Live: Apple iPod event, 10 a.m. Pacific by Jon Fortt @FortuneMagazine September 5, 2007, 9:43 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons PHOTO GALLERIES: NEW IPODS TAKE ON THESE RIVALS THE NEW Check out the fresh nanos NOKIA (NOK) Trying to take on the iPhone SANDISK (SNDK) shuffle’s nemesis? SONY (SNE) Return of the Walkman EVENT BEGINS Folks are still filing in to the Apple (AAPL) event, but it looks like there will be about 1,000 people when the event begins. The lights have dimmed; Steve Jobs is out on stage. He says today we get to talk about music; let’s start with iTunes. Some facts and figures: Apple has distributed more than 600 million copies of iTunes. Customers have bought and downloaded more than 3 billion songs. iTunes is the number-one online music store in every one of the 22 countries in which it now operates. Apple now has more than 6 million songs in each of those 22 iTunes stores. Apple is the number 3 music retailer in the U.S., behind Wal-Mart and Best Buy. Apple carries 550 TV shows, and has sold just shy of 100 million shows; Apple also has 125,000 podcasts, and 25,000 of those are video podcasts. Jobs says this last statistic blew his mind: 32 percent of the music releases in 2006 were released digital-only. RINGTONES Jobs says Apple is going to ship a new version of iTunes tonight, and the biggest new feature will be ringtones. These work for the iPhone exclusively. Rather than let someone else make ringtones, Apple is going to build a custom ringtone-maker into iTunes. You can make ringtones out of more than 500,000 participating songs. The comparable ringtone price from other providers is $2.49, Jobs says. (That’s about right.) Through iTunes, it will cost 99 cents in addition to the cost of the song. So, an iTunes song costs 99 cents, and you’ll pay another 99 cents to turn it into a ringtone. iTunes will show a bell icon next to songs, indicating which songs you can make into ringtones. You get to pick a section of the song, up to 30 seconds, to turn into a tone. Jobs is going to demonstrate it. He’s making a ringtone out of “Respect,” the Aretha Franklin song, and says he’s going to assign it to his wife’s calls. (Laughter ensues.) He picks out a section of the song, much like you would isolate a clip in GarageBand (Apple’s music app). Then he buys the ringtone, and it appears in his ringtone folder. Now he’s playing a few more that have already been made; he plays “Give Peace A Chance,” and says, “That’s when NBC calls.” (More laughter.) Jobs reiterates that this ringtone maker is just for songs purchased from iTunes. Does this mean it won’t work with songs you’ve purchased on CD and ripped? And I wonder if this is hackable? Now let’s talk about the iPod, Jobs says. Apple has sold more than 110 million to date. Today, he says, we are going to refresh every single product in the lineup to get ready for the holiday season. IPOD SHUFFLE Apple’s refreshing the colors; they’re a bit more muted, maybe pastel-ish. I’ll post photos later. Apple is adding a Product Red shuffle to its mix. (Do a search on Utility Belt for “Product Red” to learn more about that program.) IPOD NANO The iPod nano is the most popular music player in history, Jobs says, and Apple wants to make it better. It will now have video, a larger, brighter display, “cover flow” browsing, games, and a full-metal design (getting rid of the plastic caps). The new nano looks just like the rumor site photos said; it’s a squat version of the old nano. It’ll come in black, red, silver, blue and green. The nano has 320×240 resolution on a 2-inch screen, for the highest pixel density Apple has ever shipped. Apple has changed the user interface a bit; now there’s a split screen, so you can navigate a bit like column view in the Mac OS X Finder. Apple will also bundle three games with the new nano. He’s showing one of them, Vortex. The graphics actually look pretty good, and smooth — makes me wonder if they’ve upgraded the processors in this device. Now he’s showing Sudoku from Electronic Arts. The game has transition screens that display Japanese gardens. Now he’s demonstrating it. On to music and video. Visual content sort of floats on the righthand column of the screen when you’re browsing, giving it a very active, intuitive look. Now he’s playing a song, Mr. Brightside by The Killers. He’s also displaying album covers in coverflow view. Now he’s showing video, and The Daily Show. The PC guy from the Apple commercials is on. Jobs is now showing the Freestyle 101 hip hop podcast, which