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A Mixed Morning for Apple


There?? good news and bad news in Cupertino this morning.

The good, of course, is the iPhone launch, which could hardly have gone better. While it?? hard to figure out what analysts?reports of sales of more than 500,000 units are based on, it is clear that Apple moved a whole lot of phones over the weekend. Ther pace of sales is likely to slow down because of supply shortages, especially of the muck more desired 8 gigabyte version, but that’s a problem anyone would happily have.

The bad news comes from Vivendi’s Universal Music Group, which announced that it does not plan to renew its license for the iTunes Store to sell its catalog of recordings. This could be a negotiating tactic, since it’s not clear that UMG can afford to give up what has become the largest retailer of music. But it could be a serious blow to the iTunes business strategy. The loss of Vivendiwould be a particularly embarrassing blow to Apple: They might still be able to sell the special-edition U2 iPod, but the Irish rockers’ music would no longer be avaialble from the iTunes Store.


Steve Ballmer, Power Forward
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