Wal-Mart loses ‘philosophical argument’ with Apple CEO Steve Jobs, gains top-selling iPod

“Wal-Mart Stores Inc. said its sales on Saturday were slightly weaker than those posted during the post-Thanksgiving ‘Black Friday’ kickoff to the holiday season,” James Covert reports for Dow Jones. “Sales on Saturday were ‘OK,’ but saw ‘a slight drop in the slope’ from Friday’s levels, Wal-Mart Senior Vice President and Treasurer Jay Fitzsimmons told investors Tuesday at a conference hosted by J.P. Morgan & Co. that was made available by Webcast. But the day-over-day decline partly reflected the fact that last year’s Black Friday was disappointing, Fitzsimmons said. Sales for this year’s post-Thanksgiving weekend overall were better than in 2004, he said.”

“He noted that Apple Computer Inc.’s iPod digital music players were among the items conspicuously absent from Wal-Mart’s shelves last year. The reason was that Wal-Mart was in a ‘philosophical argument’ with Apple Chief Executive Steve Jobs over whether the iPod player should play music from more varied sources, Fitzsimmons said,” Covert reports. “‘He won, we lost. Now we have Nanos in the stores,’ Fitzsimmons said, referring to the latest, smallest version of the iPod.”

Full article here.

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The “philosophical argument” goes like this: iPods can’t play music from our Windows-only-Mac-users-be-damned Wal-Mart online music store, so we’re not going to sell iPods. We’ll sell other brands. Result? Wal-Mart didn’t sell much of anything. Virtually nobody bought the also-ran players and since virtually everybody with a portable music player owned an iPod, nobody bought from Wal-Mart’s – or any other outfits’ – ghettoized online music stores. So, rather than continuing to leave money on the table on both hardware and content, Wal-Mart revised their “philosophy” (back to the familiar “make money hand over fist” mantra) and decided they’d damn well better carry Apple iPods even if their own online music store doesn’t sell iPod-compatible music files. Apple’s iTunes Music Store, of course, sells iPod-compatible music and serves both Mac and Windows users, which is why it dominates the market so effectively.

44 Comments

  1. Too bad Wal-Mart didn’t win that one. It’s frustrating when you find an online album that you want to download but can’t because Apple won’t license FairPlay. iTMS may have the largest catalog, but it doesn’t have everything.

  2. Here is a real solution, apple allows walmart to contract through them similar to the eduction. Walmart gets 5 cents a song, and the number one retailer joins with the number one music etailer.

    2nd step profit

    There is no third step.

  3. If you want an album that isn’t on iTunes why not buy the CD? It sounds a lot better, you have a hard copy, and you get all the pretty artwork.

    PS monalisa why would you use the mp3 format when AAC is avalible in iTunes. If anything needs to die it’s the old mp3 compression.

  4. Speaking of iPods and Walmart…

    I was in my local Walmart over the weekend, and noticed the nice big iPod display case in their electronics section, with the iPod name on top, and the classic silhouetted dancer theming on the backdrop. But wait, what’s that inside the case clearly marked “iPod”? One lonely Shuffle, and five Creative Zen players!!! I fired off an e-mail to Apple; hopefully, they’ll “educate” this Walmart.

  5. “Or buy the physical CD and rip it to iPod.”

    Unless, of course, the CD is the Sony XCP copy-priotected type…

    (Note: Like many here, I’m boycotting Sony products right now with the exception of Sony BMG music…and even then, I won’t buy it from any other source except iTMS.)

  6. Jobs should have had a “philosophical argument” with Wal-Mart about the crappy way they treat their customers. Apple doesn’t need to partner with a company whose employee healthcare plan is called “Medicaid.”

  7. “Too bad Wal-Mart didn’t win that one. It’s frustrating when you find an online album that you want to download but can’t because Apple won’t license FairPlay. iTMS may have the largest catalog, but it doesn’t have everything.”

    Then burn and re-rip it, or better yet, buy the CD and rip that then. Apple won’t license FairPlay because there is no business sense in it for them to do so. Just as M$ won’t support Macs with their WMA DRM.

  8. hey Monalisa et al,

    i love it when you people go on about “rip it to CD then to MP3” BS. Have you guys actually done this? and would you keep doing this for ever fcking CD you bought on another online store?

    be real. i am no fan of M$. but isn’t it time for a standard DRM? and since iTunes has obviously won that war, isn’t it time Apple licensed that damn thing?

  9. …and what track/album did you find at Walmart that you couldn’t find at the itunes music store?

    Walmart is so main-stream, I can’t imagine that there are many

    Walmart doesn’t care about the other WMA music services only their own, and is not about to carry the water for them in this “you can’t play my music” red-herring of a discussion.

