Microsoft to Reorganize Entertainment and Devices

Confirming reports circulating for several days, Microsoft announced a substantial plan to reorganize its Entertainment and Devices division.    Timed to coincide with the fall departure of retiring group head Robbie Back, Microsoft CEO Steve Ballmer will take over the division starting July 1.

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Regulators Taking a Look at Apple’s Practices?

Apple is known to be a tough negotiator.  How tough, and whether some behaviors cross the line of appropriateness is a question regulators are apparently looking into.

New reports citing “people familiar” suggest the government anti-trust regulators are inquiring about whether Apple’s dealings with music labels have been inappropriate.

On Tuesday, the New York Times reported one of the questions on investigators minds is whether Apple tried to keep the record labels from giving Amazon’s rival music download store exclusive access to some new releases.

Antitrust staff from the DOJ has reportedly contacted several music labels as well as some internet music startups.

The interviews are considered “preliminary” and at this time there is no formal investigation.   Still, regulators are clearing keeping a close watch on Apple; an apparent reaction to the dominance the company has established in many of its markets.

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Apple to Shut (reinvent?) Lala

Lala Shut by AppleIn December, gas tanks of Apple watchers got a surprise dose of high octane when reports surfaced the company was buying online music service Lala. Some immediately speculated that Apple had plans to create a "cloud" friendly iTunes. Others chimed in on the possibility of Apple using Lala’s intellectual property and license relationships to offer an iTunes music subscription package.

Now, just a few months removed, rumor engines are spinning again on news Apple will shut down the public face of Lala’s services a week before the start of Apple’s World Wide Development Conference.

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iTunes Sells 25 Percent of US Music

music measureHow much weight does the iTunes music store have to throw around?  A ton according to new data released from market tracking firm NPD.

Measuring unit sale in the first half of 2009, NPD MusicWatch reports Apple’s music store now accounts for a quarter of U.S. music sales. That’s not a quarter of digital sales, it’s 25 percent of everything.

During the first half of 2009, while CD sales continued to erode, digital music sales grew to 35% of the market, up from 20 percent in 2007 and 30 percent in 2008.  According to Russ Crupnick , NPD’s vice president of entertainment industry analysis, “with digital music sales growing at 15 to 20 percent, and CDs falling by an equal proportion, digital music sales will nearly equal CD sales by the end of 2010."

iTunes’ lead in the digital market is massive. Apple owned 69 percent of the digital music market in the first half of 2009.  Amazon, in a very distant second, held 8 percent.

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Staffing Report: Palm Promotes Rubinstein to CEO, founders depart

changing seatsThere was much speculation when Jon Rubinstein joined Palm in 2007 that he’d eventually run the company if it could get back on track.  He was lured out of retirement for the challenge, had the support of the company’s investors who’d recruited him, and was loaded with fresh ideas.  Many thought it was a question of when not if.  Now they have their answer.  Wednesday, Palm announced the former Apple exec’s promotion to chairman and CEO. 

Earlier in his career, while at Apple, where he oversaw the iPod’s development, Rubinstein was part of a team of many talented executives.  At Palm, he’ll talk the helm of the entire ship.

Known as an effective manager, a team builder and an engineering whiz, Rubinstein spearheaded the rapid deployment of the iMac and the development of the iPod division as Apple’s head of hardware engineering.  Since joining Palm as executive chairman, he’s been the head Click to Read More

Shuffling Margins, iPod Shuffle Teardown Leads to New Estimates

Ask an accountant or economist to define the value of an iPod Shuffle, or what it’s worth, and you might get a few dissertations in reply.  Ask what it costs? That’s a little easier to peg.

Market research firm, iSuppli, has done a teardown of the device and estimates the diminutive MP3 player is made from a minuscule $21.77 in parts.

Business Week reports in its summary that nearly half of that comes from two Samsung parts: the controller chip and flash memory.

The price is purely hardware, and it is merely an estimate. It doesn’t include development costs or sales and marketing expenses but even so, it suggests the gross margin on the player should Click to Read More

iTunes Tiered Pricing Now Official

As announced in January, and forecast a little more than a week ago, Apple officially made the switch from 99 cent songs to tiered pricing on iTunes today.  

For the better part of six years, Apple’s had resisted record label pressure to make the shift.  Steve Jobs argued the pricing needed to be “fair” to offset the temptation of downloading a pirated song.  Raising prices too high, he said, would drive customers away.  99 cents was simple, and sufficient.

Apple backtracked and conceded in a Macworld announcement, but only after the record companies agreed to remove Digital Rights Management restrictions (DRM) from the music in the catalog, and to allow Apple to sell songs wirelessly over 3G in exchange.

Under the new arrangement, the music store is now entirely composed of DRM-Free, 256kbps songs priced at 69¢, 99¢, and $1.29.  (Upgrading previously purchased songs to the higher bit rate, and encryption free format can be done for 30¢ a track).

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