By Neil Hughes
Published: 08:45 AM EST (05:45 AM PST)
While rumors have suggested Apple is courting print publications to deliver content on its anticipated tablet device, company executives recently said they see problems with the current business model.
Analyst Mike Abramsky took part in a client event this week hosted by RBC Capital Markets. He spoke with numerous Apple executives: Peter Oppenheimer, chief financial officer; Eddy Cue, vice president of iTunes and Internet Services; and David Moody, vice president of Worldwide Mac Marketing. The three gave some insight into Apple's current direction, and their thoughts on the company's current status in the market.
They reportedly said that Apple was not enthusiastic about the online book and newspaper market, which was said to have an "unattractive industry structure."
A report earlier this week said that some publishers were not enthusiastic about the Amazon Kindle, because the hardware maker reportedly wanted to keep 70 percent of revenue from content sold on the device. That same report suggested that Apple would
take a different direction and employ its current App Store business model, where it keeps only 30 percent of sales.
Apple in the past has been known to mislead just before a new product arrives. The company suggested it had no interest in the complex phone business model just before
it debuted the iPhone, and it also said it could not create a sub-$1,000 Mac before the $400
Mac mini was unveiled.
Recent reports have stated that Apple has been courting print publications to make their content
available on its forthcoming tablet. The 10-inch, 3G connected touchscreen device is expected to debut in the
first quarter of 2010.
While officials said this week that while the Apple TV is still a "hobby," they believe it is well-positioned to benefit as people migrate to the Web for their video-watching needs. The Cupertino, Calif., company indicated it is looking to do for video what it did for music.
"Video content is expected to be the next 'exploding' opportunity, but requires overcoming industry rights dysfunctionality, competing with other subsidies (cable box, video), and developing the right consumer 'offer,'" Abramsky said.
Apple on Thursday debuted the
Apple TV 3.0 software update. It features a redesigned main menu that makes navigating content easier, and also allows users to view iTunes Extras and iTunes LP content on their TV.
Company officials are also reportedly unfazed by the recent launch of Windows 7. They see Microsoft's operating system upgrade as an opportunity for them to create Mac buying opportunities, for users who do not want to go through the Windows 7 upgrade process. Executives said they see plenty of opportunities for the Mac market share to grow, despite the lack of a sub-$1,000 laptop.
RBC Capital Markets has reiterated its $275 price target for AAPL stock.