    Ergo, the end of their “philosophical argument” with Jobs. Money talks and the rest just walk…..

    Walmart doesn’t care about this nonsense, they just want to make money.

    At the end of the day, it wouldn’t surprise me if Walmart wasn’t the first non-Apple vendor that Jobs licenses the fairplay DRM to and “store fronts” the Walmart download site with itunes infrastructure.

    Then let’s see the RIAA and companies try to change price points on Apple *and* Walmart. Ho! Ho!

  10. Hey stupidme and some others:

    Why on earth would Apple license their DRM. It works on peecee’s and Mac’s for downloading music to iPods. It’s was designed and put together by Apple Computer….It’s theirs….

    Why doesn’t mafia$oft update their crapy software for the Mac….like WMP and IE with thier proprietary code so web site developers can make the site IE/Windows only…and then there are sites the need ActiveX….Macs don’t have ActiveX….but then again, why would any Mac user ever want to put something as badly designed as that, on their computer. I could go on, but you won’t get it. You all bitch about Apple having one thing that the raptor from redmond doesn’t have…you people bitch about this all the time…GET OVER IT AND GROW UP.

  11. Lstart with this…

    Even though I have spent over $500 on iTMS, I still prefer buying the phsyical CD when available. But guess what, sometimes I don’t want the entire CD, or it’s not yet available on CD, such as special remixes and unreleased songs.

    And how do you suggest I burn a protected Windows Media Player song to a CD without using Windows? In any case, isn’t Apple about making things easy for the user?

    And prut prut, I wasn’t trying to imply that the record companies are innocent, but I don’t feel the artist should be punished for something that for the time being may be out of their control. Sure you could say the artist should just ditch their existing contract, but that’s isn’t always a viable option.

    SJR, obviously your statement about whether licensing is good or bad business for Apple is purely conjectural, so I won’t bother to form a reply.

    caddisfly, I’m not talking about what’s at Wal-mart. There are many other places that sell songs.

  12. too bad/stupid me: I agree with your concern. Even though there are workarounds, it is a pain in the ass. Does anyone really want DRM? Fair enough complaint.

    However, I disagree with your thought that Apple has won the war. Downloads are around 5% of total music sold. I suspect that the iPod, while clearly the dominant player, is anywhere close to 25% saturation of what the digital music player market. Apple has won the opening set of battles, but at this point, if they let everything go on the iPod or let everyone use Fairplay, their lead couple easily be lost.

    When downloads are in the neighborhood of 30% + of downloads and the digital music player market is 50%+ saturated, then Apple can afford to let everyone else in.

  13. Macgravy,
    “Why on earth would Apple license their DRM. It works on peecee’s and Mac’s for downloading music to iPods.”
    – Um, you do know that there are many other reasons to license FairPlay than that, right?

    – Oh, and I love you’re whole “MS doesn’t do it so why should Apple” argument. It makes so much sense and it’s so convincing.

    – Oh, and how would it exactly hurt you if Apple licensed FairPlay?

  14. IMHO Apple is only one company in many that has its own solution to digital music download so if you don’t like their solution, Don’t support any part of it and then complain about the rest. As I said, there are other companies you can choose from.

    I for one supports Apple’s effort in every way.

  15. Hold On,
    “Apple has won the opening set of battles, but at this point, if they…let everyone use Fairplay, their lead couple easily be lost. “

    – I don’t see it that way. If anything, it would encourage iPod sales, and that’s where the money is. Sure, it might weaken iTMS sales, but I doubt it. iTMS is clearly the best solution, right? So what’s there to worry about? The people will choose with their pocketbooks right?

  16. Mac4life,
    So if I don’t like the visualizations in iTunes, I should just get rid of my iPod, iTunes software, and everything else by Apple? I think you’re missing one very important option, the one where you can use the good parts of the system and try to get Apple to improve the weak parts. Or do you suggest that Apple doesn’t ever need to improve their products at all and everything is perfect right from version 1?

  17. “I was in my local Walmart over the weekend, and noticed the nice big iPod display case in their electronics section, with the iPod name on top, and the classic silhouetted dancer theming on the backdrop. But wait, what’s that inside the case clearly marked “iPod”? One lonely Shuffle, and five Creative Zen players!!!”

    That wasn’t WalMart’s fault. Those Zen players were put there by people who picked them up by mistake, then put them down when they found the iPods.

  18. im pretty sure, “critic”, that customers cannot open a display case. After all, thats why its in a display case so the ipods wont be stolen easily. So your hypothesis doesnt make sense at all. if any thing, its igonorant wal mart employees who do this, not customers

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