Apple e-book trial: How the case has unfolded so far
Has the judge already made up her mind? Before the trial even started, Judge Cote offered to share her initial thoughts with Apple and the DOJ. Unfortunately for Apple, Cote said that based on the evidence submitted, she believed Apple to be at fault. Apple attorney Orin Snyder brought those comments up shortly after he started his opening statement, asking Cote to "hit the delete button on any tentative view that might exist in the court's mind today." Cote almost immediately cut off Snyder, saying that she only gave the opinion because both sides agreed to it, and that she wouldn't consider any documents as evidence until they're officially submitted. She noted that Apple had months to think about whether it wanted a tentative view, and her view was just that -- tentative. "This isn't a vote about whether I like Apple or anyone else does," Cote told both sides. "The deck isn't stacked against Apple. ... You have my firm commitment ... that I will do my very best to follow the law." Cote in recent days in the trial seemed to be coming around to Apple's arguments that it didn't force publishers to change their deals with Amazon. Publishing bigwigsCEOs of some of the country's biggest publishers have taken the stand in the trial. Penguin Group USA CEO David Shanks, Simon & Schuster CEO Carolyn Reidy, Harper Collins CEO Brian Murray, Macmillan CEO John Sargent, and Hachette CEO David Young have all testified about negotiations with Apple, as well as their relationships with Amazon. (Note: Simon & Schuster is owned by CNET parent company CBS.) All believed Amazon's $9.99 pricing to be too low, and all wanted a way to change it. The CEOs have testified that they didn't believe they did anything wrong, but each company reached a deal with the DOJ to settle the government's suit against them.Eddy Cue, Apple's senior vice president of Internet software and services, arrives at court in Manhattan with an Apple attorney on Thursday.Sarah Tew/CNETEddy Cue's "minion" Perhaps the funniest moment of the trial came during testimony by Simon & Schuster's Reidy. The DOJ presented e-mails between Reidy and her boss, CBS CEO Les Moonves, that talked about Reidy's conversations with Apple. She had initially met with Eddy Cue, but his deputy, Keith Moerer, later handled many conversations. Reidy told Moonves, via e-mail, that "A representative of Apple (not the head guy, but one of his minions) came to New York at the end of week before last to meet with all of the major publishers." Moerer, Apple's corporate representative in the trial, was in the courtroom when the comments were discussed. "Sorry, Mr. Moerer," Judge Cote said as people seated in the courtroom looked at Moerer and laughed. "Yes, my apologies," Reidy said. "That's just what I was thinking, your Honor." "We're all minions from some perspective, even me," Cote responded. Publishers call Amazon a bullyIt may be Apple on trial, but Amazon's name comes up nearly as often. The company dominated the e-book market at the time Apple was forming iBooks, and publishers were worried about Amazon's low pricing. After reaching deals with Apple, all of the publishers changed their terms to in what in the industry is known as an agency model, where they set the pricing. Under the previous wholesale model, Amazon had set the prices, which were at $9.99 for the latest books.Apple CEO Steve Jobs, now deceased, announced the first iPad in January 2010.James Martin/CNET Those conversations with Amazon weren't easy, the publishers testified, and Amazon even threatened them. The publishers portrayed themselves as victims of Amazon, and Apple attempted to draw parallels between itself and Amazon, showing that the different nuances of their respective deals are par for the course in the industry, and not a conspiracy to inflate prices. "They yelled and screamed and threatened," Penguin's Shanks said during his testimony the first week of the trial. "It was a very unpleasant meeting." And Simon & Schuster's Reidy said Amazon threatened to stop selling her company's physical books along with its digital books.Amazon, meanwhile, portrayed itself as the victim, forced into agreements it never wanted. Insight into content deal negotiationsApple, Amazon, and other big tech giants are understandably tight-lipped about their deal-making process. The trial has provided unprecedented insight into their wheeling and dealing. Apple has tried to show its actions are normal steps that all companies take when negotiating deals, and it has said reaching deals with publishers wasn't easy. Some notable insights we've learned about Apple's tactics:Apple's dealmakers -- Cue, Moerer, and attorney Kevin Saul -- had only a couple of months to reach deals with publishers for iBooks. Cue testified he got the go-ahead from Jobs for iBooks in November2009, and