Should RealNetworks sue Apple Computer over iPod firmware changes?

“The fact that Apple is now actively changing the product to block Real Networks who did the work to support the iPod, changes things quite a bit. Apple crossed the line. I support them using the iPod’s amazing success to bolster iTunes sales. I don’t think they should be forced to help others as long as that is where the strategy stopped. I can not support them actively blocking others from trying to offer competitive alternatives to iTunes on the iPod,” AudioGoGo.com writes.

“This is exactly like the accusations that Microsoft tried to break DR-DOS or other products from working with Windows. Because Apple has 90% of the HD player market, this action effectively uses the iPod to lock Real Networks out of selling and competing in that market,” AudioGoGo.com writes.

“To take this metaphor outside the computer world. Imagine 90% of all passenger cars were Fords. I don’t think Ford should have to offer third-party stereos, or help makers of third-party stereos design them to work. The moment Ford prevents the owner from choosing one of those stereos, by changing the car’s wiring, that is wrong,” AudioGoGo.com writes. “For this reason, I would support Real Networks if they sue Apple over this change of the iPod. I prefer competition to happen in the market place, not the courtroom. However, in my opinion this alteration of the iPod specifically to block a competitor, might justify legal action. No one is forcing iPod owners to switch from iTunes, no one should prevent them from choosing an alternative if it is there.”

Full article here.

MacDailyNews Take: So Apple should be forced to always make sure that third-party hacks work, even though Apple does not promise iPod “Harmony” support or even mention it anywhere? In which universe exactly would such a lawsuit have any merit at all? The reason the iPod+iTunes combo works so well is that third-rate companies aren’t involved. If Real wants to sell songs that work with Apple’s iPod family of music players, they should develop a store that becomes so popular that Apple wishes to work with them. Or they should develop a player that becomes so popular that Apple decides to support it with their iTunes Music Store. Real should work on competing instead of trying to latch onto someone else’s successful enterprise like a parasite.

57 Comments

  1. How do we know it was changed to block Harmony? If a lawsuit comes from this, the first question to come up will be what all changed and why. Until Apple gives that info, no one knows anything.

  2. A lawsuit would be good, Real Networks would eventually go out of business from it.

    The reason I can say that is because Apple is sitting on a ton of surplus cash at the moment, they can afford to keep a trial going, Real can not. Then once Apple wins the case, sue Real for lost profits from the trial. ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

  3. I’ll rant here since I couldn’t post on the linked site.

    This is the dumbest line of thinking I’ve seen on this topic so far.

    The fact is, to run software (MS or non-MS) on a windows PC (which most people do, at least in business), you need to buy a Windows licence from Microsoft. That is the nature of their monopoly.

    Apple does not have a monopoly with the iPod. Not only does the iPod support a pretty wide range of file types, but you have options besides the iPod if you define the “need” as a device to listen to digital music files. If you don’t like Apple/iPod, go buy a Real or Dell and play your music on that.

    You are only locked into the iPod if you CHOOSE to buy an iPod and ALSO buy iTunes songs in Fairplay AAC format.

    This moron needs someone to explain the definition of a monopoly.

    In any case, I don’t think Apple has much to worry about considering the non-penalties that MS received in their anti-trust settlements.

  4. Gee, reminds me of Galoob suing the pants off of Nintendo in the late 80’s for not allowing their NES-enhancing Game Genie to be sold in the USA.

    I really want to believe Apple’s in the right with this decision, but I can’t find one ethical reason to think that way.

  5. From another thread…

    Apple ‘invented’ the ‘iPod’. Apple gets to ‘choose’ which software that they want to interoperate with it, not Real.

    I think you need to consider what has been done – and what the ‘collateral damage’ is.

    If I may… Apple disabled ‘Harmony’, the ‘collateral damage’ would be that Real’s AAC files are now ALSO (unfortunately?) disabled.

    And if you extend my ‘observation’ further, you’ll notice that Apple doesn’t seem to be worried about whether or not all of people’s MP3s are legal – they still play WITH ITUNES! Get it? The optimum solution for Apple to SUPPORT: Apple iPod is ‘controlled’ by Apple iTunes software.

