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Discussion Starter · #1 ·
I just finished reading the latest article in Fortune about Apple's new online record store and a few thoughts occurred to me:

- the earlier rumours about Apple buying Universal/Vivendi underestimated Apple's ambition (and they really were silly rumours, really). If this thing works, Apple will be poised to be the new middleman seller *and* distributor of most pop music in North America. Universal will be but a percentage of their annual returns. Who needs to buy a record company? Heck, Apple was just given a 33% share in all _five_ of the big one.

- I wouldn't be surprised if we soon start hearing stories about well-known bands who, nearing the end of a contract with a record label, try negotiating deals directly with Apple. While there are a lot of mitigating factors that might stop this from happening--like, say, the record labels who are sharing their catalogue with Apple--you never know how this could turn out.

- I'm counting the days until John Dvorak writes another ill-considered column in which he predicts that Apple's latest move will no doubt help accelerate its demise (see his columns, sic passim ad nauseum, in PC Magazine for earlier "predictions").
 

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When I heard the rumour that Apple was in talks to buy Universal I was skeptical, very very skeptical. And then Apple asid "We aren;t planning on buying Universal" (breaking one of their own ruels by responding to a rumour) and it got me thinking that they hadn't said they weren't in talks with Universal.

For me, this confirmed the Music Service rumour.

I don;t know how Apple would do in the rcord business, probably they would be sued by Apple Music with whom I believe thy still have an agreement to not do anything to do with music (which I believe to be the reason that emagic is still a subsidiary instead of an absorbed company like Grail or Nothing Real, so Logic is still Emagic Logic and not Apple Logic, regardless of how much play it gets on their website).

It will be interesting to see what knid of revenue this whole thing does for them though.

--PB
 

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does this foray by apple computer inc. make it a much more palatable takeover target for the "borg"?? [aka bill gates]

the M$ bear is hungry....
 

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The new Apple record label could be called MARC for Macintosh Apple Recording Company. I don't mind sharing my name for the "good of the cause" (at least not on MayDay!).

I wonder if Jobs, et al, would implement a "poison pill" situation to prevent a Microsoft takeover of Apple?
 

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To take Apple over, you'd have to buy a lotta shares (about 175 million for controlling interest; a true takeover requires you buy the other 175 million once you wrest control of the Board, but you could pay for that with Apple's own cash once you are calling the shots).

And most of the Apple board would keep a pretty tight grip on the ones they own/control/can option. Larry Ellison's company has more than a couple spare $billion laying around as well, and I don't see him standing idly by (he absolutely hates Bad Bill).

But the biggest drawback is the legal doo-doo Microsoft would find itself in if it bought a competitive OS software company. Let's not forget that purchasing a hardware firm (Apple is kind of both) would further hurt any protestations of innocence.

Apple may be an attractive target (or not) but I don't think it's too far a leap to see any attempt to control Apple by MS would lead directly to the breakup of the company through remedies against monopoly practice in the US. Kind of like winning the battle but losing the war.

If an attempt was to happen, you would hear it leaked first from the US Justice Department or the Department of Commerce; Microsoft would have to run it by them before any takeover could be attempted in the first place. Not exactly conductive to stealth or a good bargain on the share price.
 

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Discussion Starter · #6 ·
Here's a postscript: according to this story on MacMinute.com, Apple estimates it sold 275,000 tracks in its first 18 hours. At 99 cents a track, after giving 2/3 to the record companies, it's a modest sum for 18 hours' work.

It'll be interesting to see what these numbers look like in a few months after the novelty has worn off, but so far, this venture looks like it could be a nice litte cash cow for Apple et al.
 

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Kosh, I saw the same article. However, what would be Apple's profit on each of these .99 sales?
 

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The gross profit would appear to be 32-and-some-fraction-of-a-cent per song. After you pay for everything else, you end up with a net profit. Should be a highly scrutinized number in Apple's next Quarterly Earnings report.
 

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gordguide, it's the net profit that will the most telling statistic. Still, if this is an investment in showing the world that Apple is STILL a major company for innovation in the digital lifestyle, they might still pull off a Sony-like rebirth. We shall see.
 
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