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Can Apple Make Nice With the Media Moguls?

By Richard Adhikari MacNewsWorld ECT News Network
May 4, 2011 5:00 AM PT

Apple appears to be softening its stance toward the publishing industry with a move that might help stave off the burgeoning competition.

Can Apple Make Nice With the Media Moguls?

Separately, the company introduced new products in its all-in-one iMac desktop computer family Tuesday, possibly in anticipation of strong sales due to an improving overall economy.

Meanwhile, Cupertino's charge into the enterprise sector continues, with Oracle announcing, also on Tuesday, new releases of its business intelligence products that support the iPad and iPhone out of the box.

Apple, which reported record results for Q2, FY 2011, is expected to continue doing well over the long term, Barclays Capital analyst Ben Reitzes wrote in a note to investors.

Freedom for the Press

Time Inc. and Apple reached a deal under which subscribers to Time's print publications will be able to access the digital versions of their magazines on the iPad at no cost, The Wall Street Journal reported Monday.

This affects subscribers to Sports Illustrated, Time and Fortune magazines.

The move is an extension of the arrangement Time has with Apple for People Magazine on the iPad.

Subscribers to print versions of Time's publications will only get free access to the digital versions of the magazines they're already signed up for. "If you're a Fortune subscriber, for example, you only get access to Fortune," Time spokesperson Summer Wilkie told MacNewsWorld.

Time will continue single-copy sales of these magazines on the iPad, Wilkie said.

Making Nice With Publishers

Apple's move could signal a softening of its stance on digital publishing. The company has previously locked horns with the publishing industry on various counts.

One issue has been its insistence that anyone who wants to subscribe to a digital copy of a publication on the iPad sign up through the iTunes App Store instead of going through the publisher. Another bone of contention has been Apple's refusal to share information with publishers about subscribers who sign up directly through the iTunes App Store.

Five major publishers in the United States, including Time, News Corp and Hearst, have set up a consortium, Next Issue Media, to look at launching a digital newsstand on the Android platform next year.

Both Time and Fox have publications on the iPad, but business is business, eh?

Meanwhile, Time has also entered a deal with HP to put its magazines on HP's forthcoming TouchPad tablet. This will run on webOS, the operating system HP acquired with its purchase of Palm. The magazines that will be on the TouchPad: Time, Sports Illustrated and People.

In addition to the potential competition, Apple's seeing magazine subscriptions on the iPad fall, and this may have spurred it to be more willing to modify its stance.

"The bloom has come off the rose for magazine on the iPad, and Apple probably wants to do all it can to keep publishers engaged while this market opportunity evolves," Allen Weiner, a research vice president at Gartner, told MacNewsWorld. "I think Apple's motivated from its careful review of the drop in magazine downloads from its store. If the numbers were rising, I cannot be certain they would have been so agreeable with Time, Inc."

The problem is due to the publishing industry's inability to come to terms so far with the brave new digital world, Weiner suggested.

"Offering replicas of print magazines is not it," he elaborated.

Leveraging the Desktop Market

Apple on Tuesday unveiled four additions to its iMac family of all-in-one desktop computers. Two are 21.5-inch devices, and the other two have 27-inch screens.

They all run on Intel quad core i5 processors, have Thunderbolt I/O ports, feature new AMD Radeon HD graphics processors, have built-in FaceTime HD cameras and use integrated memory controllers. Prices range from US$1,200 to $2,000.

"Mac desktop sales always get a significant bump when Apple comes out with an update," Laura DiDio, principal at ITIC, told MacNewsWorld. "In the first fiscal quarter of 2010 Apple completely redesigned the iMac and saw a 70 percent increase year over year."

Apple may have timed the release of the new iMacs just right -- Barclays Capital analyst Ben Reitzes told investors in a note that PC shipments, exclusive of the iPad, chalked up their first growth year over year in March, being up 4 percent.

In March, Mac sales grew 47 percent year over year according to data from NPD, Reitzes said. That was likely due to the launch of new MacBook Pros at the end of February. Reitzes believes Mac sales will continue to grow over the long term even while iPad sales remain strong.

Charging Into Corporate America

Over the past few months, many corporations have reportedly begun replacing executives' laptops with iPads.

That move was underscored Tuesday by Oracle, which introduced new releases of its business intelligence software that offer iPad and iPhone support out of the box.

The products are Oracle Business Intelligence, Oracle Business Intelligence Applications and Oracle Real-Time Decisions. Oracle Business Intelligence Release, which provides the underpinnings for the other two applications, is optimized for use with the iPad and iPhone without requiring design changes to existing reports and dashboards, Oracle said.

Oracle's database is widely used in the enterprise and government sectors, so the out-of-the-box support for the iPad and iPhone underscores Apple's penetration of these sectors.

The Future Is All Roses

In another note to investors, Barclays Capital's Reitzes said iPad 2 delivery lead times have fallen from two to three weeks to one to two weeks. This indicates that sales will be "much higher" quarter over quarter in the period ending June 30, he opined.

Barclays Capital's revenue estimates for Apple are "conservative" over the long term, Reitzes said. He suggested Cupertino is of the same view.

Apple did not respond to requests for comment by press time.

The company's shares closed at $348.20 Tuesday, up $1.92, bucking the general market trend.

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