    FWIW, I agree with some in-as-much that the iPod ‘could’ have more ‘chooses’ for legal downloads (perhaps more ‘stores’ available, WITHIN iTunes!). But as an Apple iPod user I’ll ‘side with’ Apple in the belief that iTunes is the optimum ‘software solution’ when using an iPod.

  6. The author is off base. Real wouldn’t have anything to sue over. And, at this point does anyone really know what Apple changed or why, no!
    And his point about Ford changing wire harnesses being wrong, They do that all the time, every new/updated model.
    —–
    I thinks the fact that nobody noticed for almost a month pretty much says Real’s investment in reverse engineering was a total waste. They probably wrote it off on their PR budget ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

  7. So all the people who go kicked off Xbox Live can use the same defense. “I used a hack, so you should support it.” Since MS hasn’t payed anyone off yet, I don’t see Apple changing this.

    It also took a month for it to be found out too. I guess Real didn’t want their sales to go down until the last minute, when someone called them up and said, “It doesn’t work on my iPod, whats going on.” Or they were trying to hack it again before people found out.

  8. I disagree with your analysis that Apple should have to support thrid party ‘hacks.’ Firmware to the ipod is no different than the OS of a computer. If an OS vendor updates the software and third party drivers or hacks do not work, the third party company needs to react, not the OS company. Now if the OS company promised compatitbility with the third party company’s hack, then that is a different story.

    Your analysis of Ford is also wrong. Carmakers will often make radio changes from stadard DIN chasis mount radios. An exapmple is the Ford Taurus which has an oval radio which integrates HVAC controls. Third part companies have made adapters ot hacks to allow aftermarket stereos work. If Ford comes out wth a new Taurus with a different radio design, they are not liable because the old adaptyer does not work.

    Should Verizon be sued because their phones cannot be deactivated and then utilized in the Cingular service. I think not.
    In the cellphone business, people have a choice to pick one service or another and the phones are not interchangable. And no one is complaining.

    The iPod/iTunes combo is no different. People can choose the other network (WMA format) to play with other ‘networks’ or they can choose the Apple network. The consumer has a choice.

  9. When Real decides to open their online music distribution beyond the Windows-only market, I might then have some symphony for them. As it stands now, the preached “freedom” and did not deliver!

    Harmony should be about multiple platforms, not the “it only works on Windows” nonsense!

  10. This writer’s analogy is seriously screwed up. How exactly is a radio essential to the running of a car? For the analogy to make sense, his argument should be that Ford should allow other ENGINES to run in their cars. Which is, of course, ridiculous.

  11. All other companies should sue Apple for making the iPod so well that all other products look so crappy they are not selling. C’mon, no one should ever be allowed in business to develop and commercialize a product so much better than the others. This is business malpractice!

  12. Sitting back and allowing Real’s songs to work on the iPod would be seen as an unofficial endorsement by Apple and down the road would be obligated to make sure the hack works on their iPod. Apple’s action PREVENTS non suspecting users from buying songs that will or may not work in the future!

    If real wants to sell music that works on Apple’s iPods, all they have to do is,
    1. Sell CD’s. They work great!
    2. Sell mp3’s or AAC music that does not have copy protection. (Most CD’s don’t have copy protection)

  13. Dear Steve,

    I know that I wasn’t invited to your last party… and I know that your other guests didn’t want me there either… and I know that I crashed it against “most” peoples wishes, but I promise that this time I’ll behave and play fair and live in harmony if you would only send me an invitation….. I promise… plese… oh please.. oh please.

    Sincerly,
    Robert Glaser
    CEO RealNetworks

    Dear Rob,
    I’m truly sorry, but I must also withhold an invitation to the next party as well. As soon as you learn how to behave in public, I will reconsider.

    Yours truly,
    Steven Jobs
    CEO Apple Computer, Inc.
    CEO Pixar

  14. Or, another way to look at it may be….

    Since “Harmony” was a “hack” in the first place…. it was probably seen as a “security hole”…. and, thus… treated in the same regard….

    The “security hole” was patched…. by Apple… and Glaser is left sitting in the back of his Krispy Kreme truck…

  15. Good point MDN! That’s exactly why Microsoft should block Apple from being at ALL able to work with Windows. That way Apple can in no way communicate with Microsoft computers. I mean, why should Microsoft worry about another company’s product? They never mention Mac OS support anywhere! If Apple wants to get in on it, they should develop a computer that’s as successful as the Windows computer, rather than leeching off them.

