"Apple's next big thing is Steve Jobs"
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Apple's next big thing is Steve Jobs
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>> Hello, and welcome to the Reporters' Roundtable, CNET's weekly deep dive into the main text story of the week. I'm Rafe Needleman from CNET News. And this is, our first episode in the new live format. We will be discussing Apple's CEO, Steve Jobs, announcements in San Francisco on Tuesday, 9/9/09. Our guests today to talk about this are reporter, Erica Ogg, from CNET News. Erica is our Apple reporter, and was at the Stevenote. Say hi. >> Hello. >> CNET writer, Greg Sandoval, from CNET News. Greg covers the music industry in-depth, and he was also at the event. >> I was. >> And Donald Bell, Senior Editor Donald Bell from CNET Reviews. Donald reviews music players. Were you also there? >> I was the only person not at the Stevenote. >> Sorry. >> Yeah, I know. Actually, I was kind of happy. >> I was going to say, I saw your twitter. >> Yeah, I know, I was pleased not to have to go and deal with the crowds. Welcome, everybody, thank you for coming to Roundtable Number One. So let's start up with a recap. On September 9th, Steve Jobs returned to the public eye in his first major launch now since his medical leave and subsequent liver transplant. At this event, he announced a new line of iPods, some with video cameras, a new version of iTunes with social and sharing features, and an update to the iPhone operating system and new digital formats for music and videos. That's a lot of stuff to get through. >> Yep. >> Let's start with the big product announcement, which was Steve Jobs. >> Yes. >> How did he do? >> I think he clearly met everybody's expectations of a Steve Jobs keynote. I mean, the fact that he was there, first of all, I think caught some people off guard. It wasn't really clear, you know, whether he was going to be there or not. But, you know, when he walked out on stage, it was like instant standing ovation for a good, I don't know, two or three minutes. And he was very appreciative, you could tell. And yeah, I mean, he had the same outfit, and he was notably thin. But, I mean, the man just came back from surgery. And he did the one more thing. I think he was doing his normal Steve thing. >> Yeah, it's funny, coming into the event, that was the question I was getting the most, is do you think Steve Jobs will be there, you know? And you never know. There's no tip-off that it will be a Steve Jobs things. I was actually predicting he would be there because of the Beatles catalog being released. I was wrong about the Beatles catalog coming to iTunes. >> Batting 500, not so bad. >> Obviously I got the Steve thing. >> Greg, what did you think? How did he look up there? >> I think there was a shock of surprise and electricity to see him there. And I think there was a lot of emotional--very quiet when he thanked the person who was killed in the car accident. And he made his appeal for people to donate organs. I think it had everything people wanted and expected. He didn't look--he was thin, but everybody expected that. And I think they were gratified to see him up and smiling and laughing and doing what he usually does. >> I can't think of any other tech company which has such an iconic CEO. >> Yeah. >> He is Apple. I mean, could there be an Apple, you know, without this presence there? >> Yes. I mean, obviously he's not going to be around forever. I mean, none of us are going to be around forever. I don't mean that to be morbid. But the company will go on and the company did very well in his absence. Tim Cook was running it. And he acknowledged that. He said they ran the company very ably while he was gone. And he was very appreciative of that. And I think that while Steve's presence is really reassuring to stockholders and to Wall Street, clearly, even when he's not there, they go on, and they are quite successful. >> Yeah. And Erica and I were actually talking about this before the show a little bit, too, about how it is--no other product event, aside from Apple events, do you get reporters standing out of their chairs and applauding, you know, the figurehead of a company or the president of a company or a product release. But people really kind of lose their stuff at Apple events. >> That's true. That's why I didn't want to go, I think, being swept up in it. >> Yeah, but there is something. I was kind of justifying to Erica that I, you know, before the show, if Steve Jobs does come up on stage, I'm going to applaud, because just as--I think unlike other industries where the tech writers come to an industry because they're kind of nerds. I mean, and there's something about Steve Jobs that it's just, he's a nerd hero, you know? He's a geek that is like the uber-geek of all geeks who delivers, you know, pretty amazing products to the world. And it's hard to not get caught up in that, the comeback of him coming back to the stage. And that's why I don't think that if we do, you know, Steve Jobs is not there, that you're going to have the same company. I don't think there's any question with his charisma and his vision. The man is, at the very least, the greatest marketer of all time. So to say that Apple's going to go on and be the exact same company, I just, I don't see it. >> I don't think it's going to be the exact same company, but they will go on. >> Yes, I agree with that. To