is a pretty cool choice. Now Jobs is demonstrating photos on the nano; the slideshow feature looks pretty similar to the ones Apple has had on iPods for a while; fade in and out transitions, wipes, etc. Apple’s claiming 24 hours of audio and 5 hours of video playback with the new nano. Storage: 4-gigabyte and 8GB. 4GB at $149, 8GB at $199. (Twice the memory of the previous version at the same price; they ship today.) They should be in many stores by this weekend, Jobs says. The new nano will also work with the Nike + iPod sport kit for runners. There are more than 1 million runners using the Nike + iPod kit, and they’ve logged more than 12 million miles, Jobs says. He shows a commercial for the nano, which has the tagline, “Now, a little video for everyone.” It’s a woman singing on the screen, with dancers in the background. IPOD CLASSIC Jobs says it’s time to give the standard iPod a name; it’s called the iPod classic. Full metal design, thinner than its predecessor. It starts at 80GB of storage. Audio is 30 hours, video is 5 hours on the 80GB version. There will also be a slightly thicker version at 160GB. “This boggles the mind,” Jobs says. He points out that the original iPod put 1,000 songs in your pocket, and this one puts 40,000 in your pocket; 40 hours of audio playback, 7 hours of video. 80GB for $249, 160GB for $349. Now he’s going back over the iPod lineup. Gotta be time for One More Thing. He’s walking across the stage to get a swig of water. “But we’re not done yet. Far from it,” he says. “When we introduced the iPhone in January, we said it was the best iPod ever. And customers agree with us.” IPOD TOUCH Apple is bringing out an iPod that looks like an iPhone: iPod touch. Jobs is holding one. it’s thinner than an iPhone — 8 millimeters thin. “It’s one of the seven wonders of the world,” Jobs says. It features the multitouch interface from the iPhone. “If you’ve used an iPhone, you’ll feel very much at home.” He’s describing it; it works pretty much like the iPhone. “All on this 8mm thin device.” It has a 3.5 inch widescreen display, just as we’d expect. “Just like the iPhone, this is the best way to share photos on a portable device, ever,” Jobs says. He’s still going through the features we know from the iPhone. Now he’s demonstrating it. (This clearly uses flash memory and not a hard drive, though Jobs hasn’t said so yet; the iPod touch couldn’t get this thin using a hard drive. It also seems to have WiFi built in; there’s a WiFi antenna displaying on the screen.) Now he’s displaying video. (It will be interesting to see whether the iPod touch can be used to make calls, since it apparently has WiFi. If Apple allows companies like eBay/Skype to develop for it, things could get interesting.) “But there’s more,” Jobs says. “We’ve built in WiFi,” Jobs says. What’s the problem with adding WiFi, Jobs says. Passwords, for one. Hotels and other places throw up web pages for you to log in. Starbucks gives you a web page. Even Stanford University gives you a web page. So Apple’s putting Safari in the iPod touch. (The key thing here is that Apple has announced the first iPod that runs OS X and has a web browsing experience.) Jobs says Safari is “The best web browser on any mobile device.” I think that’s different from the way he described it last time, interestingly enough. (I’m starting the get curious about how Apple will price this.) Apple is also building the YouTube app into the iPod touch. “Millions of free videos streaming over WiFi to your iPod touch.” Jobs is demonstrating the browser on the iPod touch, which looks exactly the same as the browser operation in the iPhone. Jobs is now demoing the Facebook app on the iPod touch. Now he’s showing YouTube, and a video of people riding bikes off of a ramp and into water. “We’ve put WiFi in, and we’ve made it usable,” Jobs says. “It’s a worldwide product. This is the first touch product that Apple’s going to ship around the world.” 