  16. “this alteration of the iPod specifically to block a competitor”

    Another journalist trying a case in the media. Can the accuser prove that Apple made the change specifically and only to block Real’s (dis)Harmony? Apple stated when Real (Steal?) announced Harmony that future releases of iPod software, hardware, and firmware might break harmony and that was Real’s problem to solve for its own customers, not Apple’s. As well it should be.

  17. I love my ipod. But I think this guy has a point!

    (The site has articles that say good stuff about iPods, so he isn’t just some anti-ipod jerk)

    Who is Apple to stop me from buying music from some one who wanted to support the ipod!!!

    I know we would all call Gates the great satan if all the sudden iTunes didn’t run on Windows.

    Now I am being forced to buy music at iTunes. Maybe I don’t want to buy a whole CD or steal music. So what choice do I have, none!!!!

    I have seen people cry because people don’t port stuff to the Mac. Why the heck would Real or Microsoft offer their stuff on Mac when users sound like kool-aid drinking drones that will cheer Apple even when they take stuff from us, like choice!!!

    Its enough to make me hope someone builds something as good as the iPod so I can get out from under Apple’s thumb.

    I was thinking about buying a Mac, because I liked my ipod so much. I am not ready to become a drone for any company Apple or Microsoft.

  18. Yeah Russell, Microsoft SHOULD block Windows computers from working with anyone else’s products AT ALL.

    That’ll finish them off once and for all.

    “down” – not really, even if it is going dark at 4pm.

  19. The true issue is whether there is misuse of monopoly power. Monopolies are completely legal in the U.S. and most of the world. Misuse of the power of the monopoly is not. One misuse it the use of the monopoly power to create a commanding market share or monopoly in another area in which the company does not currently have a monopoly. Another misuse is using the current monopoly power to create circumstances which unjustly maintain that original monopoly.

    In the first misuse listed above, Microsoft was convicted of using its monopoly power to create a commanding market share in another segment. Microsoft had a 90+% market share of ALL desktop operating systems. This was not a 90+% market share of just Intel based computer operating systems. This was not a 90+% market share of just AMD based computer operating systems. This was not a 90+% market share of ANY single segement of the desktop computer operating system market. Microsoft was declared as having a 90+% market share of ALL desktop computer operating systems. Thus it was declared a monopoly. Microsoft was then convicted of using this monopoly power to illegally create a commanding market share in a very different segment of the market: the browser market. The appeals court upheld this conviction.

    Note that Microsoft was not convicted or even tried for the second type of misuse. Microsoft was not pursued for trying to maintain its 90+% share of ALL desktop computer operating systems. There have been many stories over the years of how Microsoft has changed MS-DOS and Windows to make it not work with other operating systems. None of these allegations have even been found to have enough merit to have charges filed, let alone go to trial.

    In a similar vein…
    Apple does not have a 90+% market share of ALL portable music players. Some sources put Apple’s market share at above 90% for just the portable, hard drive based, digital music players. Apple has no standing at all in Flash Memory based players. Apple has no standing at all in CD based portable players. Apple has no standing at all in tape based portable players. Clearly Apple does not have a monopoly in the arena of ALL portable music players.

    Thus Apple has no monopoly power to misuse. Any suit based upon Apple misusing its “power” would be thrown out as baseless. Period.

  20. Russell, have you ever called MS to request help with a Mac? Ummm…they don’t support it. Windows Server has a Mac component, but it’s geared toward Mac OS 9 and earlier, from what I’ve been able to tell. Including that was MS’s decision, not Apple’s. There are an awful lot of people on this site who use their Macs completely independent of anything Windows, so Apple isn’t “leeching off them,” and MS isn’t responsible for keeping those Macs running. If MS wants to change their system to lock out Macs, that’s up to them. You’d probably be surprised at the number of people who would NOT be affected.

  21. Mad and Sad… (or was that Sad and Mad… or not really relevant),

    “Now I am being forced to buy music at iTunes. Maybe I don’t want to buy a whole CD or steal music. So what choice do I have, none!!!!”