how successful they'll be without him, they could be just as successful, but I don't think it's going to be in the same way. That's my point. >> Let me ask this in a different way. Absent Steve Jobs being at this keynote, was this an important event from the product side and the other announcement side for Apple? >> No. >> No? >> I don't think so. >> So it's just basically Steve is here, here's a couple of products? >> I think Steve stole the headlines for, you know, a couple of reasons. I mean, the comeback, yes, but also just because the rest of it was kind of a yawn, you know? Especially from someone who is reviewing the products right now, they're still great products, but it's not--and maybe it's the punishment of a company that kind of has had a really good streak for a while now, innovating and coming up with exciting new stuff. >> They're competing against themselves. >> Yeah, they are kind of competing against themselves now more than ever, especially if they keep lowering pricing on things like the iPhone. And now even with the price margins between iPods now, you've got like a $179 iPod Nano up against a $199 iPod Touch. I don't know, it's housekeeping, I think as Greg had pointed out earlier, for the product refreshes. But it's not terribly exciting. >> So let's get into the products a little bit here. The one that was most interesting to me, on the hardware side, we'll get into the software and the content in a minute, was the Flip with video. All right, sorry, I can't believe I said that. The Nano with video taking on the Flip. And I think, you know, Jobs even mentioned that during the keynote, that, you know, they talked about the Flip, and they did a comparison of it. Why are they taking on the Flip? I mean, why even mention it? >> Yeah, I mean, it's curious. But I think it's, from my perspective, it's because they can, because they feel like they have this product, the iPod, that in popular culture, the popular consciousness, people already expect that everyone is going to have this thing in their home, and why not put a video camera on there too? And a lot of the talks I was having with people behind the scenes, they kept talking about teenagers, the teenage market, and how teenagers are crazy with video content, uploading it to YouTube and sharing with friends. I don't know if they're right about that. I can't speak to teenagers. But they did seem like it was an obvious thing, to move a video camera onto the Nano. >> And I don't think it's just teenagers too. I mean, the reason that the Flip did really well is because they marketed to parents, who just want to get short video clips of their kids doing cute things. And I think that, I mean, obviously Flip is the leader in that category. And so he is trying to reach that same audience. So I think that was why he made that comparison there. >> Do you think this will impact Flip sales? >> As a parent, no, I don't think so. Like right now, I have the Flip HD because I want, you know, I want my kids' videos to be in HD quality so that they're a little bit more future proof. But no, I think you're going to see a lot of, you know, maybe some scandalous drunken frat boy videos come out of this thing. But I don't think you're going to get a lot of parents. >> Just what the world needs. >> Yeah, yeah. >> So this is the college product. The Flip is the young parent product. >> Yeah, I think so, at least now. >> Well, in the same way that point and shoot cameras didn't really go away when they put a camera in a phone, I don't think that a stand-alone little video camera is going to go away just because they put a video camera in the iPod. I mean, it depends on what you're looking for. If you already have an iPod and you just want a video camera, then yeah, you're going to go out and you're going to find something that does video. But if you're in the market for both, maybe you think, oh, hey, I'll go, you know, just get the thing that does everything. >> I guess the Flip now has to start adding an FM player, music. >> A touchscreen. >> Because I still think that's what makes the Flip so great is that it is such a specific single purpose product. >> It is very Apple-like, isn't it? Although in a way, because it only does one thing, or maybe it's old Apple. I don't know if it's new Apple. New Apple lets us do everything. >> But it's Apple like in the sense that they made everything very easy. And to me, that's the attraction of the Flip, that you just have the video, you take it, you plug it into your computer, and boom, it's on YouTube. They take all the complication, and they kind of hide things from the user that they don't need to see. >> Now, the Touch, the iPod Touch, we had heard going in that it was going to get a camera. And certainly, you know, there are some shots of tooling with a little coal for the camera. And then in the last minute, apparently no camera, and this story where Jobs is talking to the Times reporter saying, well, you know, the Touch is really just a machine for fun and games, and it's not really--and we have to keep the price down, yada yada. >> Total BS. I mean, I don't think there's any way that that's true. Maybe on that $199 price point version, you know, to keep prices down, it makes sense. That's the entryway for people to get into the Touch and get addicted to apps and things like that. But no, there's no way that every portable product that Apple makes now has a camera