Management Toolkit

Jobs spurns offer of iPod partnership

Ina Fried CNET News.com

Published: 23 Apr 2004 10:50 BST

Apple Computer chief executive Steve Jobs publicly dismissed on Thursday an overture from RealNetworks to open up the iPod, saying that such a move does not make business sense.

Speaking at Apple's annual shareholder meeting, Jobs said there would be both an initial and ongoing cost to allowing the iPod to work with other music services.

"To be honest, it's just not worth it," Jobs said, noting that RealNetworks has made a number of overtures to Apple and adding that Real's music service has been "less than successful."

Although some at the meeting questioned Apple's declining market share, Apple executives noted that the company has chosen not to compete in the low-end desktop PC market. One executive justified the move, noting that that the company chose instead to focus on the iPod, which has been highly profitable for the company and has a 40 percent to 50 percent unit share of the market.

Apple also defended the decision to close a Californian manufacturing plant, saying it was in shareholders' best interests.

"We could save the company over $3m per quarter by doing this," said Tim Cook, Apple's executive vice president of sales and operations.

Also at the meeting, Apple shareholders elected the company's slate of directors and ratified the company's choice of KPMG as auditor. The California Public Employees' Retirement System, an influential shareholder, had said earlier in the month that it would withhold votes for Apple's slate of directors, but Apple said about 82 percent of shareholders who voted prior to the meeting approved the management-backed slate.

Shareholders also voted down a union-backed proposal designed to put limits on executive pay. Apple management had opposed the measure.