he had to have the deals done by the late-January iPad announcement.Apple commonly tells companies that "the train is leaving the station" to get them to sign deals. It often says how many companies have already signed on, and it will tell companies who else it's talking to.Apple typically pursues similar deals with all companies, saying it wants to give big and small companies "a level playing field." Apple hammers Google The most tense and "Law and Order"-like moment of the trial came on the last day of the first week. Apple started to pick away at the DOJ's claim that the tech giant conspired to inflate e-book prices by repeatedly and rapidly firing questions at a key Google witness. The tactic paid off for lead Apple attorney Snyder, who began to wear down on Thomas Turvey, director of strategic relationships for Google. Turvey appeared increasingly frazzled and frustrated as the afternoon went on.The Apple e-books price fixing trial is being argued in district court in Manhattan.Sarah Tew/CNET During his testimony, Turvey admitted that he couldn't remember which publishing executives he spoke to, the circumstances around those conversations, or any helpful details. He offered few specifics and kept referring to his written testimony. "You can't recall the single name of anyone at a single publisher?" Snyder asked."No," Turvey said, which became a common response. Smoking gun or just a draft e-mail?The DOJ in Week 2 of the trial presented an e-mail from Jobs that it said showed Apple required publishers to change their contracts with Amazon. In the message, Jobs responded to price tiers suggested by Cue: "I can live with this, as long as they move Amazon to the agent model too for new releases for the first year. If they don't, I'm not sure we can be competitive..." However, Apple's attorneys said the e-mail was simply a draft that had never been sent. Instead, they cited another version of the same e-mail, where Jobs said the following: "I can live with this as long as they also agree to the other things you told me you can get: The retail price they will set for any book will be the LOWER of the applicable 'iTunes' price below OR the lowest wholesale price they offer the book at to anyone else, with our wholesale price being 70% of such price." It's unclear whether both messages were drafts, or if one actually was sent. CNET has heard there are actually many drafts of that same message, but we'll have to see if they're presented in court. Apple attorney Snyder is likely to bring up the message during Cue's questioning Monday.Eddy CueCue is one of the most vital witnesses in the trial. He served as Jobs' right-hand man for nearly two decades, securing deals that helped Apple dominate markets such as music. The Justice Department has portrayed Cue as the "chief ringleader of the conspiracy" to control e-book pricing, and it has said his testimony would show Apple colluded with the publishers to boost digital book prices and hurt rivals such as Amazon. Conversely, Apple's attorneys are counting on Cue to reinforce their defense that Apple's actions simply were standard negotiation tactics. During his testimony Thursday, Cue admitted that Apple's deals with publishers caused e-book prices to rise, and he wasn't surprised when Amazon had to change its business terms with publishers. The Justice Department also tried to show that Apple didn't care if consumers had to pay $12.99 or $14.99 for e-books instead of $9.99, but Cue disputed such comments. Related stories:It was Apple's way or the highway, e-book execs sayApple: We wanted a 'level playing field' for publishersApple and DOJ's e-books court battle kicks offApple and the DOJ face off over e-book prices (FAQ)"Our consumers were protected by my price points," he said. "I thought we were going to treat our consumers very, very fairly." Apple's questioning of Cue started Thursday afternoon but will resume next week. Splitting up the music and book marketsAnother tidbit from Cue's testimony is that Apple considered making a deal with Amazon to split up the digital book and music markets. Apple would get music, while Amazon would get books. That would have been a very big no-no in the eyes of the government, but Apple never actually pursued that deal. The absentee witness -- Steve JobsJobs may have died nearly two years ago, but his public and private comments have played a big role in the case. Along with the draft e-mail the DOJ presented, government attorneys also have cited comments Jobs made to The Wall Street Journal that book prices would be the same at Apple, Amazon, and other retailers, and remarks Jobs made to his biographer, Walter Isaacson: Amazon screwed it up. It paid the wholesale price for some books, but started selling them below cost at $9.99. The publishers hated that--they thought it would trash their ability to sell hardcover