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Despite Beating Estimates, Apple Shares Slide 9% on Revenue Fears

Authored by Mark Hefflinger on April 14, 2005 - 9:52am.
Cupertino, Calif. -- Shares of Apple fell more than 9% on Thursday, as investors reacted to concerns about the company's future revenue despite quarterly profits that blew away Wall Street expectations. In results released late Wednesday, the company credited robust sales of its iPod digital music player for net income of $290 million, or about $0.10 per share higher than the average Wall Street estimate, according to Thomson First Call. Revenue of $3.24 billion was up 70% from the year before, but Apple predicted only a slim increase, to $3.25 billion, for the current quarter. Some analysts have dismissed the sell-off as signs that investors have unrealistic expectations about the company's continued growth. Apple's stock fell $3.78 to close at $37.26.
tags: Apple | Shares Slide | Revenue Fears |

Report: U.S. MP3 Player Sales to Grow 35% This Year to 18.2 Million

Authored by Mark Hefflinger on April 14, 2005 - 9:49am.
New York -- Sales of digital music players in the U.S. are projected to climb 35% this year to 18.2 million units, according to a report from New York-based Jupiter Research. Sales are then expected to grow at a compound annual growth rate of over 10% through 2010, when the national installed base will reach 56.1 million units, up from 16.2 million last year. The firm said strong sales of players will soon lift the market for complementary products, like music download stores. "Historically, any new device or medium that reaches a U.S. household penetration of 15% to 20% creates a critical mass of customers for other products and services," said Jupiter vice president David Card. "MP3 players will hit that mark this year. This is good news for both digital download stores and subscription music services." While Apple "shows no signs of losing momentum" for iPod sales, said Jupiter research director Michael Gartenberg, and is predicted to dominate sales over the medium term, Jupiter expects flash-based player shipments to surpass hard drive-based models in 2007.
tags: Reports | Grow | U.S. MP3 Player Sales |

MPAA Settles Suit Against ESS Over Sales of DVD-Copying Chips

Authored by Mark Hefflinger on April 14, 2005 - 9:47am.
Fremont, Calif. -- ESS Technology, a maker of chips found in DVD players and recorders, digital cameras and other consumer electronics, announced on Thursday that it settled a lawsuit brought by the member studios of the Motion Picture Association of America (MPAA), over the use of ESS chips in devices that can illegally copy DVDs. The MPAA sued ESS last April, alleging that ESS chips had been sold to certain manufacturers who were not licensed by DVD patent holder members of the DVD Copy Control Association (DVD CCA), who in turn used them in devices that can illegally copy DVDs. A California federal court sided with the MPAA, and ordered an injunction against ESS to halt sales of its chips to unlicensed manufacturers. Under the terms of the settlement, ESS agreed to sell its DVD chips only to DVD CCA licensees, and also "will work cooperatively with the MPAA member companies in fighting piracy." "ESS totally supports the enforcement of all parties' valid intellectual property rights and is committed to being a leader in enabling content protection features," said ESS CEO Robert Blair. "We look forward to working with the motion picture industry in their worldwide enforcement efforts and in the development of next-generation anti-piracy technology."
tags: Law | MPAA | ESS | DVD-Copying Chips |

Satellite Radio Firm WorldSpace Files to Raise $100 Million in IPO

Authored by Mark Hefflinger on April 14, 2005 - 9:43am.
Washington -- WorldSpace, a provider of satellite radio services, has filed with the Securities and Exchange Commission to raise $100 million in an initial public offering (IPO). Details such as the number of shares and price range have yet to be determined. The company, which was an original shareholder of DC-based XM Satellite Radio before selling its stake in 1999, was founded in 1990 by Noah Samara, who pioneered the development of satellite-based digital radio service, commonly known as Digital Audio Radio Service (DARS). XM, which currently has about 3.8 million subscribers, is licensed to use and develop the company's technology. WorldSpace provides its satellite radio services to Asia, the Middle East, Western Europe and Africa, and is the only licensed DARS provider outside of North America, South Korea and Japan. The company plans to trade on the Nasdaq under the ticker symbol "WINR."
tags: VC | IPO | Satellite Radio | WorldSpace |

Activision Commissions Artists to Pen Original Songs for "Fantastic Four"

Authored by Mark Hefflinger on April 14, 2005 - 9:38am.
Santa Monica, Calif. -- Video game publisher Activision said on Thursday that it has recruited musicians to write and record original tracks specifically for each character in its upcoming "Fantastic Four" game, based on the Marvel comic book and upcoming 20th Century Fox film adaptation. The songs -- "Error Operator" by Taking Back Sunday, for Mr. Fantastic; "Clobberin' Time" by Jurassic 5, for The Thing; "I'm on Fire" by The Explosion, for The Human Torch; and "Everywhere" by Go Betty Go, for The Invisible Woman -- will debut in four character-specific game trailers. "Creating four unique character-driven songs and music video-like trailers is a whole new approach at integrating music into games," said Tim Riley, worldwide executive of music for Activision. "This project underscores our strategy to use artists that are aligned with the content and feel of our titles, further enhancing the overall sensory experience for players." The game will also feature the musical theme from the film, composed by John Ottman, in addition to a storyline conceived by Zak Penn, who co-wrote the story for "X2." Activision said Santa Monica, Calif.-based Seven Studios is developing the title for PlayStation 2, Xbox and GameCube, while the PC version is being created by Beenox Studios and the Game Boy Advance version by Torus Games.
tags: Music | Activision | Original Songs | Fantastic Four |

Report: Two-Thirds of U.S. Households Have Mobile Phones

Authored by Mark Hefflinger on April 14, 2005 - 9:36am.
Cambridge, Mass. -- Two-thirds of U.S. households have at least one mobile phone, according to a new survey of 5,600 household by Forrester Research. Single-phone households are currently a declining minority, while households with four or more have grown at a rate of 57% in the past year, the survey found. "The wireless market continues to defy predictions that it is approaching its saturation point," says Forrester Research principal analyst Charles Golvin. While consumers keep buying, however, they are apparently far from ecstatic with their mobile providers. "Despite carriers' focus on improving their networks and customer service, customer satisfaction has declined over the past three years and hovers around 50% in key categories like customer service and call dependability," said Gilvin. After currently planned consolidations, the top three mobile carriers will be in seven out of 10 mobile households: Cingular (28%), Verizon (27%) and Sprint/Nextel (15%), Forrester said.
tags: Reports | Mobile Phones | U.S. Households |

Digital Animation Studio CritterPix Lands $2.1 Million Bridge Note

Authored by Mark Hefflinger on April 14, 2005 - 9:33am.
San Rafael, Calif. -- CritterPix Studios, the 3D computer-generated animation studio behind the upcoming feature firm "Ollie the Otter," said on Wednesday that it has landed $2.1 million in convertible bridge note financing from the U.K.'s Laidlaw & Company. The studio now has raised a total of $4.45 million in seed funding, and plans to use the latest proceeds for script development as well as installing software animation tools and hardware platforms. "This funding gives us the flexibility to maintain our schedule for bringing our first movie… to the big screen," said Kelly Williamson, the CEO of CritterPix.
tags: Digital Animation Studio | CritterPix | Bridge Note |