Steve Jobs has finally found a situation he can't bluff or bully his way out of. He has, however, bought his way out of a longstanding tiff with Creative Labs, which holds valuable patents on the workings of music players—including the iPod. A $100 million settlement will end court battles and heal all wounds. Jobs' comment on the outcome is wry and brilliantly understated: "Creative is very fortunate to have been granted this early patent." And in case you were wondering, he adds: "This settlement resolves all of our differences with Creative, including the five lawsuits currently pending between the companies, and removes the uncertainty and distraction of prolonged litigation." The settlement will leave him freer to contemplate finer things, like warm batteries and cool Scandinavians. Folks at Creative, meanwhile, are looking forward to a harmonious future with Apple. Says victorious CEO Sim Wong Hoo: "Apple has built a huge ecosystem for its iPod and with our upcoming participation in the Made for iPod program we are very excited about this new market opportunity for our speaker systems, our just-introduced line of earphones and headphones, and our future family of X-Fi audio enhancement products." Unmentioned: Creative's Zen player, pictured. He's also pleased about the 85 cents per share Creative stockholders will reap from the settlement. Who wouldn't be?
You think gas is expensive? Copper, which formerly sold for around 90 cents a pound, has shot up past $3 a pound. Janet Pinkerton sums up the situation succinctly in the August 2006 issue of Custom Retailer (story not on site): "The copper price spiral has been driven by...a 'perfect storm' of economic factors: ravenous demand for copper and other metals from China and secondarily India, a strong construction market in the U.S., an extremely tight copper inventory supply, labor unrest in key copper mines, and the yet-to-be-quantified impact of fund managers and others speculating on copper futures." The labor unrest seems to be centered in Chile but production is also down in China. Skyrocketing copper will affect not only cables but a/v components as well. They're stuffed with copper wire. Some, like Pioneer's Elite receiver line, even use a thick copper chassis. Higher prices will be the inevitable result. For example: The Outlaw Audio site still quotes the price of the RR2150 stereo receiver as $599, but when I was fact-checking an upcoming review, my source bumped it to $649. Place your order now!
Implementation of the CableCARD may have taken another babystep forward with a court ruling last week. The U.S. Court of Appeals for the DC Circuit upheld the FCC's long-delayed "integration ban." By prying encryption apart from the cable box, as required by a 1996 act of Congress, the FCC wants to speed adoption of CableCARD technology, which enables consumers to plug their cable feeds directly into sets with a card slot. However, although the major TV makers and the major cable operators put their John Hancocks on an FCC-brokered CableCARD adoption agreement as long ago as December 2002, the integration-ban deadline has slipped from January 2005 to July 2006 to July 2007. And the many consumers who have already bought CableCARD-compatible sets have been frustrated to find the standard not supported by their local cable ops. Enough already, said the appeals court. Gary Shapiro of the Consumer Electronics Association hailed the ruling: "Consumers are entitled to a broad array of products that can connect to cable systems featuring innovative new features for competitive prices. In the wake of the court's decision, we are hopeful that cable will stop its foot-dragging and comply with the law for the benefit of consumers." In their defense, cable operators say they've got their eye on a new technology that supplants the card with a chip, not to mention new multi-streaming and IP-based solutions. And they hate the existing CableCARD because it's unidirectional, meaning one-way, meaning no video-on-demand, meaning less lucre. But consumers might wait years for implementation of these new technologies, whereas the CableCARD is here now and waitin' at the church.
Here's to the mating of the ampersand and the asterisk. Mayor Michael Bloomberg is expected to attend tomorrow's grand opening of J&R Express at Macy*s in Manhattan. Founded in 1858, Macy*s has been the city's leading department store for generations. It's a major tourist attraction and its advertising props up the city's newspapers. But Federated Department Stores, owner of Macy*s, has never found a way to make electronics retailing work in NYC. J&R's story is totally different. It started as a great little record shop back in the pre-CD days, then successfully branched out into electronics, but until recently never aspired to move beyond its peculiar cluster of far-downtown spaces near City Hall. Locals love it, but most people reading this probably know the Internet operation better than the stores. So now Macy*s will have the ideal partner for selling electronics, and J&R will expand into midtown, with its flocks of tourists and shoppers, just down West 34th from the Empire State Building. BTW, the weeping statuary pictured is a memorial for Isidor and Ida Strauss in tiny Strauss Park at Broadway and West 107th Street. Isidor acquired Macy's (then with no asterisk) in 1896 and moved it to the current iconic location in Herald Square. In 1912, he and his wife Ida went down with the Titanic.
In the latest act of a long-running drama, Dish Network PVRs will not be judicially disabled—at least, not yet. A federal appeals court has blocked an injunction from a Texas district court that would have shut down Dish video recorders. Dish's adversary is TiVo and the issue is patent infringement. TiVo has successfully argued that Dish PVRs violate TiVo's patents, winning $74.9 million in penalties. That matter was decided months ago, but what to do about it has not, so millions of Dish PVRs have the sword of Damocles hanging over their heads. The Dish people say they expect to reverse the Texas district court decision and will "continue to work on modifications" to the allegedly infringing machines. Even if TiVo gets a short-term win in this situation, its real challenge is competition from not only satellite DVRs but those marketed by cable and emerging telco-video services. No judge or lawyer is going to make that problem go away.
Cynical Steve Jobs is marketing one of the worst-sounding audio products ever. As an audiophile, I can view this only with alarm and outrage. No, I'm not talking about the iPod, you foolish thing. I enjoy my nano as much as the next person. I'm talking about the earbuds that come with the iPod. They don't even come close to taking advantage of the sound quality that the deliriously popular music player is capable of delivering.
Back when Jimmy Carter was president (or was it Ford?), my first audio system featured a Pioneer SX-434 receiver. Even then, manufacturers had figured out that SX sells. My old receiver was rated at 15 watts per channel and weighed 18 pounds. Today, I'm reviewing a Pioneer VSX-816 A/V receiver (SX still sells) with 110 watts times seven. At 20.3 pounds, it's put on some weight, but what a difference a couple of pounds can make.
It wasn't until I uncrated both the Paradigm Cinema 330 speakers and the Harman/Kardon AVR 340 receiver that I realized I'd found something rare in the home theater realm—a visual match between speakers and receiver. Did some invisible hand simultaneously guide Paradigm's whizzes in Toronto and Harman/Kardon's design squad in Northridge, California? These two large companies have no connection that I know of. Yet, this month's Spotlight System is a genuine fusion of Canadian and Californian design sensibilities.
A Tokyo racetrack has become home to the world's largest large-screen video display. The screen is 218 feet wide (by 66 by 37). Judging from the picture, its ratio of width to height is way more than the standard 16:9 of DTV in general. Behind the display is Mitsubishi's Aurora Vision LED technology. Here LEDs are being used to produce the picture directly, though they're also creeping into consumer DLP displays as a substitute for the color wheel. The screen was installed in 35 pieces and cost $28 million. Apologies for the headline. Couldn't resist. A larger edit of the picture, and three others, are in the Galleries.
More information has emerged about Microsoft's forthcoming Zune music player, thanks to my colleagues at This Week In Consumer Electronics, who always have their ears to the ground on the retail scene. The company has been briefing retailers and TWICE have been prying out morsels of information about Redmond's supposed iPod-killer. Here are the details (I would rather slit my wrists than say deets):