Riding the iPhone publicity wave

Dan Grech Jul 2, 2007

TEXT OF STORY

Scott Jagow: I’m sure the folks at Apple are very busy this morning counting the mountain of cash that came in over the weekend, so they probably don’t have time to give us the official sales numbers. But we asked around, and analysts say Apple probably sold half a million iPhones since Friday night. The device is already harder to come by in the stores for the $500 or $600 retail price. On eBay, the iPhone was going for an average of $750.

But here’s a little cloud over Apple’s parade: Universal Music is refusing to renew its annual contract with Apple. That means Universal could pull U2 and other big name artists from iTunes.Not likely, but why even threaten it? Dan Grech reports.


Dan Grech: Universal and other music companies don’t like Apple’s dominance of digital music, or iTunes’ blanket 99 cents per song price.

Larry Dignan is a blogger at ZDNet.

Larry Dignan: iTunes is the dominant way to buy music. And you couple that with the iPod, you’ve got quite a juggernaut.

Dignan says Universal is refusing to sign an annual contract to give it more leverage over Apple.

Universal’s record labels account for one out of every three new releases sold in the U.S., but Universal needs iTunes as well. Apple eats up three quarters of digital music sales.

Dignan says Universal’s game of chicken may backfire.

Dignan: How much clout do they have? If they say, okay, we’re pulling everything from iTunes. Do you think Bono’s going to be a little annoyed by that?

After all, Bono helps Apple market a special edition U2 iPod.

I’m Dan Grech for Marketplace.

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