Earlier this week, Apple and EMI broke some serious ground in the digital music industry by announcing DRM-free music across the entirety of EMI's catalog, beginning with the iTunes Store. In the conference call, Steve Jobs cited interoperability as a key reason for the move; songs downloaded from the iTunes Store can only be played on iTunes, the iPod and other Apple products, and the record labels EMI decided to do something about this handicap. Everyone, from consumers to the EU, have been asking for the abolishment of DRM, and reactions to Steve Jobs' Thoughts on Music essay (which more or less agreed with us) ran the gamut, from Cory Doctorow's shoot-from-the-hip-and-not-from-the-head call-out to general intrigue and interest in what could actually happen to an industry when one of its front-runners calls for change. Regardless of what was said, EMI has taken the first step into a world of selling legitimate digital music sans-DRM through the iTunes Store. The big question, however, is how truly interoperable iTunes will allow these new downloads will be.

iTunes Store songs are in the AAC file format, not MP3. While this arguably standard/non-standard file type is considered by some to be proprietary to Apple and/or the iTunes Store, this is entirely not the case. Plenty of other software and DAPs (Digital Audio Players) support the AAC format, even including, as John Gruber points out, Microsoft's own iPod competitor, the Zune. If these non-Apple products don't support AAC, they easily could with a software plugin or firmware upgrade.

More important, however, is the fact that the iTunes Store is still the world's most popular legitimate digital download store, and that popularity could skyrocket even farther once they unleash these much, much higher quality downloads (higher than any digital store I know of) in a legitimate, affordable and DRM-free download. The newfound interoperability that Apple is boasting for its present and soon-to-be customers could meet a roadblock, however, if the company doesn't build compatibility for non-iPod devices into the iTunes software itself. While customers can buy DRM-free AAC files through the iTS, iTunes is still the gateway for easily moving those files from one's computer to a DAP, and the claims of interoperability and unparalleled experience could crumble quickly as consumers plug in their Creative Zens, Microsoft Zunes and [insert non-iPod here], only to find out that iTunes scoffs at their non-Apple-branded device.

Will Apple support other DAPs in iTunes? Could we see a 'sync with TiVo' option in the preferences of a forthcoming iTunes 7.5? Time will only tell, but Apple and EMI just opened the doors on the issues of DRM and interoperability - we'll just have to see whether consumers who own something other than an iPod are actually invited to the party.

Thanks to everyone who entered the Xmod Giveaway! We only had one unit, which means only one winner. A big congratulations to Morgan-William in Brooklyn, who proved it is possible to leave a comment on a post-- and wind up with a cool Xmod from Creative. We're hoping to roll out some more giveaways throughout the year, so stay tuned!

I'm in love with the Creative Xmod. It's this little white box that hooks up to your computer by USB. And it turns your plain ordinary headphones into a virtual 5.1 surround sound system. I used it to watch my copy of Cars. I tell you, those race cars were racing around and through my head. That's how cool the virtual localization was.

The box works by creating virtual speakers that surround your ears. Yeah sure, your headphones only have two real speakers, but somehow the engineers at Creative have figured out how to localize sounds by using advanced digital signal processing that even takes the physics of your head and the shape of your ears into account. It wasn't exactly like being in a theater and really feeling the sound effects with your whole body, but it took the sound experience up to a whole new level of listening.

The XMod hooks right into your Mac via USB. It then grabs any audio playing through the system and runs it through its built-in filters. You hook up a pair of earphones or speakers to experience the effects. The virtual 3D surround sound works particularly well with both movie playback and gaming.

Creative, makers of lots of MP3 players and awesome soundcards in the 90s, just had their earnings call. Creative posted a loss of $21 million on sales of $241.4 million. The only good news that they had to share was of the settlement with Apple (you remember the one where Apple pays Creative $100 million for use of the 'Zen patent' and Creative gets to make 'Made for iPod' products). Creative seems to be pinning their hopes of making money next quarter on marketing their accessories to iPod owners.

Another interesting tidbit, Apple forked over the $100 million to Creative on October 6th, and thanks to "lower-than-expected tax rate" Creative got to keep $82 million of it.

I've noticed a couple reports from analyst firm Gartner Research that claim Apple's pricing on the new iPods betrays an increased interest in profit margins at the expense of market share. These reports focus on the iPod nano's pricing of $199/4GB and $249/8GB as being a bit high, given their estimated materials cost of $90 and $130, respectively. Admittedly, similar players from competitors such as Creative do beat out Apple in pricing; the ZEN V 4GB player is only $159.99 - but what rulebook dictates that a higher price on one particular member of a product family (by and far the most popular member) definitively means the company doesn't care about market share?

