Tech week in review: Does Universal want an iPod tax?

The record label sours on iTunes. Plus: Google buys a phone company, Microsoft fixes your XBox, and Apple quietly releases some kind of phone or something.

By Farhad Manjoo
July 7, 2007 9:39PM (UTC)
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Universally foolish. The Universal Music Group decided not to renew its contract with Apple to sell music through iTunes. Details on the negotiations between the two firms are murky, but it seems that the record company -- whose labels produce a third of all new albums released in the U.S. -- will now sell its songs through iTunes on a kind of ad hoc basis.

Industry observers suggest the deal faltered over Universal's desire for more pricing flexibility than Apple would allow -- the company wants to be able to sell songs for more or less than Apple's standard 99 cent price tag. Universal may even be angling for a share of revenue Apple gets from selling iPods (Microsoft pays record companies a similar fee for each Zune it sells). But Universal is on shaky ground here; sales through Apple's iTunes store accounts for a healthy slice of its bottom line, and most of its best customers, of course, own iPods. Does Universal really want to anger these people?


Google buys GrandCentral. After several weeks of rumors pointing this way, Google announced that it had acquired GrandCentral, a company that offers a clever and much-loved "phone integration" service. The company mashes together all your phone numbers -- home, work, cell, etc. -- into one GrandCentral number; when people call you there, all or some of your phones ring, depending on the caller. Google says that current GrandCentral users should see no interruption in service, but while the two companies' networks are being integrated, GrandCentral will only be available to new customers through an invitation-only private beta.

Faulty Xboxes. Microsoft announced that it would spend $1.15 billion on repairs for many of the 11 million Xbox 360 video game systems it has sold since Nov. 2005. During the past several months, players who used their systems a lot noticed an awful problem -- three red lights flash on the machine, then it shuts down. Gamers call it the Red Ring of Death.

One more thing.... Unconfirmed reports suggest Apple released some kind of phone or iPod or small Web device at the end of last month. Have you heard anything about this? Yeah, me neither. But apparently the company sold a million units in a single week, some kind of record. Obviously, someone's already hacked it.

Farhad Manjoo

Farhad Manjoo is a Salon staff writer and the author of True Enough: Learning to Live in a Post-Fact Society.

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