    The last time I checked my credit card bill, iTunes never forced you to buy a whole CD… or steal music.

    Steal music? Just curious… how does a person obtain the ability to jusify in a public forum the “stealing” of someone else’s property that isn’t rightfully theirs. I guess that their momma must have raised them with different ethics than mine raised me… but who’s to judge?

  22. This gets dumber every time I hear it. You can listen to Real on the iPod in a simple step…burn the Real music to a cd and import it into itunes. Done, no hacks, full functionality provided by Apple, and perfectly legal.

  23. If you create a spreadsheet software application that works on MS Windows XP and competes with MS Excel, and then it no longer works on XP SP2, under what conditions can you sue Microsoft for breaking your spreadsheet application?

    If you create a keyboard/mouse (hardware) accessory that works with a PC running Windows XP and competes with MS’ own keyboard/mouse solution, and then it no works under XP SP2, under what conditions can you sue MS for breaking your keyboard accessory?

    Note that MS licenses tools and encourages you to create XP apps and accessories.

    Now, if you create a DRM music format that works with an Apple iPod and competes with Apple’s own iTunes Store, and then it no longer works, under what conditions can you sue Apple for breaking your format?
    Note that Apple does not license tools or encourage you to create music formats for use with an iPod, although it does encourage you to create accessories using the iPod dock.

  24. SizeWell,

    I never said iTunes made me buy the whole CD. But I currently have two legal ways to buy most of the music I like. Buy a whole CD at a store or buying the songs I like from iTunes if they have them.

    I like having choices. I usually drink Coke, but if Coke bought the only store in my town and took all the Pepsi off the shelvs, I think I am hurt.

  25. The ethics of the situation is quite different from the legalities of the situation.

    Apple came out with the iPod photo. Very likely this required the rewrite of some of the algorithms within the firmware of the iPods.

    The only sensible thing to do is to keep the code base for the iPods as consistent as possible. Having many different code bases for the iPods would be a support nightmare for Apple and an unjustifiable expense. Thus releasing a firmware update to bring as many iPods in line with the current code base is the only logical option.

    Did changing the firmware to enable the iPod photo variants break the ability of “Harmony” to work with the iPod? If so, then Real and those who used “Harmony” have no legal or ethical basis for their complaints. Apple never promised to make sure any update would work with Harmony. In fact, within days of the announcement of Harmony, Apple warned people that future updates to the iPod and iTunes firmware and software may make their songs purchased and to be used with Harmony unusable with an iPod.

    If this is the scanario then… users were warned, Apple updated to implement a new feature, and the new feature broke a “hack” (as Apple viewed it).

    Another possibility is Apple’s commitment to the music labels for a strong Digital Rights Management (DRM) methodology. In order to keep that commitment Apple may have to strengthen the algorithms and/or methods used to enforce DRM on their iTunes site and their iPod music players. Individuals are always developing new techniques to break security methods. The only way to keep a strong DRM system is to keep updating it with the newest algorithms.

    Did Apple do a “security update” to the iTunes and iPod Fair Play software and firmware to strengthen it? Was the breaking of the Harmony “hack” (as Apple views it) just an unfortunate byproduct of this upgrade to the security of the DRM implementations?

    Again, if this is true then Real and the persons who have used Harmony have no legal or ethical basis for complaint about Apple’s actions.

    However…
    Did Apple specifically make changes to the firmware to break Harmony? Did the changes have absolutely no other purpose? If this were the case then Apple may have crossed the line ethically.

    Which scenario was it? Did Apple’s iPod photo update break Harmony or did Apple specifically target Harmony?

    Odds are we will never know.

    Until it is known beyond a reasonable doubt all we have is our personal opinions of the ethics of Apple Computer.

  26. Sad and Mad,

    Sizewell was a bit hasty in criticizing you, because he misunderstood what you meant by having to use iTunes if you want to buy an individual song, and didn’t quite address the issue that you raised.

    I agree with you that the more choices available to the user, the better it is for everyone. However, in this case I think Apple made the correct decision. Apple has kept very high standards in regards to the quality and usability of its products. Apple should not allow other companies to compromise this standard for excellence.

