Apple steps up iPod accessories 'tax'

Apple is stepping up its push to get iPod accessory makers to pay for the right to connect to the popular music player.

For some months, the company has been seeking royalties from accessory makers that want to display a 'Made for iPod' logo on their products. The programme, which one analyst has likened to an 'iPod tax', applies to devices that connect electrically to the player and not to cosmetic accessories like cases.

Now Apple has made the programme a requirement for manufacturers who want their gadgets to plug into the dock connector at the bottom of the music player, senior vice president Phil Schiller confirmed to CNET.co.uk's sister site News.com last week.

"Yes, the electrical connection has specifications around that and licensing around that, and the way you get that assistance and information and licensing is through the Made for iPod programme," Schiller said in an interview. He did not say when Apple made the programme mandatory.

It's not clear what means Apple might employ if companies don't sign up, as the company declined to comment on that. Though many manufacturers have signed up for the programme so far, some have complained in private that it's too high a price. But for Apple, the move is a chance to profit further from the empire it has built on the iPod, given that the market for such add-ons is estimated in the hundreds of millions of dollars per year.

According to a source familiar with the programme, Apple is getting a royalty of about 10 per cent of a device's wholesale price. Schiller declined to discuss the financial details, but that percentage is similar to what Apple has been seeking in recent months, according to sources familiar with the programme.

"They're just expanding the iPod tax," said Gene Munster, a financial analyst at Piper Jaffray. "Ultimately Apple is tired of watching these people profit from their success."

Munster said the move is unlikely to dramatically boost sales for the company, but said "from an earnings perspective, given it is pure profit, it could inch the needle."

Though accessory makers are loath to criticise Apple publicly, there have been grumblings over the price the company is charging. An Australian online report quoted unnamed executives from speaker makers Altec Lansing and Bose grumbling over the double-digit cut.

An Altec Lansing representative in the US said the company has been unable to verify who, if anyone, at Altec made those remarks and said it is glad to be part of the programme.

"We have a great relationship with Apple, and we fully support the Made for iPod programme," said Pamela Roccabruna, the senior marketing manager at the speaker maker.

Bose representatives did not return calls seeking comment.

Future models
Though some device manufacturers may quibble with the royalty Apple has set, there will be some peace of mind for them in knowing that the accessories they make today will work with the iPod of tomorrow.

As part of the current Made for iPod programme, Apple will ensure that devices will physically accommodate future models of the player, Schiller said. Accessory makers can build a standard well for an iPod and know that future iPods will fit into the slot. Apple has also pledged to include an adaptor with its players that will let them fit into any products built around that universal well. (Apple included such an adaptor with the recently introduced iPod nano.)

"If they want to design one device that connects with many different size and shape iPods," Schiller said, "we'll take responsibility to make sure there is a standard dock connector that comes with the iPod."