on it except for their premium portable media player. It doesn't make sense. The laptops, their phones, the Nano. Maybe not the Shuffle, you know, but everything else-- >> That would be cool because you can't see what you're doing on the Shuffle, you know, random picture taking. So the Touch, no camera. The story now is that because they had QC, quality control, issues with the part. But they've got a camera in the iPhone and a camera in the Nano. I guess a different part is what they were talking about? >> The camera Nano being a different one than the one in the iPhone. It's a smaller sensor. It's a different deal. >> So you think we'll see a camera in the Touch soon? >> I do, but I'd also think like they can't come out with that too soon or else they look foolish. And also, they'd P-off a lot of people who might have bought the Touch, and then two months later, like, oh, here's the Touch we meant to give you back in September with the camera on it. Sorry. >> How important is the addition of FM radio, something that people have been asking for for a long time in iPods? They finally brought it. Which product did they bring it to? >> Nano. >> The Nano? >> Yeah. >> Just the Nano? >> Just the Nano. >> So it's not on the iPhone, it's not on the Touch? >> No, just the Nano. >> The Nano's the product to get, isn't it? This little teeny-tiny thing. >> The Nano was this year's one more thing, which was really surprising. Like really, the Nano announcement is going to be-- >> Yeah, I saw that, and I was like, what? You're kidding, right? That one more thing, that's minor. >> No, it was a surprise. But all the attention, all the investment seems to be in the Nano. I mean, I do think that they're still really banking on the iPod Touch being a gaming platform. And they seem to have a lot of numbers to back that up, as far as people's enthusiasm for being a gaming platform. But from my perspective, I'm still looking at it as this portable mini-player device with apps and all that and not so much the gaming thing. >> So let's wrap up the hardware section of this show with a simple question. Do you think that Apple right now, in the portable music player business, has the right or the best line-up of players? Because they've got everything $49 up to, you know, a $600 iPhone. >> I think they still have a strong line-up. I still think if someone was going to ask me today, what MP3 player should I buy or what portable media player, I'd still say, you know, go out and get an iPod. You really can't go wrong with that. They've probably earned an ability to kind of rest on their innovations from last year and just kind of, you know, coast through this season and still have a really strong line-up. But they could have done more. I think they could have done more, yeah. >> Yeah, like what? >> Like maybe an HD video camera on the Touch. That would have been really cool. And also, just kind of--I mean, Apple knows this. It's good to refresh the design a little bit to keep people interested. And really we're looking, if you're looking at the products, they're exactly the same products. There's a little bit of a larger screen on the Nano now, a different kind of sheen to it. But it's really hard to tell this year's products from last year's. >> So the big deal, one of the big deals that Apple has done is they've become not just a hardware company, not just a computer company, but a real force in the content industry--so far, that's music and videos. And they had a couple of announcements at the show about extended formats. It looks like they're trying to bring back the idea of the album, is that right? >> Yes. >> So how are they doing this? And can it work? >> Well, it looks, to me, like this iTunes LP is a step in the direction of trying to appease or at least help the record industry bundle music and sell greater numbers of songs. An executive with Universal Music Group said it at a conference I was at earlier in the year, that they cannot make a business out of selling individual songs, 99 cent songs. >> The music industry can't? >> That's right. >> Even though Apple is doing fine. >> Apple makes a little bit of margin on that. Remember, it's all about the hardware. But the music industry wants to be able to raise margins on their song sales. And that means bundling. At least that's what it looks like at this point. They've got to bundle their songs. What Apple didn't tell us about this LP is how many songs are we going to get? What constitutes or what is an LP? Is it six songs, is it ten songs, is it like the CD, twelve, fourteen songs? So we don't know some of that yet. What the actual LP is, though, isn't really, to me, doesn't seem like it's going to move the ball that much. You get some art, you get liner notes. It's much of what we saw back in analog days, right? >> Well, you pay $12 for three tracks you like and nine that you don't care about. >> That was the old day. And if they do that, they're going to, I mean, it's going to die. >> That's what the whole digital revolution has been about, not forcing songs down our throat. >> Right, and it looks like they're right now targeting classic albums, our big-name albums, you know, the albums that you would want to get in their complete format anyway, which is going to be, you know, what do they have? They have some Bob Dylan up there. >> The Doors. >> The Doors, and things like that. And I think it makes sense for those kind of