Apple announces iPhone, hints at Beatles content deal
After months of rumors and speculation, Apple finally unveiled its iPhone hybrid device during CEO Steve Jobs' keynote appearance at the Consumer Electronics Shows (SEC) in Las Vegas. The reality of the iPhone matches closely with the conjecture that anticipated the announcement: It is a quad-band GSM mobile phone, a widescreen iPod music/video player and Internet communications device all in one, complete with the function-over-form user interface hallmarks that are Apple's signature.
As expected, Cingular Wireless will serve as Apple's exclusive carrier partner, and both Apple and Cingular stores will carry the iPhone when it reaches the U.S. market in June 2007; the 4GB model will retail for $499, while the 8GB model will carry a price tag of $599.
From a content standpoint, the most compelling iPhone news is unofficial -- by spotlighting the Beatles' "Lovely Rita" during the CES iPhone demo, Jobs implicitly acknowledged that Apple finally secured digital distribution rights to the Fab Four's back catalog. No official announcement on a licensing deal was forthcoming, but music biz insiders confirm an agreement is in place.
The two entities already share a long history, most of it tempestuous: Branding conflicts have kept Jobs' Apple in legal battle with the Beatles' Apple Corps for two decades, culminating in mid-2006 when a British judge ruled that iTunes did not violate a 1991 agreement stipulating the Apple Computer could continue doing business under the Apple name as long as the technology maker steered clear of the music industry.
Interestingly, Jobs announced Tuesday that his company was officially updating its name from Apple Computer to Apple Inc., although it's unclear what if anything the change portends in regards to its relationship with Apple Corps.
In any case, the Beatles' pending iTunes arrival represents Apple Inc.'s most significant content agreement to date, in any medium. The Beatles catalog is the crown jewel of 20th century popular culture--no other music appeals to so many fans across so many successive generations, and no TV series, movie or novel can claim the band's sheer timelessness and cultural influence. With traditional album sales waning, brick-and-mortar retailers closing and download revenues rising, the end of the Beatles' iTunes holdout signifies the completion of the music industry's evolution into a business driven by digital sales.
The real questions now are what form the Beatles catalog will take once it hits iTunes, and how today's non-announcement ties to the iPhone. It's worth noting the Beatles catalog has not undergone a sonic upgrade or digital remastering since it first premiered on CD in 1987. (Insert your own "It was 20 years ago today" gag here--Jobs already made his joke by playing a cut from "Sgt. Pepper's Lonely Hearts Club Band.")
According to insider accounts, EMI Music (owner of the Beatles' masters) completed a full catalog overhaul in 2006 prior to the release of the box set "The Capitol Albums Vol. 2," although improved and/or expanded editions of the classic LPs have yet to materialize at retail. Expect iTunes to roll out these remastered versions of "Rubber Soul," "Revolver," etc. instead.
As for the iPhone connection, think back to late 2004, when Apple introduced a special edition U2 iPod preloaded with the Irish band's then-new "How to Dismantle an Atomic Bomb" as well as other catalog highlights--should the iPhone hit the market with preloaded Beatles content, particularly with remastered sound or with previously unreleased material like studio outtakes, retailers won't be able to keep the device in stock.
Source: FierceMobileContent.
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