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Tuesday, April 24, 2007, 04:00 pm PT (07:00 pm ET)

In short: SEC exonerates Apple, QuickTime hack, iQuiz, more

US officials have signaled the all-clear for Apple in its long-standing options trouble; meanwhile, a Mac hacking contest has unearthed a potentially volatile QuickTime flaw, and Apple has released its least expensive iPod game to date.

SEC drops options charges as goodwill gesture

While former Apple CFO Fred Anderson earlier today went to great expense to avoid facing US government charges, his previous employer won't be forced into the same dilemma, the Securities and Exchange Commission said Tuesday afternoon.

The SEC has issued an official statement that effectively wipes the slate clean for Apple and its problematic stock option grants, saying that the company's eagerness to make amends left little reason to consider punishment.

"Apple's cooperation consisted of, among other things, prompt self-reporting, an independent internal investigation, the sharing of the results of that investigation with the government, and the implementation of new controls designed to prevent the recurrence of fraudulent conduct," the release said.

The only outstanding issue appears to be Apple's prior legal counsel Nancy Heinen, who still faces charges from the US federal agency.

MacBook hacking contest exposes QuickTime hole

Despite the relief in its finances, however, Apple this week was given grief by a serious breach of its QuickTime media player's security.

A hacking contest late last week at the Vancouver, Canada-based CanSecWest Expo dented the Mac maker's comparatively clean record on zero-day exploits when two experts from Matasano Security successfully breached the OS and gave themselves user-level access to the fully patched Apple operating system.

Achieving the feat earned the first expert, Shane Macaulay, the very MacBook Pro he had defeated while his mentor, Dino Dai Zovi, secured $10,000 as part of a separate prize.

The exploit functions courtesy of a previously unknown flaw in the way QuickTime handles Java code, Matasano says. Malicious code sent through the web plugin for the Apple software can reportedly expose any system to potential attacks — regardless of whether they run Mac OS X or Windows using any web browser, the security firm notes.

Until Apple develops a more permanent fix, users can close off the hole altogether by disabling Java. No instances of the attack method have yet to be found outside of the contest.

Apple posts iQuiz game in iTunes

Wasting little time in validating an earlier leak, Apple on Tuesday posted a new game for fifth-generation iPods in the iTunes Store.

Though basically a graphically enhanced version of the built-in Music Quiz with trivia sharing features, iQuiz is notable as one of the first games to break Apple's previously unshakable $5 price point for games, available through both the American and Canadian stores for just 99 cents.

The game is also available in France, the source of the leak, as well as the other countries which currently host iTunes online stores.

Study: online music soars, world overtaking US

Online music downloads should at last be reaching the turning point where they benefit music labels, according to new Strategy Analytics research obtained by AppleInsider.

The analyst group expects worldwide direct-download music revenues to blossom by 62 percent in 2007 to $2.7 billion, finally restoring the profit-making that has been lost in the decline of CDs. That number is set to more than double by 2011 and could reach $6.6 billion, according to estimates. A steadily increasing portion of that figure is likely to stem from sources outside the US and should ultimately eclipse Americans in those same four years.

Significantly, Apple's price jump to $1.29 for DRM-free singles isn't seen as a catalyst and could in fact be replaced with a far more consistent business model.

"The recent move by EMI and Apple to drop DRM from premium tracks will produce a temperate increase in single track download revenues in the short to mediums [sic] term," said Strategy Analytics' Martin Olausson. "However, long term revenue growth will come from hybrid subscription based services."