Apple to cut, raise prices on some iTunes songs

Record companies will be allowed to pick from 3 tiers

By Jessica Mintz, Associated Press

Published January 6, 2009 at 12:14 p.m.
Updated January 6, 2009 at 11:54 p.m.

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Photo by Justin Sullivan / Getty Images

Schiller stands in for CEO Steve Jobs as he delivers the keynote address Tuesday at the MacWorld trade show in San Francisco. Apple has said it will not participate in the show after this year.

Photo by Ben Margot / Associated Press

Phil Schiller, senior vice president of worldwide product marketing for Apple Inc., announces the new 17-inch MacBook Pro laptop during his keynote address at the Macworld Conference and Expo on Tuesday in San Francisco.

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SAN FRANCISCO — Apple Inc. is cutting the price of some songs in its market-leading iTunes online store to as little as 69 cents and plans to make every track available without copy protection.

In Apple's final appearance at the Macworld trade show, Apple's top marketing executive, Philip Schiller, said Tuesday that iTunes song prices will come in three tiers: 69 cents, 99 cents and $1.29.

Record companies will choose the prices, which marks a significant change, because Apple previously made all songs sell for 99 cents.

Apple gave the record labels that flexibility on pricing as it got them to agree to sell all songs free of "digital rights management," or DRM, technology that limits people's ability to copy songs or move them to multiple computers. Apple had been offering a limited selection of songs without DRM, but by the end of this quarter, the company said, all 10 million songs in its library will be available that way.

While iTunes is the most popular digital music store, others have been faster to offer more songs without copy protection.

Amazon.com Inc. started selling DRM-free music downloads in 2007 and swayed all the major labels to sign on in less than a year.

Schiller also announced that iPhone 3G users will be able to buy songs from the iTunes store using the cellular data network.

Previously, iPhone users could shop for tunes when connected to a Wi-Fi hot spot.

The iTunes changes marked the highlights of Schiller's run as a stand-in for CEO Steve Jobs, who used to make Macworld the site for some of Apple's biggest product unveilings, such as the iPhone.

Apple said last month that Jobs would not address the throngs this time because the company plans to pull out of Macworld next year.

Schiller got a warm welcome from the attendees - who packed the convention hall despite the pall cast over the industry by the economic downturn - especially at the start of his talk, when he thanked them for showing up despite Jobs' notable absence. He ran seamlessly through his 90-minute presentation, getting applause and oohs from the audience, varying little from the format of slides and demos established by Jobs. And, like Jobs, he gushed about Apple's products being the best in the world.

"Phil did an exceptionally good job in representing Apple," said Tim Bajarin, president of technology analyst group Creative Strategies Inc.

Lower iTunes prices were Apple's only nod to the recession - and an oblique one at that, because record labels have been asking for years to set varying song prices. Rather than an inexpensive new Mac to lure budget-conscious buyers, Schiller unveiled a new $2,800 Macbook Pro laptop with a 17-inch screen and the sleek aluminum casing the company debuted with the super-thin Macbook Air.

He also unwrapped new versions of two software packages for Macs, including the iLife multimedia programs. For instance, iPhoto '09 can recognize faces and sort photos based on who's in them.

GarageBand '09 includes videotaped, interactive music lessons given by Sting and other musicians. Apple added more professional video-editing features to iMovie '09.

Apple's answer to Microsoft Corp.'s Office productivity suite, called iWork, also got a makeover, including zippy new ways to add animation between slides in the Keynote presentation software.

Apple also unveiled a "beta" test version of a Web site for sharing documents, iWork.com. Unlike Google Inc.'s online documents program, however, Apple's version does not allow people to edit documents in a Web browser.

Apple said the thin new 17-inch aluminum-cased Macbook Pro, which joins an existing 15-inch model, will start shipping at the end of January.

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