These reports don't seem to mention anything about the nano's big brother (unless MacNN and Playlist used some sneaky cut and pasting techniques), where Apple is competing quite well: they dropped their 30GB iPod price to match that of Creative's 30GB ZEN Vision:M ($249), and the 60GB ZEN Vision:M (if you can find it on their site), is reportedly $399 - a full $50 more expensive for 20GB of less storage.

Gartner's claim that competitors like Creative and Microsoft's new Zune could start chomping at the iPod's market share, based solely on the profit margins of one member of the family, also doesn't seem to take into account the value of the full package that Apple's iPod offers, such as seamless, 'it just works' integration with a leading digital media store (maybe Gatner simply forgot that the existence of Apple's margin-thin digital store leans fairly heavily on the popularity of the iPod).

While there are plenty of consumers out there to whom a $40 difference between an iPod nano and a ZEN V can (understandably) make or break a purchase, the are still other important factors consumers can evaluate for a DAP purchase. Unfortunately, some of these elements aren't capable of being factored into an analyst's equations, but Apple is clearly still banking on their weight with a consumer's dollar.

Remember all that talk of Creative beating Apple to the punch with patenting various elements of the iPod's UI? Today these talks came to an end, with Apple whipping out the checkbook, and Creative (I'm assuming) throwing a party. That's right: Apple has shelled out USD $100 million to Creative for "a paid-up license to use Creative's recently awarded patent in all Apple products." Fortunately, Apple might be able to get some of that cash back if Creative is successful in suing their way to profitability licensing their patents to anyone else.

There is yet another bright side for Apple, however: Creative has also hopped on board the 'Made for iPod' program, and has a slew of accessories on the way for everyone's favorite little DAP, such as speaker systems, headphones and a family of X-Fi 'audio enhancement products.'

Isn't it great when everyone can just get along and play nicely together - especially when $100m says so? Check out Apple's press release for the rest of the details on the settlement.

[via MacMinute]

For their 100th QuickTips email newsletter, Seattle area mac support agency CreativeTechs has published a handy little  troubleshooting guide that fits neatly in your shirt pocket. The "My Mac Won't Start!" pocketmod tiny guide is available as a free PDF download, and covers basic troubleshooting steps such as starting up in safe mode, single user mode, booting from an external device, and attempting to view the machine using target disk mode.

The QuickTips newsletter is something I've been subscribed to for a few months now, and it never fails to bring new insight into the way I use my Mac. Although aimed at creative professionals, the mailer has tips that are applicable to almost everybody, no matter their profession.

I'm delighted to see ifoAppleStore reporting that Apple will be releasing a new series of brochures and employee t-shirts in their retail stores to advertise the wide range of creative capabilities their Macs and software offer to consumers. The cover of the 12-page brochure (pictured) seems largely focused on advertising all the content-creating doors their award-winning iLife suite opens, while the inside of the brochure features various Apple Store employees wearing t-shirts with help-related slogans such as "I can help you go from shutterbug to photocaster."

Other strong Apple Store advantages that the brochures boast are the various Creative, Genius and Mac Specialist employees staffed at the stores who are trained to accommodate the various interests, hobbies and professions that Mac users have. The brochures advertise many more unique facets of the Apple Store and Mac-buying experience, such as their free workshops and on-line Concierge appointment scheduling service.

While I haven't been in an Apple Store in a while, all I remember from my past experience is advertising that was almost entirely focused on making me buy an iPod. It's great to see Apple putting their best foot forward with a campaign like this.

[Thanks Benjamin Bowles]

CreativeBits, a design and OS X-centric creative community, has produced a really slick looking update to their widget that acts as a portal for their site. Users can view the latest articles, forum posts, critiques and links. Clicking on a title in the widget opens the entire article in your browser, while the widget includes its own forward and back navigation if you'd like to simply browse the latest CreativeBits goodies right from the comfort of your Dashboard.

This is a good one. When they aren't busy trying to sue the pants off of Apple, Creative gets very creative indeed with the definition of "Podcast." While most of us would define "podcast" as the distribution of audio/video content to an iPod via an RSS feed (more or less), Creative lets loose with this whopper:

"Podcasts, short for Personal On Demand broadcast, are audio files you can download into any MP3 player or computer." Um, what? Nice try, Creative. That's almost as good as Microsoft's "blogcasts."

[Via 37Signals]