    Apple has shown that it is willing to make deals with other companies as long as their standards are met and everyone benefits. I think this will eventually happen when other companies have something to offer that enhances the user experience with the iPod, just like other companies are able to write software for OS X.

    Right now the overwhelming majority of music is still purchased through regular CDs and the iTunes Music Store has more songs than any other music store. Once online music stores start taking a significant portion away from CD sales, then I would suspect Apple to open up the iPod more. At the moment, it has no need to do this. When the time comes for this to happen, Apple will make a deal with the other companies to ensure standards and specifications are met. It’s just a matter of time.

    In the mean time, please do not let this temporary issue diminish your interest in purchasing a Mac.

  27. I believe Apple is doing the right thing business-wise on this. Even though the iPod has a commanding market share for HD-based digital music players, the market is not even close to mature right now. Moreover, sales of music via legal download is still a very small percentage of the market. Increasing quickly, to be certain, but Apple needs to maintain the advantage that the iPod gives iTMS.

    This also encourages companies to distribute through iTMS. Although iTMS has the largest number of songs available, about half of the music that I want isn’t there, so there is plenty of room for expansion. There are a lot of independent labels that should eventually make their way to iTMS distribution.

    Someday, it will indeed benefit consumers for Apple to open the iPod, but right now there doesn’t seem to be much consumer disadvantage from not being able to use Real or Walmart or whatever. Some inconvenience? Yes. But there are many other legal avenues to get music onto an iPod (rip any CD or encode any analog) that any song can still make it onto an iPod, so consumers So until the vast majority of music is sold via download, limiting compatibilty to iTMS hardly seems monopolistic.

  28. I’m really confused….

    Assume that I (Apple) built an eletronic lock (DRM) to be used to protect your personal assets (artists and record companies) and accesss was intended to be used by only authorized individuals (iTunes/iPod users). Further, I had assured you that no one else would be able to break the code without the proper authorization. Subsequently, without my approval, someone else (RealNetworks) comes along and finds a way (Harmony) to use MY lock in a way that I had never intended, designed, or promised to MY clients to protect THEIR client’s assets (without any promise made by me). Also assume that I was never offered or received any compensation for my efforts and investment in developing the lock or it’s supporting infrastructure.

    Why would it be improper or unethical for me to modify my algorithm to fulfill my promise to my client? Especially, as long as it didn’t have any impact on my client or the individuals that had been properly authorized to use the protected assests.

  29. I’m sorry but I still don’t understand you point… when and if you bought an iPod, you knew what choices you had. Apple never promised you that you wouldn’t have to buy a CD at a brick and mortar store nor did they promise that you would be able to purchase from any online store and be able to play the music (other than those that they said their player supports).

    How is your situation different from the situation before you purchased your iPod… other than having the additional choice of purchasing music at the iTMS?

  30. Let me tell you a little story….

    I am from the States but currently live in Denmark. I bought an XBox while living in Denmark to pass some of my limited extra time. Due to the rapid decline in the value of the US dollar, XBox games have become VERY expensive here (not they weren’t to begin with). As a result, I have several games (ALL LEGALLY PURCHASED) which are not compatible with Microsoft’s original intention but are certainly less expensive. There is an organization which has developed a scheme (similar analogy to RealNetworks) which allows me to play both PAL and NTSC games and watch DVDs which were not intended to be played on the XBox which was purchased Denmark. This organization also has never made the claim that their system would allow me this ability forever. If and when the day comes that Microsoft determines a method of preventing me from playing/watching, both Microsoft and the organization will be the last people that I will claim played unfairly and whine about.

    Keep in mind, everything that I’ve spoken about above, I’ve purchased. I only expect the parties to live and support their stated claims and promises…. no more… no less.

  31. sad & mad

    You are absolutely correct. Harmony has not changed my situation one bit, and unless the record companies decide to change their stance if they think that current DRM’s are able to be manipulated, then millions of iPod users are likewise unaffected. We have the choice to use iTunes, and if someone else in some other country decides to use Real or something else, that has no impact on those that choose iTunes. The matter really doesn’t concern us.

    However, Apple has the right to act in its best interests. Clearly Apple feels that eliminating Real is better than ignoring them. In all actuality, I don’t think Apple even needed to acknowledge Real’s existence since obviously very few actaully use it. This action affects very few people, the people that use Real software.

