Apple chief says company holding betting pool over new Yahoo service
Apple chief executive Steve Jobs has cast doubt on Yahoo's new $60-per-year music subscription service, proclaiming that Apple employees have started a betting pool to see when the internet search giant will raise its monthly rates.
Yahoo's $60 price-point is "substantially" below Yahoo's cost to run the service, Jobs said during his interview at Sunday evening's Wall Street Journal "D: All Things Digital" conference. He claims to have entered the pool himself, placing his money on "five months."
Jobs also attempted to dismiss the notion that cell phone service providers are likely to eat at Apple's dominate position in the digital music download market. He said downloading songs from the providers would likely offer "a lousy buying experience" at two or three times the cost of Apple's iTunes Music Store. "It's hard to see their customers as that stupid," he said.
Meanwhile, Jobs expressed his belief in the iPod "halo effect," noting stronger Mac growth over the company's last few quarters. Asked when Apple would reach a 10% market share, he said didn't know. "It's possible," he said. "...if people learn about our products, many of them choose them."
Commenting on security and viruses, Jobs said that since all computer makers face these challenges, it's not in his view to market machines that way. "One thing you never want to do in dealing with security and viruses is be cavalier," he said.
During his interview, Jobs also revealed that iTunes 4.9, a new version of Apple's digital music jukebox software, would add podcast support via a menu item. The menu will allow users to listen to podcasts and subscribe to them. Users of the new version, due out in the next 60 days, will also be able to categorize podcasts and sync them to their iPods, he said.
Additional notes from The Wall Street Journal "D: All Things Digital" conference are available in an earlier AppleInsider report.
Yahoo's $60 price-point is "substantially" below Yahoo's cost to run the service, Jobs said during his interview at Sunday evening's Wall Street Journal "D: All Things Digital" conference. He claims to have entered the pool himself, placing his money on "five months."
Jobs also attempted to dismiss the notion that cell phone service providers are likely to eat at Apple's dominate position in the digital music download market. He said downloading songs from the providers would likely offer "a lousy buying experience" at two or three times the cost of Apple's iTunes Music Store. "It's hard to see their customers as that stupid," he said.
Meanwhile, Jobs expressed his belief in the iPod "halo effect," noting stronger Mac growth over the company's last few quarters. Asked when Apple would reach a 10% market share, he said didn't know. "It's possible," he said. "...if people learn about our products, many of them choose them."
Commenting on security and viruses, Jobs said that since all computer makers face these challenges, it's not in his view to market machines that way. "One thing you never want to do in dealing with security and viruses is be cavalier," he said.
During his interview, Jobs also revealed that iTunes 4.9, a new version of Apple's digital music jukebox software, would add podcast support via a menu item. The menu will allow users to listen to podcasts and subscribe to them. Users of the new version, due out in the next 60 days, will also be able to categorize podcasts and sync them to their iPods, he said.
Additional notes from The Wall Street Journal "D: All Things Digital" conference are available in an earlier AppleInsider report.
Comments
I believe Yahoo! will subsidize their money-losing service with the earnings from their profitable businesses to drive the competitors out of business. It's right out of the Microsoft playbook.
Originally posted by macFanDave
I believe Yahoo! will subsidize their money-losing service with the earnings from their profitable businesses to drive the competitors out of business. It's right out of the Microsoft playbook.
That used to be illegal, I thought. Predatory practices, "dumping" and all that.
Originally posted by Chris Cuilla
That used to be illegal, I thought. Predatory practices, "dumping" and all that.
With Republicans in charge? I don't think so.
Originally posted by Chris Cuilla
That used to be illegal, I thought. Predatory practices, "dumping" and all that.
"lower than cost" pricing is only predatory (n the legal sense & if I understand things correctly) when its done to force a competitor out of the market. So "loss leaders" are legal--as their purpose is to bring people into your store, not to destroy the DVD or bread shop around the corner (of course, that can have that effect). Given iTunes is the "big" guy in the market, one could argue that what ever they're losing is simply a "marketing cost" to gain entry into the marketplace. In any case, it can usually only be called "predatory" if the company doing the pricing has substantial power in that marketplace. Yahoo doesn't?