albums where it's a collectors thing anyway. >> It's for the uber-fan. >> Yeah, but that's a niche market. >> Yeah, and how important can that be to the record industry? >> Well, I mean, I guess to me it looks like they want to start getting people used to buying music in bulk again. And where else to start, better to start than Apple, at iTunes? >> It's also, the cynic in me thinks that it's a nice little anti-piracy measure too. Like if you're a fan of a certain band or a certain artist or whatever, to go out and to, like right now, like the big [inaudible] forces like the Beatles album, right? But if you're going to do it right, you're going to get the, you know, the full iTunes LP that has the extras and all the added bits that you can't just kind of pull off of any kind of, you know-- >> So when you buy an album, or what are they calling it, LP? >> ITunes LP. >> ITunes LP. For limited play, they really mean it. You won't be able to extract individual songs from it? >> You can. The tracks are still--the track information is still just the iTunes plus [inaudible]. And you can transfer the tracks to any of their portable devices. But you can't get that whole immersive LP like kind of flash animated experience onto any other portable devices. >> OK. Now, they also announced the video extra concept, which strikes me as kind of philosophically very similar. It's like when you get a DVD, you have the show, and then you have the extras. So the same idea, are they doing this--is this for the consumers? Or are they trying to appease the movie industry? >> I think, from my perspective, it's consumer. >> It's more consumer than LP? >> Yeah, this is like, between getting the video on Netflix and being able to have the DVD with the extras and being able to just press a button and download all of that same stuff through iTunes, it's a little bit more of an incentive for me to use iTunes instead. >> Consumers like that stuff. They like the extras at the end of the DVDs. >> And another music business that Apple is getting into now is ringtones, finally. >> Yes. >> So how does that play? How does that work out for them? >> Again, it's incremental gains, if any. It's come out. You don't need to buy a ringtone, a separate ringtone. People used to pay $3 or $4 for a ringtone. Now you can cut your own ringtone. Buy a regular song, an MP3, and create your own ringtone. So I think this is, again, as we speculated, nobody has confirmed this, but it looks like these are one of the things, one of the offerings that the music industry say, hey, Apple, let's do this, finding precut ringtones. >> Yeah, and that's a weird distinction too, like the precut ringtones versus the previous ability to buy certain songs and cut exactly the part that you want. It is interesting to think, just consumer-wise, that there's more appeal for like look, I don't want to cut my own ringtone. Just give me the first few bars of Boom Boom Pow and call it a day. >> And I think a lot of people will do that. I mean, it's just easy. They're going to sell them just like they sell the songs. And so people will just, you know, push the button and buy the ringtone. >> So we can't talk about music content and Apple without talking about the one thing that was not at the show, which was-- >> The thing I predicted to everyone would be at the show, the Beatles. >> So what happened? I mean, why can I still not go to iTunes and get Revolver in iTunes? >> It's coming. I'm telling you right now. Yoko says this. They don't have a deal yet, but it's coming. Every side, I mean, there's a lot of different sides here. You have EMI, you have Sony, ATV, which is Michael Jackson and Sony's Music Publishing. And you have the Beatles Apple Corps. And all sides want this to happen. It's just they haven't come to terms yet. But they're closer now than they've ever been. >> See, I don't get this. I don't understand what's going on here. Because they put freaking creepy avatars of all the Beatles in Rock Band, and they can't even get the original tracks into iTunes? >> Yeah, that was the logic I was taking, like all of those licensing hurdles for Rock Band, for the new CDs and all that, I would have thought that somehow it would have gotten ironed out. >> I mean, the Apple versus Apple lawsuit was settled ages ago, right? >> Yeah, it's been pointed out. I mean, you can get this music now free, right, if you're willing to steal it and get it. They know about all this. They know that it's on--these avatars are out there and this stuff is out there. They know the public wants this. You've got these re-mastered DVDs and box sets. >> You have the DVDs. >> We have the DVDs, CDs. And they know this. So this is putting pressure on them. It's going to happen soon. >> You've got to keep a close watch on those CDs. >> Absolutely. But yeah, they've got to be bleeding money right now. Thinking about the money that they're losing for not having this content out there on the day that all this other stuff is being released. I mean, maybe they're thinking that all those people who would otherwise be downloading the MP3s through iTunes are going to buy the CD instead. But I think that's, you know-- >> So we'll get it. >> Yeah. >> The longer they take-- >> The more their chance dies. >> Exactly, exactly. >> I'm getting old. >> The drama is not there. The longer they take, they're going to lose some of the buzz that they have right now. >> That would have