books at $28. So before Apple even got on the scene, some booksellers were starting to withhold books from Amazon. So we told the publishers, "We'll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that's what you want anyway." But we also asked for a guarantee that if anybody else is selling the books cheaper than we are, then we can sell them at the lower price too. So they went to Amazon and said, "You're going to sign an agency contract or we're not going to give you the books."Apple, meanwhile, has argued that it's difficult to interpret someone who can no longer explain himself. And Apple's attorneys -- as well as Cue -- have said the government has misinterpreted what Jobs actually meant.What's up next week?Cue's back on the hot seat -- Although the seat won't be quite that hot, as it's Apple's lead attorney now questioning the executive. The judge has tended to ask questions of each witness, and she's likely to have a few for Cue.More experts and defense witnesses -- A debate has been going on during the trial about whether digital book prices did in fact rise after the iBookstore launched. Apple's attorneys have argued that pricing has fallen, but the Justice Department has said prices spiked "dramatically" after Apple's entry into the market. Both sides are presenting their own experts to back their claims. The DOJ is expected to rest its case after Cue's testimony is complete. After that, Apple is expected to call a couple of experts, as well as Theresa Horner, vice president of digital content at Barnes & Noble; and Robert McDonald, head of Apple's U.S. iBookstore.Closing arguments -- These are scheduled for Thursday and represent each side's last chance to make its case. WWDC 2013 keynote (pictures)See full gallery1 - 4 / 100NextPrev
iPod Shuffle (3rd-gen) review, surprises
iPod Shuffle (3rd-gen) review, surprises
The CNET review covers the nitty-gritty, but I'm here to offer a few of my own personal observations after spending a day with Apple's new Shuffle. Here's a list of ways the Shuffle surprised me.Vanishing act. Over the course of just one day, I must have lost the Shuffle at least four times--just sitting at my desk. Nicole Lee can vouch for this. She heard all my screams from the other side of the cubicle. Now, I expected this thing would be easy to lose, but the surprising part is that the Shuffle's tiny size was only part of the problem.The Shuffle's resemblance to a USB stick probably threw me the most. Since I typically have at least two or three thumb drives scattered on my desk at any given time, the addition of a nondescript black or silver $80 Shuffle is easy to dismiss. Jasmine would actually wear it. If you've ever seen a First Look video from my MP3 cohort Jasmine France, you can get a sense of how much this girl likes fashion. I wouldn't have thought in a million years that she'd go for the new Shuffle's muted, stoic design, but it turned out to be her favorite feature. I guess there's something to be said for wearable tech that just blends in, and doesn't draw attention to itself. What's not surprising: I still don't understand women.This content is rated TV-MA, and is for viewers 18 years or older. Are you of age?YesNoSorry, you are not old enough to view this content.PlayPodcasts and audiobooks. Not everyone works out to throbbing techno at the gym. Some people take their mind off the treadmill by listening to a good book or their favorite podcast. The Shuffle now supports automatic podcast and audiobook management, and is smart enough to keep the material from popping into the default music shuffle. It's also smart enough to play these files sequentially, regardless of whether the shuffle switch is on or off. The Shuffle treats podcasts and audiobooks as playlists, so if you want to hear them you have to press and hold the button until VoiceOver starts reeling off your playlists. As a side note, the remote's volume buttons let you quickly scroll through playlists, so you're not waiting forever for VoiceOver to talk its way down to your playlist of Xylophone Songs.You can use the Shuffle with other headphones, sorta. There's a lot of groaning going on about Apple's decision to shift the controls to the headphone cable, and the effect that has on using third-party headphones or stereos. I'm totally with you. For what it's worth, though, the Shuffle will technically play music to anything that uses a standard 3.5mm connection (headphones, aux cable). I connected my Ultrasone HFI-2200 headphones to the Shuffle, switched it on, and music started playing immediately. Now, without Apple's remote clicker on the bundled earbuds, you can't control volume, pause, skip, or manage playlists--but you do get to hear music. The Shuffle always remembers the last volume setting used, and you can also throttle down the player's maximum volume using the device overview pane in iTunes.
