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WinInfo Daily UPDATE, September 8, 2005

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In the News

- Apple Announces iPod nano, iTunes 5, iPod-Like Phone
- Microsoft v. Google Ruling Expected Tuesday

==== In the News ====

by Paul Thurrott, [email protected]

Apple Announces iPod nano, iTunes 5, iPod-Like Phone

At one of the most eagerly anticipated digital media events since the unveiling of the original iPod in 2001, Apple Computer unleashed a slew of products, including new versions of Windows-compatible software that provide sweeping new functionality on the world's most popular computing platform. Apple announced a new iPod nano that will replace the popular iPod mini line, a Motorola cell phone that features iPod-like functionality, and new versions of its iTunes and QuickTime software, the former of which includes interesting new Windows-specific features. In addition, Apple revealed exclusive deals with pop star Madonna and the author of the "Harry Potter" books to bring content from those sources to iTunes and iPod users.
The Motorola ROKR cell phone was, perhaps, the most widely heralded product to come out of this event because it was preannounced in July 2004, more than a year ago. However, the actual implementation of the phone leaves a lot to be desired. Far from being the "iPod phone" that so many iPod fans had hoped for, the ROKR is, instead, even more limited, music-wise, than Apple's low-end iPod shuffle devices. Regardless of the size of the memory card that's installed in the ROKR, the device can hold only 100 songs. And to transfer songs from a PC or Macintosh to the device, you need to use a pokey USB 1.1 cable (no USB 2.0 functionality is available), and you can't wirelessly download songs to the phone, as expected. Further problematic, the ROKR is available only in the United States--on Cingular's service.
Saved as the final announcement in yesterday's event, the iPod nano looks solid, although it isn't a true superset of the iPod mini it replaces. On the plus side, the iPod nano features an incredibly small form factor; is available in classic iPod white or in black; is smaller than the iPod mini it replaces; features a color screen; and includes unique new features, such as a screen lock, a stopwatch, and some games. However, where Apple giveth, it also taketh away: The iPod nano features much less battery life than its predecessor, is available in fewer colors, and, most glaringly, offers less storage capacity than the iPod mini. At $199, the low-end version offers just 2GB of space (compared with 4GB on the low-end iPod mini), whereas the $249 model offers 4GB of space (compared with 6GB on the high-end iPod mini).
Apple also introduced iTunes 5, which features a streamlined new UI, Smart Shuffle functionality that seeks to fix the previously broken shuffle feature, Microsoft Office Outlook and Outlook Express Contacts synchronization with iPods, Outlook and iPod Calendar synchronization, parental controls, Motorola ROKR compatibility, and other new features. Apple also took QuickTime 7 for Windows out of beta (the Mac version shipped in May), making version 7.0.2 the first nonbeta version of the product available. QuickTime 7's biggest new feature is H.264 video compatibility.
Apple also announced some exclusive deals for its iTunes Music Store, which sells more than 2 million songs. After months of negotiations, Apple sewed up the exclusive rights to pop star Madonna's entire catalog--letting customers download individuals Madonna songs for the first time--and signed an exclusive deal with author JK Rowling for the "Harry Potter" series, which will be offered in audio book form via the iTunes Music Store. Apple will offer all six books in the series via individual audio books and in a complete boxed set, the latter of which is the equivalent of 100 CDs worth of audio information. Apple will also offer a special edition iPod that comes with a "Harry Potter" theme engraved on its back.
Although yesterday's event didn't include some products and services that analysts expected, including larger-capacity iPod shuffles (which were clearly negated by the new iPod nano devices) and the ever-rumored iPod video, the company is clearly well set for the holiday 2005 selling season. The iPod already dominates the personal digital audio player market, and iTunes dominates the online music service market. Apple revealed that more than 1000 accessories are now available for the iPod, giving it the ecosystem and momentum that Windows enjoys in the PC space. If that weren't enough, several automobile makers--Acura, Audi, Honda, Volkswagen, and 10 others--will provide seamless iPod integration into their cars for the 2006 model year. In 2006, more than 5 million cars will ship with iPod support in the United States, Apple says. For a company that suddenly makes almost half its revenue from the iPod, these announcements are going to translate into a holiday bonanza.

Microsoft v. Google Ruling Expected Tuesday

After listening to arguments from Microsoft and Google lawyers for the past 2 days, Judge Steven Gonzalez of the Superior Court of the State of Washington will issue a ruling Tuesday that will decide whether a former Microsoft researcher can begin working immediately for Google. Kai-Fu Lee, the now-infamous ex-Microsoftie, left the software giant earlier this year to help start Google's China-based research labs. But Microsoft sued Google to prevent the defection, arguing that Lee's employment contract forbid him from joining a direct Microsoft competitor for 1 year after he left the company.
In July, Microsoft won a temporary motion that prevented Lee from starting at Google. This week's hearings were scheduled to determine whether that motion would remain in place until the case can go to trial in January 2006.
Microsoft's argument is simple: Lee has intimate knowledge of Microsoft's China strategies, which precludes him from performing similar work for Google--clearly a direct Microsoft competitor. "We presented significant evidence \[at the hearings\] detailing the knowledge that Dr. Lee has of our China strategy, and more importantly, we presented significant evidence that he shared that knowledge with Google," a Microsoft spokesperson said.
Google argued that Lee's role at Microsoft wasn't the same as the one they intend for him. "He didn't run China. Other people did," a Google lawyer told Judge Gonzalez. "Microsoft has exaggerated who Dr. Lee is. They have exaggerated what he has done. They have exaggerated what he plans to do at Google."
We'll know next week. Court observers note that it's difficult to guess which way the Judge will rule, as he rarely spoke in court during the hearings.

==== Events and Resources ====

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