Universal Music Group is reported not to be renewing its annual contract to sell its music through Apple's iTunes.

The New York Times quoted unnamed executives as saying that Universal had decided to have monthly deals instead.
That would allow Universal to remove songs by some or all of its artists quickly if there are disagreements on terms and pricing in the future.
But the San Francisco Chronicle carried a denial from Apple, which said that talks were still continuing.
"We are still negotiating with Universal," the newspaper quoted an Apple spokesman as saying.
"Their music is still on iTunes and their not re-signing is just not true," he added.

Flat charges
There have been disagreements between Apple and record labels in the past about the pricing and protection of the songs on iTunes.
Apple has stuck to a flat charge of 99 cents per song in the US since iTunes was launched four years ago.
But many of the labels are understood to want to be able to charge more for popular songs and less for songs that they are trying to promote.
There have also been objections to the copy-protection that iTunes uses, which means that iTunes downloads cannot be played on MP3 players other than Apple's iPod.
In February, Apple boss Steve Jobs called on labels to allow iTunes to remove the copy-protection. EMI has since begun to sell "premium" versions of its tracks through iTunes without copy protection.
But some labels have refused to have the protection removed and say that Apple should instead license its technology so that its copy-protected songs can be played on other devices.

Shares fall
Both Apple and Universal have much at stake if their relationship deteriorates.
If Universal pulls its catalogue from iTunes then the store would lose access to record labels that account for one out of every three new releases sold in the US, according to Nielsen SoundScan.
On the other hand, iTunes is by far the most popular download store, with a 70% market share, according to the NPD Group.
Reports of a dispute hit Apple shares on Monday - they closed down 78 cents at $121.26 on Nasdaq, although that was also linked to some disappointment about the first weekend's sales of its new iPhone.

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(via CNN)
Of 11 iPhone owners contacted, nine reported little or no trouble setting up their handsets.

SAN FRANCISCO (Reuters) -- Proud owners of Apple Inc.'s iPhone raved about their first day with the device Saturday, but a glitch took the shine off the year's most anticipated device for a few unlucky customers.
Of 11 iPhone owners contacted by Reuters Saturday, nine reported little or no trouble setting up their handsets, a combined cell phone, music player and Web browser.
An iPhone buyer proudly displays his loot Friday at an Apple store in New York.

"It's awesome, it's the best thing I ever saw in my life," said New York private detective Jerry Gregory. "Once people see this phone they are going to want one. Everybody I show this phone wants one, even people who were anti-iPhone."
But Brad Bargman of Ft. Lauderdale, Florida, who waited in line nine hours Friday to buy his phone, said excitement turned to dismay when the device stubbornly refused to activate, meaning it can't be used.
"It's a real buzz kill," said Bargman, adding that repeated calls to AT&T failed to get the device to work. "Now I'm soured on it a little bit."

David Clayman, the third person in line at Apple's flagship Manhattan store, said he was still unable to activate his iPhone a day later, probably because he couldn't update the software on his computer needed to start the process.
The iPhone, which costs $500 or $600 depending on memory capacity, is activated through a process handled by the phone's exclusive carrier for two years, in Apple's iTunes online music store.
In a sign of strong initial demand, AT&T said it had sold almost all its phones within hours of the device going on sale at its 1,800 stores. The company did not say how many units it had sold. (For a quick estimate of first-day sales, click here).
Asked about problems some buyers were having, AT&T spokesman Mark Siegel said the "vast majority" of customers were able to use their phones within minutes. "There are some whose activation process is being delayed and that's something that can happen in a launch like this and we're resolving those on a case-by-case basis," Siegel said.
Apple spokeswoman Jennifer Bowcock declined to comment on the number of iPhones sold at its outlets, saying only: "So far we've seen a lot of excitement and buzz."
Apple aims to sell 10 million units in 2008, giving it 1 percent of the global mobile phone market. The company is banking that the iPhone will become its third pillar product alongside its popular iPod music players and Mac computers.
By mid-afternoon on Saturday, Apple's store in downtown San Francisco was crowded with shoppers interested in the iPhone display. The store was sold out of the $600 models and about 10 $500 models were visible on shelves.
Indeed, the iPhone's inclusion of so many features into a sleek package triggered a sort of nerd rapture among enthralled gadget freaks.
"It's not like it's a computer, it's not like it's a phone, it's like a living sculpture in my hands," said Dale Larson, a mobile business consultant in San Francisco.
Buyers cited the large screen, full-blown Internet browser, ability to play music and video, and camera quality as among the phone's best features.
Two of the top concerns raised prior to the phone's launch - the on-screen keyboard and quality of AT&T's network - were annoying to some people, but no one said they regretted buying the device.
"At first I tried to use my thumbs to type but it didn't work so well. But if I use my finger it's okay," said software developer Tim Brown.