The CNET review covers the nitty-gritty, but I'm here to offer a few of my own personal observations after spending a day with Apple's new Shuffle. Here's a list of ways the Shuffle surprised me.Vanishing act. Over the course of just one day, I must have lost the Shuffle at least four times--just sitting at my desk. Nicole Lee can vouch for this. She heard all my screams from the other side of the cubicle. Now, I expected this thing would be easy to lose, but the surprising part is that the Shuffle's tiny size was only part of the problem.The Shuffle's resemblance to a USB stick probably threw me the most. Since I typically have at least two or three thumb drives scattered on my desk at any given time, the addition of a nondescript black or silver $80 Shuffle is easy to dismiss. Jasmine would actually wear it. If you've ever seen a First Look video from my MP3 cohort Jasmine France, you can get a sense of how much this girl likes fashion. I wouldn't have thought in a million years that she'd go for the new Shuffle's muted, stoic design, but it turned out to be her favorite feature. I guess there's something to be said for wearable tech that just blends in, and doesn't draw attention to itself. What's not surprising: I still don't understand women.This content is rated TV-MA, and is for viewers 18 years or older. Are you of age?YesNoSorry, you are not old enough to view this content.PlayPodcasts and audiobooks. Not everyone works out to throbbing techno at the gym. Some people take their mind off the treadmill by listening to a good book or their favorite podcast. The Shuffle now supports automatic podcast and audiobook management, and is smart enough to keep the material from popping into the default music shuffle. It's also smart enough to play these files sequentially, regardless of whether the shuffle switch is on or off. The Shuffle treats podcasts and audiobooks as playlists, so if you want to hear them you have to press and hold the button until VoiceOver starts reeling off your playlists. As a side note, the remote's volume buttons let you quickly scroll through playlists, so you're not waiting forever for VoiceOver to talk its way down to your playlist of Xylophone Songs.You can use the Shuffle with other headphones, sorta. There's a lot of groaning going on about Apple's decision to shift the controls to the headphone cable, and the effect that has on using third-party headphones or stereos. I'm totally with you. For what it's worth, though, the Shuffle will technically play music to anything that uses a standard 3.5mm connection (headphones, aux cable). I connected my Ultrasone HFI-2200 headphones to the Shuffle, switched it on, and music started playing immediately. Now, without Apple's remote clicker on the bundled earbuds, you can't control volume, pause, skip, or manage playlists--but you do get to hear music. The Shuffle always remembers the last volume setting used, and you can also throttle down the player's maximum volume using the device overview pane in iTunes.
