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As Apple iPhone 5 buzz builds, focus shifts to content

How about that old iphone? As a boy checks an iPhone at an Apple booth at an electronic store in Tokyo, Apple’s expected announcement today of a new iPhone means millions more will join about 244 million iPhones sold since the first one launched in 2007. For those planning to trade up, a company called Gazelle is making offers for old ones. Here’s one example: A 32-gigabyte iPhone 4S on Verizon Wireless was recently going for $237 if it’s in good condition.

Associated Press

How about that old iphone? As a boy checks an iPhone at an Apple booth at an electronic store in Tokyo, Apple’s expected announcement today of a new iPhone means millions more will join about 244 million iPhones sold since the first one launched in 2007. For those planning to trade up, a company called Gazelle is making offers for old ones. Here’s one example: A 32-gigabyte iPhone 4S on Verizon Wireless was recently going for $237 if it’s in good condition.

The blogosphere crackled Tuesday with talk of Apple's iPhone 5 launch today, the latest in a rush of high-tech product announcements. But lost amid the speculation about screen size and battery life is something more important to most consumers: What can you watch on it?

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The licensing deals that allow movies, books and music to stream into the latest mobile devices, while long at the heart of their appeal, are becoming even more critical as several of the biggest technology companies fight for an edge in the lucrative market for smartphones and tablets.

As mobile devices increasingly resemble one another in look and performance, some analysts see a coming inflection point in which beleaguered media companies profit while high-tech manufacturers vie for the best access to old-fashioned stories, songs and shows.

"The platform increasingly becomes a commodity, and the content increasingly becomes the only place to create a premium," said Andrew Heyward, a former head of CBS News, now a consultant on digital media strategy.

In pitching Amazon.com's new line of Kindle Fire tablets last week, company founder and chief executive Jeff Bezos portrayed them as an advance over Apple's popular iPads because of their cheaper price and the extensive content they could deliver, pointedly noting that the Kindle library has 180,000 exclusive books to download. He also highlighted last week's multiyear deal with Epix, a movie consortium of Paramount, MGM and Lionsgate, giving it exclusive rights to stream such hits as The Avengers and Iron Man 2.

"We want to make money when people use our devices, not when they buy our devices," Bezos said. "If somebody buys one of our devices and puts it in a desk drawer and never uses it, we don't deserve to make any money."

The late Steve Jobs, Apple's founder, was a leader in linking devices and content through the iTunes store, the result of a deal between Apple and five major record labels that gave the iPod player a dominant position in the music player market for years. The App Store was equally key to the success of several generations of iPhones.

These business triumphs helped popularize a digital-age mantra — "content is king" — but the biggest profits went to those who made high-tech devices. Those companies that actually produced the words, video and music enjoyed by consumers, meanwhile, saw their business models undermined and their traditional retail partners — including Borders, Tower Records and Blockbuster — go bankrupt.

Many see the balance between content producers and device makers shifting as competition for consumer dollars intensifies.

Five years ago, Apple dominated digital music through the iPod and iTunes store, just as Amazon dominated e-books through its Kindle reader and related store. Now, Apple sells books through its iPods, iPhones and iPads, and Amazon streams music through its more advanced Kindle devices. Both companies' products stream video.

Google, once mainly a search business, has forced its way into the mobile device market with its own tablet and the Android operating system, which powers a majority of the world's smartphones and many tablets made by other manufacturers. Microsoft, once mainly a provider of computer operating systems and software, has likewise introduced a tablet computer and a smartphone operating system.

With all these players, some analysts say, the mobile devices themselves will be increasingly difficult for consumers to tell apart. Some will continue to gravitate toward Apple's traditional edge in design and ease of use, but differences in performance and price will narrow.

That, analysts say, will lead to a second wave of competition in which the competition becomes about content.

What's less clear, technology analyst Whit Andrews of Gartner Research says, is whether an overall shift of profits toward companies that create content will benefit traditional media companies or their newer rivals.

"Content is always king, but it is never as good to be king as it looks like," Andrews said. "Because there's always a bunch of kings."

Foxconn denies allegations on interns

Foxconn Technology Group is denying reports in the Chinese media that it forced vocational students to work at factories that make iPhones. The controversy targeting Apple's manufacturing partner in China comes as Apple is expected to unveil the latest iPhone today. Frequent Foxconn critic Li Qiang of China Labor Watch said the interns are typically 16 to 19 years old and earn about $285 a month, the same as other workers. Some don't object to the work, but others feel coerced because they are told by their schools that they can't get the credits they need to graduate unless they do the internships, Li said. An Apple spokesman declined to comment on the allegations but said Apple's code of conduct requires that suppliers follow local labor laws when dealing with interns and other workers.

Los Angeles Times

As Apple iPhone 5 buzz builds, focus shifts to content 09/11/12 [Last modified: Tuesday, September 11, 2012 10:04pm]
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