Apple seeks 10% of iPod accessory revenue

With the recently introduced Video iPod, Apple wants to keep the portable media player market for itself. The new iPod, which takes will be responsible to phase out the older iPods and take out on the already set video market (iRiver and Archos are two known brands contributing to that), opens a very large door to the accessory production. As you can see from the initial presentation of the Video iPod, you can already acquire accessories - an AV-out cable to watch your video on a television, for example. Previous iPod accessories revenues are under 2% and Apple wants to jump for the big 10% margin.

Currently the license fee sits between 1 and 2%, and the bump to 10% might see some accessory makers closing down their iPod lines. Obviously Apple is in the money making business, but one of the (many) reasons for the success of the iPod are the multitudes of licensed accessories, a dearth of which might eventually damage the bottom line, so they best be watching the backlash.

I think there is no doubt people will keep buying what is presented by Apple as a "very high quality accessory that maximizes your iPod's potential". With an attractive design and usually good specs, Apple does know how to sell products. There are also the companies that produce iPod accessories (like speakers or microphones) which pay a fee to Apple for the use of iPod's copyrighted material. I'm sure the Video iPod will be a good source Steve Jobs' money.

Source: Engadget