Apple starts off new year with record App Store sales
Apple starts off new year with record App Store sales
Apple's iPhone, iPad and iPod Touch users spent almost half a billion dollars on apps and in-app purchases during the first week of January -- a new record for the App Store, the company announced Thursday. That comes on top of the single biggest day ever for sales in its App Store -- New Year's Day 2015 -- and a record-breaking 2014, Apple said. Last year billings at the App Store increased by 50 percent over 2013, the company said, and app sales provided iOS developers with more than $10 billion in revenue -- bringing the total earned by developers to date to $25 billion. Though Google's mobile operating system, Android, dominates the marketplace, developers gravitate toward Apple's iOS operating system as their top platform because users of the company's mobile devices spend more money on apps and games. On Apple's side, the App Store may not be its biggest moneymaker, but it still contributes a healthy share of revenue. Apple said last year that App Store sales came in at more than $10 billion in 2013. Though today's announcement didn't include a sales figure for 2014, the 50 percent increase in billings would presumably put that figure at somewhere around $15 billion. Since Apple snags 30 cents for every dollar spent in the store, Apple's cut of the action for 2014 could be about $4.5 billion. Apple did not respond to CNET's request for comment. The company pointed to a number of factors that it believes played a role in the App Store in 2014 and the start of 2015. Launched last year, iOS 8 included Swift, a new programming language designed to be more user friendly for developers. The latest version of Apple's mobile OS also introduced HealthKit, which lets developers of health and fitness apps tie in their data with the new Health app. Another platform, called HomeKit, allows developers to design apps to work with home-automation devices. Last year, the App Store also introduced new features such as app previews that let users watch a video demo of an app before deciding whether to download or purchase it. Another option for developers called App Bundles lets users save money by buying up to 10 apps in one shot at a reduced price. Apple also talked up its new Apple Pay mobile-payments service. Using the iPhone 6 or iPhone 6 Plus, users can tap into Apple Pay to purchase physical items at supported retailers. But they can also use the new iPhones, as well as the latest iPads, to purchase iTunes and App Store content via Apple Pay. Many of these features are still new, so it's difficult to gauge exactly how much they've influenced App Store developers, users and sales so far. Adoption of iOS 8 among Apple users has been slower than it was for iOS 7 over the same period of time. The latest numbers from Apple show a market share for iOS 8 of 68 percent. But as more people upgrade to the latest version of iOS, developers are likely to take greater advantage of the latest features.
Apple's iPhone, iPad and iPod Touch users spent almost half a billion dollars on apps and in-app purchases during the first week of January -- a new record for the App Store, the company announced Thursday. That comes on top of the single biggest day ever for sales in its App Store -- New Year's Day 2015 -- and a record-breaking 2014, Apple said. Last year billings at the App Store increased by 50 percent over 2013, the company said, and app sales provided iOS developers with more than $10 billion in revenue -- bringing the total earned by developers to date to $25 billion. Though Google's mobile operating system, Android, dominates the marketplace, developers gravitate toward Apple's iOS operating system as their top platform because users of the company's mobile devices spend more money on apps and games. On Apple's side, the App Store may not be its biggest moneymaker, but it still contributes a healthy share of revenue. Apple said last year that App Store sales came in at more than $10 billion in 2013. Though today's announcement didn't include a sales figure for 2014, the 50 percent increase in billings would presumably put that figure at somewhere around $15 billion. Since Apple snags 30 cents for every dollar spent in the store, Apple's cut of the action for 2014 could be about $4.5 billion. Apple did not respond to CNET's request for comment. The company pointed to a number of factors that it believes played a role in the App Store in 2014 and the start of 2015. Launched last year, iOS 8 included Swift, a new programming language designed to be more user friendly for developers. The latest version of Apple's mobile OS also introduced HealthKit, which lets developers of health and fitness apps tie in their data with the new Health app. Another platform, called HomeKit, allows developers to design apps to work with home-automation devices. Last year, the App Store also introduced new features such as app previews that let users watch a video demo of an app before deciding whether to download or purchase it. Another option for developers called App Bundles lets users save money by buying up to 10 apps in one shot at a reduced price. Apple also talked up its new Apple Pay mobile-payments service. Using the iPhone 6 or iPhone 6 Plus, users can tap into Apple Pay to purchase physical items at supported retailers. But they can also use the new iPhones, as well as the latest iPads, to purchase iTunes and App Store content via Apple Pay. Many of these features are still new, so it's difficult to gauge exactly how much they've influenced App Store developers, users and sales so far. Adoption of iOS 8 among Apple users has been slower than it was for iOS 7 over the same period of time. The latest numbers from Apple show a market share for iOS 8 of 68 percent. But as more people upgrade to the latest version of iOS, developers are likely to take greater advantage of the latest features.
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