos the iTunes Music Store or purchase ad-free episodes of a favorite ABC or Disney television show and watch them on the go.
Podcasts-The iTunes Podcast Directory features thousands of free podcasts, or radio-style shows, including favorites from such big names as ABC News, Adam Curry, ESPN, KCRW, and WGBH. Audiobooks-The digital shelves of the iTunes Music Store are stocked with more than 11,000 audiobooks, including such exclusives as the entire Harry Potter series.
Photos-With storage for up to 25,000 photos, iPod users can view photo slide shows-complete with music-on an iPod or on a TV via the optional video cable.

CAPITALIZING ON THE iPHONE

The Apple iPhone is a revolutionary new mobile phone that allows ustomers to make a call by simply touching a name or number in an address book, a favorites list, or a call log. It also automatically syncs all contacts from a PC, Mac, or Internet services, and it allows customers to select voice-mail messages in any order-just like email.
Customers can easily construct a favorites list for frequently made calls and can quickly merge calls to create conference calls.
The iPhone's most impressive feature is a rich email client. With its advanced Safari browser, one of the most advanced web browsers to be offered on a portable device, iPhone lets customers see web pages the way they were designed to be seen, then easily zoom in by simply tapping on the multi-touch display with a finger. Safari also includes built-in Google and Yahoo! search capabilities. The iPhone can multitask, allowing customers to read a web page while downloading email in the background over wireless networks. Expect the iPhone accessory business to be as powerful and vast as the iPod accessory business. A few of the new iPhone accessories include: iPhone Bluetooth headset-$149. iPhone doc-$49. iPhone stereo headset-$29.
Apple Doc Connector to USB $29.

iPod's Impact on the Music Business
In the digital era, the unbundling of COs through the purchase of individual tracks lets consumers pay far less to get a few of their favorite songs rather than buying an entire albuin. Many analysts predicted that the iPod's success coupled with the consumer's ability to choose individual song downloads would lead to increased revenues for music businesses. However, the industry is seeing individual down­ loads cannibalizing album profits and failing to attract new music sales. ''I've still never bought a download," said Eneka lriondo-Coysh, a 21-year-old graphic-design student in London who has owned a 10,000 song-capacity iPod for more than two years. "I do it all from my CDs," mostly hip-hop and soul.
The global music industry has been under siege for years amid declining sales. Record companies suffer from piracy, including billions of dollars in lost revenue due to bootlegged CDs. At the same time, music faces new competition for consumer time and money from video games, DVDs, and mobile phones. At traditional record stores, DVDs and games are taking an increasing amount of shelf space, squeezing out CDs. The music download numbers suggest that the iPod's iconic success is not translating into new music sales the way the evolution from vinyl albums to cassettes and then CDs did. For many users, the portable devices are just another way of stocking and listening to music, not an incentive to buy new music. iPod Security Leaks
Nike and Apple partnered to create a unique iPod accessory, the Nike iPod Sport Kit. The Kit consists of two components a wireless sensor that fits into Nike + Air Zoom Moire sneakers and a small white receiver that plugs in to an iPod Nano-that communicate using wireless radio protocols. The University of Washington's Department of Science and Engineering recently discovered that customers who use the kit while exercising are subject to an invasion of privacy by becoming a surveillance target. Researchers revealed that security flaws in the new radio frequency 10-powered device make it easy for tech-savvy stalkers, thieves, and corporations to track every movement an unsuspecting Sport Kit customer makes. With a simple surveillance tool, a malicious individual could track Sport Kit owners while they are working out, as well as when they are casually walking around town, a parking lot, or a college campus. With just a few hundred dollars and a little know how, someone could even plot a Sport Kit customer's running routes on a Google map without the runner's knowledge. The tracked individuals do not even need to have their iPods with them, just the RFID device.