Week in review: Reading Apple's crystal ball

Tech community looks at Apple projects, while telephone companies measure outcome of FCC spectrum auction. Also: Redmond's rocky roads. (By CNET News.com's Steven Musil)

It seems lately that everyone can predict the future and knows what Apple is going to do next.

According to various sources, Apple is considering an all-you-can-eat plan in which users would receive free access to iTunes in exchange for paying a premium for its iPod and iPhone devices. If accurate, this would mark a big about-face for CEO Steve Jobs, who previously has dismissed the rental music model.

As part of the deal, Apple would have to agree to share sales revenue from the devices with the labels, a source close to the deal said. Cutting the labels in on iPod or iPhone revenue would mark a sharp turn in Apple's strategy.

The deal being discussed by the labels and Apple calls for the company to license the music and also "kick in a piece of the device sales," the source said.

The Apple device, which hasn't been determined yet, would come preprogrammed with a certain amount of music that, after a period of time--perhaps six months or a year--would roll into a subscription type of service plan, the source said.

Apple would be in for a fierce legal fight, should it ever undertake such a strategy, warns David Pakman, CEO of rival digital-music service eMusic.

"It smells like classic Sherman Antitrust Act to me," Pakman said. "I only know what I've read, but the plan sounds very similar to the tying practices Microsoft used with Windows (and) Explorer. And Microsoft is still paying the penalties for that one."

An Apple representative said the company does not comment on "rumor and speculation." The talks were first reported by the Financial Times.

The debate among CNET News.com readers on this topic was varied, with many baffled by the possible deal.

"This type of device is counter-culture to why people enjoy any music player, let alone an iPod," wrote one reader to News.com's TalkBack forum. "What is really strange, as an Apple enthusiast, I find it counter to Apple in general."

Sometimes it's more advantageous to be able to read lips rather than a crystal ball, as those following recent comments by Adobe Systems CEO Shantanu Narayen have learned. During a conference call to announce Adobe's first-quarter earnings, Narayen said Adobe "will work with Apple" to make sure that Flash applications can run on the iPhone.

"We can now start to develop the Flash player ourselves, and we think it benefits our joint customers," Narayen said. "So we want to work with Apple to bring that capability to the device."

However, apparently people read too much into that statement, and Adobe has admitted that it can't bring Flash to the iPhone just because it thinks that would be a neat idea.

Narayen's comments weren't exactly definitive, but they were judged by several media outlets to be a confirmation of Adobe and Apple's plans to put a Flash Player on the iPhone.

But Narayen also seems to have misunderstood the terms of the SDK. Flash isn't a mere third-party application, like a game or an instant-messaging client. It's a plug-in that would have to work very closely with Safari on the iPhone, and that's something Apple has declared off-limits to third-party developers at this time.

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