Originally posted by mcdawson
"lower than cost" pricing is only predatory (n the legal sense & if I understand things correctly) when its done to force a competitor out of the market. So "loss leaders" are legal--as their purpose is to bring people into your store, not to destroy the DVD or bread shop around the corner (of course, that can have that effect). Given iTunes is the "big" guy in the market, one could argue that what ever they're losing is simply a "marketing cost" to gain entry into the marketplace. In any case, it can usually only be called "predatory" if the company doing the pricing has substantial power in that marketplace. Yahoo doesn't?
That's hard to say. It could be considered by the other subscription services that this is aimed at them rather than iTunes, which is a different model.
As Yahoo is doing rather well and has much deeper pockets than the other subscription services have, it could be considered predatory if Yahoo gains significant marketshare in that segment. Real, Napster, etc. could go to court over that issue rather than Apple which, if it's music download sales continue to increase, would see no reason to involve itself in that fray.
Originally posted by mcdawson
"lower than cost" pricing is only predatory (n the legal sense & if I understand things correctly) when its done to force a competitor out of the market.
Right...and that was my point.
Originally posted by Chris Cuilla
Right...and that was my point.
Just remember that "intent" can be very difficult to prove, or disprove.
The biggest thing Yahoo has going for them is their massive subscriber base. I'm not gonna sign up for Napster or Rhapsody, but I already have a Yahoo account and can browse tunes with no additional signups or downloads. Not that I'll buy any music there or anything.
Originally posted by melgross
Just remember that "intent" can be very difficult to prove, or disprove.
No doubt. Didn't say it was an easy law to enforce...but a law nonetheless. Doesn't much matter...it won't even be attempted with the current DOJ anyway.
Originally posted by Chris Cuilla
No doubt. Didn't say it was an easy law to enforce...but a law nonetheless. Doesn't much matter...it won't even be attempted with the current DOJ anyway.
It's up to the affected companies, or individuals to bring a complaint.
Originally posted by stustanley
so how long do you lot reckon, i think steves being a little optimisitc, im saying more like 7 - 8 months
That's really a tough one.
If it's successful, would it be longer? Hoping to snare even more.
If it's not successful would it be longer? For the same reason.
Or the opposite?
I think whatever we say, it's just a guess. It could go either way.
Originally posted by AppleInsider
Yahoo's $60 price-point is "substantially" below Yahoo's cost to run the service
You all know who owns Yahoo right? Give that Microsoft owns it, given that Microsoft can afford to go into any sector operating at a loss until it crushes the competition. Sound familiar? What in the world are those who supposedly protect the consumer from monopolist such as Microsoft doing?
Originally posted by iPeon
You all know who owns Yahoo right? Give that Microsoft owns it, given that Microsoft can afford to go into any sector operating at a loss until it crushes the competition. Sound familiar? What in the world are those who supposedly protect the consumer from monopolist such as Microsoft doing?
What are you talking about?
Microsoft owns Yahoo? Where have you been living these past few years?
Yahoo is a competitor to MS. It was founded by two young guys in college, and their names are not Gates and Ballmer.
Go here and learn something:
http://yhoo.client.shareholder.com/
Originally posted by iPeon
I could have sworn I read somewhere that Microsoft had purchased Yahoo a few years back.
Not gonna happen.
Originally posted by mactoys
This will not be a loss leading. The management at Yahoo are not dumb. They have a company that makes a lot of money and should not be taken lightly. They don?t care about Real, Walmart or Napster. They are too small and will not have a impact on the market. They are destined to fail and either way will not be around it a couple of years. You have to look at it from Yahoo?s perceptive. They are a media company who sell advertisements and Internet ad are the fastest going market in the world, eg Goog $266 a share. Their music service is just another way to sell ads. No one argues that google should charge for their search engine, they make money from guys like me that write them a check every month to be listed in their service. (and I pay a lot) The Coca Colas, Pepsi, movie studios of this world will be throwing money at Yahoo to be in front of every 12-33 year olds sitting hours on end in front of Yahoo?s music service. How many hours do you sit on itunes? $6.00, they could do it for free and still make money. I am an apple fan and love itunes but Jobs needs to wake and smell the coffee. (I bet Starbuck will want to advertise on Yahoo's music service too)
I'm not so sure that a music service, even from Yahoo, can stay in service from ads. The expense from such a service is too high. I don't believe that they can attract anywhere near enough ads to keep this afloat.
I wonder who won the bet...
CNN article