Apple Should Succumb to IPod Porn Temptations: Mark Gilbert

Apple Computer Inc. never seemed too bothered about whether it made money. Worrying about earnings was for the bean counters at Microsoft Corp. and Dell Inc.; Apple was too busy being hip and sexy to fret about its bottom line.

The runaway success of its iPod portable music player, though, seems to have given the company a renewed lust for life. After years in the wilderness as a niche maker of groovy computers and software for designers and musicians, Apple is starting to enjoy mainstream success.

And, just like every other underground artist, Apple faces some tough decisions that will leave it open to accusations of selling out. As the Cupertino, California-based company adds television shows, films and sporting events to its iTunes Internet store, one entertainment category is notable by its absence -- pornography.

Apple said last month that iTunes customers were buying about 1 million videos a week, and have downloaded more than 15 million of them since the moving-picture services started in October. Given that Apple has sold more than 1 billion songs, the potential for exponential growth is clear as TV and film executives learn to stop worrying and love the Internet.

It's pretty obvious, if a little dismaying, that adding an adult-video section to the iTunes Web site would generate a ton of new visitors and additional revenue for Apple. If the tiny 2.5 inch screen on the video iPod is no deterrent to people watching ``Desperate Housewives,'' it's not likely to hinder potential viewers of, errrr, desperate housewives.

One More Thing

It's also obvious, though, that porn would sit badly with Apple's self-image. One more thing, says Chief Executive Officer Steve Jobs at the next marketing presentation, as the wall-sized video screen behind him fills with fleshy images of bump and grind. It's hard to picture that scene; Apple is all about whiteness and purity, not smut.

Money, though, is the root of all evil, and there's a lot of money to be made from the alleged evil of so-called adult entertainment. Porn is, literally, the Internet's dirty big secret. There are 4.2 million pornographic Web sites, with 372 million porn pages handling 68 million search requests per day, according to TopTenReviews Inc., which analyzes software products and Internet services.

$20 Billion Temptation

The porn industry generates $57 billion in global revenue over the Web, the research firm says, with sales of adult videos contributing $20 billion. Stealing just a sliver of that market would goose Apple's efforts to replicate the success of its music business, which helped generate a first-quarter profit of $565 million on sales of $5.75 billion.

Apple's desire to find additional sources of revenue seems to be increasing. Last week, the company introduced software that lets Apple computers with Intel Corp. chips run Microsoft software -- a tryst that would have been unthinkable in the past.

It's a little saddening that the last maverick in the computer-hardware industry is jumping into bed with Microsoft. It is evidence, though, that Apple is tiring of being an also-ran with just 4 percent of the U.S. market for personal computers. For years, Apple seemed happy just to survive; now, the company seems more willing to compete.

Also last week, the Red Hot Chili Peppers announced that advance tickets for their next concert tour would be sold exclusively through the iTunes store. Whatever the merits of the lawsuit Apple is fighting with the Beatles' music company Apple Corps Ltd. over logos and brand names, CEO Jobs is clearly trying to move beyond just selling digital tunes.

Bundling Bones

Apple is already starting to bundle music videos with songs; it's not hard to envisage a future where anyone who wants a ticket to see the Rolling Stones strut their sexagenarian stuff at Madison Square Garden will have to pay Apple for the accompanying video and album collection, whether they want the package or not.

The mobile-phone market may prove to be a useful test of how Apple is maturing. Internet gossip sites have been awash with speculation that Apple will finally relent and introduce a device that lets you make phone calls as well as listen to your iTunes music collection. The handset market, though, is notoriously fickle. Telephony is intrinsically boring. Apple seems reluctant to risk a screw-up that would disappoint its fans.

Get Yourself Connected

The numbers, though, suggest Apple should swallow that risk. Selling more than 42 million iPods in less than five years looks like success, until you realize that mobile-phone sales climbed to about 795 million handsets last year. IPod fans will pay top dollar for an Apple iPhone; CEO Jobs should provide one.

The same applies to porn. A search on Google Inc. shows a bunch of companies willing to sell the content and software needed to view erotic material on an iPod. Apple may as well grab some of that revenue for itself.

The more Apple, which celebrated its 30th birthday on April 1, thinks of itself as a grown-up, responsible company rather than an awkward, geeky teenager, the more likely it is to make hard, commercial decisions using its head rather than its heart. IPod porn, desirable or not, may prove an irresistible temptation to a more profit-hungry Apple.

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