    This isn’t about Apple eliminating choice. It’s about Apple preventing future iPod users from believing that they can use unauthorized software. In a couple years from now, if iTMS is still the only music store compatible with the iPod and there are other competitive players in the online music field that have something to offer, then we should all complain about Apple’s closed system. However, I don’t think that will happen. Apple will allow other services to work with the iPod, but only through agreements with Apple.

  32. Let’s sue MicroSoft; they have engineered the entire system so my typewritter won’t work with Windows.

    Anyway, who wants to buy from anywhere else? Only want 1 song, huh? I guess if iTunes doesn’t have what you want, sure, but hey, there’s really nothing out there that I can’t wait for. If it isn’t on iTunes it will be eventually, or I can just buy a CD and then I have no issues what-so-ever.

    I guess I’ve learned that in this world, you end up driving yourself, and everyone else crazy, when you become impatient.

    Several posts have been on the money. Apple never promised Real that they would support them. Apple’s first responsibility is to their own product. Second, to the promises they made to the record companies to go along with the whole deal.

    I like Sizewell’s analogy with the lock. Seems to be on target to me.

  33. Amen, SizeWell! Finally, some sense has emerged.

    It makes me chuckle when people talk ethics, because it never occurred to them that is was unethical for Real to break into Apple’s DRM in the first place. Real didn’t have permission to do so- period. By doing so, Real forced Apple into a situation where what was promissed to the record labels was put into jeopardy, and as such Apple protected itself and it’s legal obligations with the labels. Apple had every right to break Harmony for those reasons alone. I don’t feel like my choice has been limited in any way- even if Harmony was available to Mac users.

    The widespread “choice” available to Windows users is one of the reasons why their platform sucks. With increased “choice” comes increased incompatability. Sometimes less “choice” is the best choice. Keep It Simple, Stupid.

  34. Sad and Mad:
    “I was thinking about buying a Mac, because I liked my ipod so much. I am not ready to become a drone for any company Apple or Microsoft.”

    Actually I don’t think the iTMS alternatives support the Mac platform, so your first arguement wouldn’t be with Apple.

    Real, Napster, and the others don’t care about the Mac platform so I’ll be happy when their music stores die a horrible death…

    Go Apple!

  35. This speaks volumes to REAL’s market share (or lack of it)! Hey, REAL, if you want to sell songs, come up with a realPod that only works with REALcrap music store and your market share will jump!!!

    This whole car analogy is flawed. When someone switches a stereo it’s to add features. REAL doesn’t offer anything better or additional.

    Plus the majority of everyone’s music comes from CD’s. I have 2400 songs on my iPod of which 3 are purchased from iTMS. THe rest I own the CD’s. I have another 1400 CD’s I haven’t even ripped in. THe newest music I have is purchased CD’s.

  36. Oh yes,
    I will sue the movie companies if DVDs with new copy protection do not work with MacTheRipper anymore!
    That’s like a burglar sueing a home owner for upgrading his alarm system.

  37. Sad and Mad >> I tunes did stop working on windows for a while, with the XP SP2 upgrade…

    anyways, if you want to buy your music cheaper somewhere else, so be it. But you certeinly would not instally a part in your car that was meant for another, or do it yourself and void the warranty.

    apple made an upgrade, and if Real wants to keep up, the also need to make an upgrade. if they really wanted to, i’m sure they could use the same tactics again � real that is…

  38. It amazes me that Apple has the first end-to-end solution to ease the worries of Recording companies. At the end of the day, Apple is the only company able to update it’s software and hardware as “hackers,” “crackers,” and bugs are discovered. Lets face it, there are a lot of smart people out there who want to crack Apples DRM solution who already have and will continue to. It’s the nature of technology and Apple is able to stay one step behind or ahead – depending on how you look at it.

    Just my opinion…I could be wrong.


  39. This writer’s analogy is seriously screwed up. How exactly is a radio essential to the running of a car? For the analogy to make sense, his argument should be that Ford should allow other ENGINES to run in their cars. Which is, of course, ridiculous.

    The hard drive is the “Engine” of the iPod.

    Is Real selling iPod hard-drives now?

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