22 hours audio playback, 5 hours video playback. “There’s something cool to do with WiFi now, so let’s go ahead and build it in,” he says. Two configurations: 8GB for $299, and 16 GB for $399. He says Apple is shipping them this month. He’s showing the commercial now. It’s interesting how much this looks like an iPhone commercial, and makes me wonder whether this will eat into the feeling of exclusivity around the iPhone. “But there is one more thing,” Jobs says. ITUNES WIFI MUSIC STORE You might have noticed that there’s an empty spot on the dock of the iPod touch. It’s for the iTunes WiFi Music Store. “Finally, some of you are saying.” In the WiFi music store you can look at the top songs in all of iTunes or any genre. You can preview, and tap to download. When it downloads you can listen to it on the iPod touch, and the next time you sync with your computer it syncs up to iTunes. You can search for anything in the iTunes store, same price, same selection. “Buy songs, buy whole albums if you like.” Now he’s going to demo it. He’s looking at the “What’s Hot” menu, and previewing John Lennon’s “Imagine.” The interface displays the stars, the number of reviews, and the price of the songs associated with Imagine. The album art is there too, which is pretty nice. (This changes the paradigm for mobile music purchasing, and will put a lot of pressure on the mobile carriers and Nokia.) He’s demonstrating search. The search is live; he types a few letters and it displays results as he types. He touches “buy,” and a cool animation shows that the song is going into the download queue. Now he’s showing that all the songs he purchased are in the iPod touch. “So. Not so bad, for the new iTunes WiFi Music Store,” Jobs says. It will be available internationally in every one of the 22 countries that iTunes operates in, Jobs says. “And we’re going to do something else, too. We’re going to bring it to the iPhone.” It will come to the iPhone via a free software update. “We’re really, really excited about the iTunes WiFi Music Store.” STARBUCKS There’s even one more incredible part of this, Jobs says. A partnership with Starbucks. in the new iTunes WiFi Store, when you get near a Starbucks, a button shows up on your device. If you hear a cool song in the Starbucks, you can buy it with a tap of your finger. If you miss the song while it’s playing, you can see the last 10 songs that played in that Starbucks. On the iPod touch, the screen shows that it’s a Starbucks song that’s playing. You can buy it just as if you were buying from the iTunes store. Howard Schultz, founder and chairman of Starbucks, is out on stage. He says Starbucks has 14,000 stores worldwide, 50 million customers per week; most loyal customers visit 18 times per month. The company’s opening seven new stores every day. He says Starbucks has gotten pretty serious about the music business, and says “This is going to be transformational.” He says there will be free access to iTunes WiFi Music while at Starbucks (no login required), and he says he believes this will drive incremental traffic into stores. “This is exclusive with iTunes,” Schultz says. He’s talking about the rollout. October 2, Starbucks will do Seattle and New York, 600 stores. In November, San Francisco with 350 stores. Then they’ll start up in February 2008 with Los Angeles and Chicago in March. That will be 25 percent of the WiFi-enabled Starbucks stores (in the U.S. I assume), and then they will expand to the whole U.S. Schultz leaves the stage. “We know a lot of people are going to be very happy with this combination of coffee and iTunes,” Jobs says. IPHONE PRICE CUT Now Jobs is taking another look at Apple’s lineup: the shuffle, the nano, the classic, the touch. “We think this is going to set a lot of people’s world’s on fire,” Jobs says. “And I’m going to include the iPhone” in the lineup, he says, because Apple has called it the best iPod ever. “We want to get even more aggressive than this,” Jobs says. iPhones are more satisfied with iPhones than anything they’ve ever done, he says. So Apple wants to make the iPhone more affordable. Apple is on track to ship the 1 millionth iPhone by the end of the month. So Apple is getting rid of the 4GB model, and dropping the 8GB model at $399. (This has got to be painful for anyone who has bought an iPhone already.) Jobs calls it the best iPod lineup ever, and says Apple is ready. Jobs has all the Apple people who worked on the products stand up so they can get a round of applause. KT TUNSTALL “One of the traditions we have at our music events is … to have a musician come and perform for us,” Jobs says. This time it’s KT Tunstall. (Interestingly, practically no one is leaving during this performance. At some previous music-related Apple events, some people cleared out before the artist was finished.) Tunstall says she’s glad to be here, and makes a telling comment about Apple’s impact on the music business: “Steve Jobs is actually making it more fun to pay for it than steal it, which is great.” “Thank you for all for coming very much, and we’ll see you soon,” Jobs says. The lights come on, and the event has ended.