Report: Apple set to charge iPod accessory manufacturers 10% iPod port license fee

“Apple is set to slug partners a massive 10% licence fee for access to an iPod port. The move will significantly impact iPod accessory manufacturers with some considering dropping accessories from their portfolio,” David Richards reports for Smart House. “Among the companies set to be hit is Bose who make the highly successful Bose iPod docking station music system. Dominique Water the head of Bose’s Asia Pacific operations said ‘All Apple partners were told of the decision some weeks ago. This is a massive licence fee which will not sit comfortable with many partners. Bose is not happy as the proposed fee is excessive by any standards.'”

Richards reports, “Another Bose executive said ‘What we need is for the MP3 vendors running the Microsoft operating system to get together and deliver a common port accross all MP3 devices. We also need a common docking design so that people like Bose can develop common accesories. Currently Apple is the only one with a common port as a result accessory manufacturers are designing for the iPod Apple platform.'”

Full article here.
Note to Bose and all other makers of accessories utilizing Apple’s iPod port: Apple holds around 80% of the digital music player market. Bose and other designers are not designing iPod accessories because Apple has a common port, they are designing them because iPod massively dominates the market. Dose of reality: you’ll pay the 10% and you’ll do so with a smile. If not, have fun trying to make and sell accessories for also-ran players that are killing each other over Apple’s scraps.

Related articles:
Over 1,000 accessories now available for Apple iPod – September 07, 2005

90 Comments

  1. we’d all love to hear you try to make THAT connection in a logical way.

    Is it that they are both profit-based?

    Or is it that Apple DESIGNED the standard port connector, so it’s theirs to do what they like with?

    Apple’s new standard adapter with the nano will probably SAVE more than 10% for these companies.

  2. I think this is a huge mistake. This is only going to drive companies away from developing for the iPod, and that’s one of the things that makes the iPod so great, is that there is such a huge product universe around it. You can find accessories for just about anything you want to do with it. I really hope they rethink this decision.

  3. If they’re considering dropping their iPod products, they’re bad businessmen. iPod users buy accessories, and lots of ’em. I don’t believe the 2 percent (or whatever) who own the Creative players are buying up tons of accessories.
    All that’s going to happen is the price of new accessories will be a little higher to cover the 10 percent cost. Apple is just looking to create new revenue streams. It developed the market, and iPod accessory manufacturers weren’t going to get a free ride forever.

  4. What’s the problem with Apple taking a cut from the iPod accessory makers? Apple did things right and the others didn’t! There’s more than enough to go around. Besides, Bose overcharges SO MUCH for their products.

  5. I hope this reporter got his facts wrong. Apple doesn’t need to make a few extra bucks this way. Sounds too much like the “greedy” people Steve was talking about a while back. It’s bad press.

  6. Apple holds the license to the iPod and folks who profit from their name should pay. Apple pays 70 to 80 cents per track of that 99 cents to the record labels. Apparel companies pay the NFL, NBA, NCAA, NHL, et al huge licensing fees for use of the teams’ names and logos. It is no different here. Actually, 10% seems to be pretty reasonable considering that without the iPod, those businesses would be generating no income. Licensing is big business. It should be no different for Apple.

  7. I don’t like it. The dock connector is apple’s intellectual property and they have the legal right to do what they want with it, but 10% is excessive. I think most accesories will stay but some will leave, which is always bad for the comsumer. Apple is making plenty of ipod related revenue right now, and while any corporation always wants even more more money which they are already making more of than any time in history, I would hope that they won’t do this. It def hurts the consumer and could possibly backfire if enough accessories back out that it decreases that specific reason for buying an ipod.

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