Market Overview

iPod Owners Receive Unexpected E-mail That Could Be Worth....


It sounds like spam, but this revealing e-mail might actually be worth a read.

Assuming you'd like a few extra bucks, of course. You do like money, right? Those who purchased an iPod between September 12, 2006 and March 31, 2009 could be entitled to a portion of a win or settlement -- assuming one actually occurs -- for a pending class-action lawsuit that claims Apple (NASDAQ: AAPL) "violated federal and state laws by issuing software updates in 2006 for its iPod that prevented iPods from playing songs not purchased on iTunes."

The lawsuit also claims that the software updates "caused iPod prices to be higher than they otherwise would have been."

Full details of the lawsuit can found at (via AppleInsider). In short, those who purchased an iPod Touch, iPod Shuffle, iPod Nano, or the standard iPod are potential "members" of the suit. Members can sit back and wait for the legal battle to unfold and hope for a cash windfall, but give up their right to sue Apple individually. Members who wish to sue Apple individually may choose to do so, but they must first ask to be excluded from the aforementioned class-action suit.

Unfortunately, They Don't Have a Case

While I can see how Apple got into trouble for allegedly colluding with book publishers to raise the price of e-books (an act for which Apple may be punished), and while I can understand that employees may be furious over the company's attempt to eliminate competition for skilled labor, this iPod case is as baseless as the one that claimed Electronic Arts (NASDAQ: EA) used its exclusive deal with the NFL to raise the price of football games.

I've owned a standard iPod since '05 or '06, and an iPod Touch since it arrived in the fall of 2007. Since that time, I have loaded an endless number of songs onto both devices -- songs that I obtained not just from iTunes but from CDs, websites of indie bands, music portals like Pure Volume, and other legal venues. Not once have I had trouble playing those songs on my iPods. All I or any other iPod owner has to do is drag the music file into iTunes, and then drag that file from iTunes to an iPod. Users who set their iPods to synch automatically can completely skip that last part.

Lawyers involved in the suit might be under the impression that Apple has committed a horrible sin by forcing users to access iTunes at all. (What a tragedy!) But that's not what the lawsuit states. Instead, it claims that Apple "violated federal and state laws by issuing software updates in 2006 for its iPod that prevented iPods from playing songs not purchased on iTunes."

I'm no lawyer, but I've watched enough legal dramas to know that while you can use technicalities and/or a stellar closing argument to help a guilty man go free, you cannot sue a corporation for a problem that did not exist.

Prices Are Higher? LOL!

Let's all give a big "laugh out loud" to the lawsuit's second claim that the aforementioned software updates "caused iPod prices to be higher than they otherwise would have been."

Now allow me to follow up my "LOL" with an "Umm, what!?"

How, exactly, did Apple raise prices of the iPod by releasing a software update that forced users to buy all of their songs on iTunes? Even if the software update had done exactly that, wouldn't that have turned users off? Consumers may be sheep, but they won't buy a device that prevents them from enjoying their existing music collection.

Thus, if Apple had implemented a software update that forced us to repurchase our entire collection on iTunes, iPod sales would have been much lower, which would have forced Apple to lower the price. But that didn't happen.

The lawyers involved in this suit might still be under the impression that they can argue against Apple's pricing structure. But while it is true that MacBooks are heavily overpriced, the iPod has always fallen in line with the price points of its competitors. You can find cheaper MP3 players, sure. But that can be said about anything. When consumers go to the grocery store, they can find cheaper soft drinks than Coke (NYSE: KO) or Pepsi (NYSE: PEP). They can find cheaper cheeses than those made by Kraft (NYSE: KFT). Does that mean that these products are breaking the law because their respective manufacturers charge a little bit more?

That's for a judge to decide. But I can't think of too many judges that would allow this Apple lawsuit to continue. While Apple's other legal battles may continue for many years to come, don't expect to hear much more about this one.

Follow me @LouisBedigianBZ

Posted-In: Apple Coke ipod iPod Lawsuit iPod NanoNews Legal Tech Best of Benzinga


Related Articles (AAPL + EA)

View Comments and Join the Discussion!

UPDATE: China International Capital Reiterates Buy Rating, Raises PT for Mindray

Wholesale Inventories Rise Less than Expected