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Apple execs not enthusiastic about 'unattractive' online print market

While rumors have suggested Apple is courting print publications to deliver content on its anticipated tablet device, company executives recently said they see problems with the current business model.

Analyst Mike Abramsky took part in a client event this week hosted by RBC Capital Markets. He spoke with numerous Apple executives: Peter Oppenheimer, chief financial officer; Eddy Cue, vice president of iTunes and Internet Services; and David Moody, vice president of Worldwide Mac Marketing. The three gave some insight into Apple's current direction, and their thoughts on the company's current status in the market.

They reportedly said that Apple was not enthusiastic about the online book and newspaper market, which was said to have an "unattractive industry structure."

A report earlier this week said that some publishers were not enthusiastic about the Amazon Kindle, because the hardware maker reportedly wanted to keep 70 percent of revenue from content sold on the device. That same report suggested that Apple would take a different direction and employ its current App Store business model, where it keeps only 30 percent of sales.

Apple in the past has been known to mislead just before a new product arrives. The company suggested it had no interest in the complex phone business model just before it debuted the iPhone, and it also said it could not create a sub-$1,000 Mac before the $400 Mac mini was unveiled.

Recent reports have stated that Apple has been courting print publications to make their content available on its forthcoming tablet. The 10-inch, 3G connected touchscreen device is expected to debut in the first quarter of 2010.

While officials said this week that while the Apple TV is still a "hobby," they believe it is well-positioned to benefit as people migrate to the Web for their video-watching needs. The Cupertino, Calif., company indicated it is looking to do for video what it did for music.

"Video content is expected to be the next 'exploding' opportunity, but requires overcoming industry rights dysfunctionality, competing with other subsidies (cable box, video), and developing the right consumer 'offer,'" Abramsky said.

Apple on Thursday debuted the Apple TV 3.0 software update. It features a redesigned main menu that makes navigating content easier, and also allows users to view iTunes Extras and iTunes LP content on their TV.

Company officials are also reportedly unfazed by the recent launch of Windows 7. They see Microsoft's operating system upgrade as an opportunity for them to create Mac buying opportunities, for users who do not want to go through the Windows 7 upgrade process. Executives said they see plenty of opportunities for the Mac market share to grow, despite the lack of a sub-$1,000 laptop.

RBC Capital Markets has reiterated its $275 price target for AAPL stock.



50 Comments

myapplelove 15 Years · 1498 comments

Very interesting article there Neil. To actually listen to the executives themselves instead of the various commentators and speculators.

x38 15 Years · 97 comments

Apple TV will continue to be stuck in 'hobby' status until they add a DVR. Apple showed a great concept for a DVR in a patent application some time back - where is it already??

iTunes distribution of pre-recorded content may be an acceptable model for some aspects of TV viewing, but a big purpose of a DVR is to time shift live broadcasts, for which Apple currently has no good answer.

rot'napple 17 Years · 1839 comments

Quote:
Originally Posted by AppleInsider

They reportedly said that Apple was not enthusiastic about the online book and newspaper market, which was said to have an "unattractive industry structure."

While Apple may not have been the first to release a news source, e-book reader, e-zine, e-newspaper & video capable tablet / slate type device to put side by side with the Kindle or Nook, when Apple does, the industry will then have a device with "panache" for the other companies to create their "Apple Killer" product!

11thindian 17 Years · 181 comments

Quote:
Originally Posted by X38

Apple TV will continue to be stuck in 'hobby' status until they add a DVR. Apple showed a great concept for a DVR in a patent application some time back - where is it already??

iTunes distribution of pre-recorded content may be an acceptable model for some aspects of TV viewing, but a big purpose of a DVR is to time shift live broadcasts, for which Apple currently has no good answer.

While I agree that aTV doesn't serve the needs of live sports or news broadcast, I think DVR functionality is incompatible with the aTV mandate of pushing iTunes content.

In terms of purchased content I personally use aTV for movie rentals exclusively- and that's made it worthwhile for me. TV content won't be as attractive until it has either a rental price or subscription model. I'm less inclined to re-watch a TV show even more than a movie- so "purchasing" TV shows makes no sense for me. I'm sure this functionality has been held back by rights issues with cable providers.

danielsw 15 Years · 906 comments

Apple's App Store has enjoyed its relative sweet spot due in part to what seems to me to be a fair 70-30 split of proceeds.

If this type of approach is applied to a new publishing effort centered around an Apple tablet, that would yet again serve to set yet another complacent industry on its ear and result in yet another flood of new business and activity under the broadening Apple umbrella.

If the competition doesn't already see this happening, they soon will, and their desperate hands already weary from all the wringing and white knuckles, will have no rest for the foreseeable future.