been the one more thing that-- >> That would have been deserving. >> Like they did the U2 iPod, you know, the Beatles iPod with different versions, the Sgt. Pepper version, you know, the [inaudible] version. >> All right, so one of the big things about Apple, of course, in recent weeks has been the mystery around the approval of applications in the iPhone App Store. There was a lot of discussion at the keynote about new apps. But there wasn't a discussion of the apps, the approval process. And I think this is a very important issue. I mean, obviously the FCC does, as well. What's the latest on what's happening inside the App Store? >> Well, the reason they didn't talk about it there is because, yeah, we think it's an important issue, but the average consumer could quite frankly care less. They just are going to buy whatever is in the App Store. But it is important. And I don't think that was really the right forum to talk about it. But the latest that we know is, I mean, what we really found out a couple weeks ago, was that they have about 40 people that are responsible for reviewing about 80,000 apps a week, which is just insane. >> 40 people for 80,000 apps a week? >> Mhmm. >> OK. Now is the time to get your porno app through the store. >> It's some ridiculous number. I don't remember if it was 80,000 or 8,000. But, you know, they say that I think 90% of the apps get approved within two weeks. And, you know, I've talked to developers, and they say that that's true, that they usually get a response, you know, somewhere in the area of two weeks. But yeah, there's still a lot of questions, still things we don't know, still a lot of, there's a lot of gray area in terms of what's OK, what's not OK. And I think that Apple is starting to open up about that. But I don't think we're going to see some sort of public announcement of this is how it works. >> And from what I hear from developers too, there is kind of like an unspoken fast track for some higher profile apps to get through and get, you know, get approved. >> The super slow track for the other apps, like Google's. >> Right, well, there's other things going on there. But, I mean, you can look at something like MLB. So you can get baseball. Any baseball game, if you pay for it, you can get it, you know, through the application on the iPhone. But yet you can't use the Sling app over the 3G connection. You can only use Wi-Fi. So, I mean, there's definitely some favoritism going on there, and it's really not clear, you know, from whose angle it's coming from. Is it AT&T, is it Apple? That kind of thing. But there's obviously a fast track for some companies. >> So let's wrap up here. So this was an important announcement for Apple because it shows that, you know, Jobs is back and in charge. It was kind of a necessary product refresh, but far from an exciting one. Seems to be they, you know, bowed a little bit to the music industry, which is very important to Apple's business, did some necessary feature ads. The one more thing, total letdown, I mean, not of that product, but as a one more thing, you know, didn't live up to the other one more things, what's next, what are the next, what are the real one more things that we expect to see? >> Tablet. >> Really? You really think there's going to be a tablet? >> That's the word. Sometime early 2010. >> It would be great for displaying albums, but other than that-- >> Well, I think, I mean, there's a lot of companies that are coming out with tablets, you know, this fall. Toshiba just came out with one. But that runs Windows CE. It's not really anything. The experience isn't all that exciting using it. But I don't know, it hasn't really worked before. But Apple, you know, you've got to give them the benefit of the doubt. They know how to make categories work that were sort of floundering. >> Phone? >> Phone, MP3 player, I mean, a lot of different stuff. >> Yeah? >> I would also add that the New York Times, the Pogue interview where Steve Jobs is talking about how he's spending all this time polishing, you know, exciting new products on the horizon. I can't think of other things that would be that--I can't think an Apple TV refreshes is deserving of Steve Jobs' time right now, you know? >> You don't think Steve is worrying about the Apple TV? >> I do, I do. There was such a demand of video-on-demand, and on the web distribution. I think Apple sees an opportunity there. Everybody else does. >> I'm sure Apple would love to be able to capitalize on video content in equal amounts, as they are doing with music content. I think that, from the outset, was the reason to get Apple TV out there. >> That opportunity, though, might have sailed already, because they've got way more competition. I mean, let's face it, a music Apple is it. But in video, they've got Hulu, they've got YouTube, they've got the cable companies, they now have AT&T. I think maybe that opportunity might have gone. >> Yeah? All right, well, we're out of time. I'd like to thank Greg, Donald, Erica for participating in Episode Number One of Reporters' Roundtable. We will be back next Friday, 1:00 PM, Pacific Time. Send us an e-mail. You can send it to me for now, firstname.lastname@example.org. It's R-A-F-E. And if you've got questions, send them there, and we'll see you next time. Thanks, everyone. And thank you guys for participating. >> Sure thing, yeah.
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