Apple has advertised the iPod and iTunes brands in several very successful promoting campaigns. The first iPod advertisement, featuring the tagline “A thousand songs, in your pocket” was launched in November 2001. The ad can be viewed on Apple’s web site. In April 2003, Apple stated its new advertisement campaign to promote the new product – a line of the iTunes Music Store. The advertisement campaign was rather successful and gave some profit. The commercials featured a wide range of music, including The Who’s My Generation, Sir Mix-a-lot’s Baby Got Back, The Caesars’ Jerk It Out, Pink’s There You Go, and Eminem’s Lose Yourself.
In October 2003, Apple company showed its first TV advertisement of this silhouette campaign, which had already been presented in periodicals. It showed silhouettes dancing to music and listening to iPods. These advertisements promoted pop songs such as The Vines’ Ride, The Caesars’ Jerk It Out, Gorillaz’ Feel Good Inc., Steriogram’s Walkie-Talkie Man, Jet’s Are You Gonna Be My Girl, Propellerheads’ Take California, Ozomatli’s Saturday Night, Jason Nevin’s Mix, Franz Ferdinand’s Take Me Out, Daft Punk’s Technologic, and many more. To commemorate the launch of the U2 iPod, Apple released an ad featuring a music video of Vertigo, featuring the band as characteristic iPod silhouettes. One can see these Ads in quite a few places now.
The iPod shuffle was released alongside TV advertisements featuring silhouettes dancing on a green background with Apple’s shuffle symbol moving under them, displaying their intention on using their silhouette campaign with each of their products. At the release of the iPod nano, a commercial was aired depicting pairs of hands turning over and examining the device, emphasizing its small size, and fighting over it.
With the release of video iPod, a new commercial was aired showing the new iPod’s video playing capabilities. The ad featured U2’s Original of the Species from the Vertigo: Live From Chicago DVD. Two more ads were released featuring Eminem and Wynton Marsalis. Although the ad still featured the silhouettes, the backgrounds were more textured and had patterns or identifiable backgrounds as opposed to the flat colours used previously. An orange ‘urban’ theme was used in the Eminem version, and a ‘cool’ blue jazz look to the Wynton Marsalis variant.
On March 17, 2006, Apple released another new iPod ad. This ad departed from the traditional silhouette style, and featured thousands of CD covers pouring into an iPod nano. The ad again uses the tagline “1,000 Songs in Your Pocket”, in reference to the original iPod launch ads. This commercial features the song Cubicle by the French electro rock band Rinocerose.
The Company’s future work and success depends on the work of distributors and other resellers of the Apple’s products. The Company has invested and will continue to invest in various programs to enhance reseller sales, including staffing selected resellers’ stores with Company employees and contractors. These programs could require a substantial investment from the Company, while providing no assurance of return or incremental revenue to offset this investment.
Over the past several years, an increasing proportion of the Company’s net sales have been made by the Company directly to end-users through its online stores around the world and through its retail stores in the U.S., Canada, Japan, and the U.K. Several resellers perceived the expansion of the Company’s direct sales as conflicting with their own businesses and economic interests as distributors and resellers of the Company’s products. Perception of such a conflict could discourage the Company’s resellers from investing additional resources in the distribution and sale of the Company’s products or lead them to limit or cease distribution of the Company’s products. The Company’s business and financial results could be adversely affected if expansion of its direct sales to end-users causes some or all of its resellers to cease or limit distribution of the Company’s products.
The Company relies on third-party digital content, which may not be available to the Company on commercially reasonable terms or at all. The Company contracts with third parties to offer their digital content to customers through the Company’s iTunes Music Store. The Company pays substantial fees to obtain the rights to offer to its customers this third-party digital content. The Company’s licensing arrangements with these third-party content providers are short-term in nature and do not guarantee the future renewal of these arrangements at commercially reasonable terms, if at all.
Third-party content providers and artists require that the Company provide certain digital rights management solutions and other security mechanisms. If the requirements from content providers or artists change, then the Company may be required to further develop or license technology to address such new rights and requirements. There is no assurance that the Company will be able to develop or license such solutions at a reasonable cost and in a timely manner, if at all, which could have a materially adverse effect on the Company’s operating results and financial position.
