Dvorak weighs in on new U2 iPod and its implications
October 27, 2004 - 04:05 PDT   Columnist John C. Dvorak has a article on CBS Marketwatch today about Apple's new U2 iPod (introduced yesterday) and the challenges the new music-bundling scheme presents. "The industry is gah-gah over this deal because it appears to lower the price of music on a cost-per-song basis," writes Dvorak. "In fact, this is an illusion. While new music that is sold on a downloadable basis tends to send about 65-cents to the record companies, other deals can be struck for old music." Dvorak feels that this new model could open up a "Pandora's Box" for the industry.

"With this U2 bundle the numbers skew wildly in Apple's favor with two-thirds of the money going to Apple. In fact the bundle done as a licensing deal should be sold for far less than (US)$100, not $149. In fact the bundle should be more profitable for Apple and hardly represents any sort of breakthrough in record pricing."  [ Email this story ]

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