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Add YouTube to the new Apple iPhone’s list of promised goodies.
California-based Apple said yesterday iPhone buyers will be able to stream videos from Google’s YouTube wirelessly.
It’s yet another feature being tacked on as Apple prepares to launch one of the most-talked-about devices in years.
At first, about 10,000 YouTube videos will be available in the high-quality format used by the iPhone. The rest will be available by fall.
The anticipation has been building for months around the launch of the iPhone on June 29.
And, in the end, all that hype might come back to bite Apple as the hoopla leads to unreasonable expectations, said Christopher Hazelton, senior analyst at Framingham-based research firm IDC.

“It’s gotten to the point where it’s such a big phenomenon, it’s such a household name, it’s almost out of control,” he said.
The question remains whether Apple can turn that buzz into big sales - the kind its music player the iPod has been able to rake in.
The iPhone will carry a high price tag, running between $500 and $600.
But Apple is hoping to sell 10 million iPhones in 2008. “That would be quite unprecedented,” said John Jackson, an analyst with Boston-based the Yankee Group.
And the iPhone faces some major hurdles. Its high cost coupled with the price of dropping another cell phone plan to sign up for the iPhone, which can average around $175, might keep many consumers away, analysts said.
Consumers need to take a step back and consider other options that might better suit them, said Bill Nebes, chief executive of IMO Independent Mobile. “It’s sort of like cars you get excited about. You want to buy it, but you don’t think about how it’s going to drive in the snow,” he said. Nebes said other, cheaper alternatives might work better for certain features. The Ocean from Helio, for instance, is good for instant messaging and the Sprint Upstage M620 has a music player while costing less than the iPhone.
But already the iPhone is causing a stir in the mobile industry as more cell phone makers are adopting similar touch screens, Hazelton said. Also, unlike other manufacturers who depend on cell-phone carriers to market and distribute their products, Apple has largely taken control of its launch in spite of its five-year deal with AT&T, Jackson said. Other manufacturers might take a closer look at that business model, he added.

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SAN JOSE: Apple Inc will have plenty of room to eventually reduce the retail price of its upcoming iPhone, according to preliminary gross margin estimates by a market research company.

The iPhone, the combination cell phone-iPod media player that Apple unveiled last week, will yield gross margins of more than 50 percent at the current set of retail prices, iSuppli Corp. said in an analysis of presumed component and manufacturing costs.

The 4-gigabyte version of the iPhone, with a retail price of $499, will cost Apple $245.83 to make, iSuppli estimated. The 8-gigabyte version, priced at $599, will cost Apple $280.83.

"With a 50 percent gross margin, Apple is setting itself up for aggressive price declines going forward," said Jagdish Rebello, a director and principal analyst with iSuppli.

An Apple spokeswoman declined to comment.

Since Apple will face stiff competition in the cell phone market, the company may need to cut into its margins to reduce pricing in the future, he said.

The Apple iPhone, which was announced by CEO Steve Jobs last week, will be available starting in June exclusively through AT&T's Cingular Wireless. Apple has said it hopes to sell 10 million units in 2008, or about 1 percent of the market.

That goal "seems attainable," Rebello said.

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