Apple: RealNetworks Hacked iPod

UPDATED: The bad blood between digital media rivals Apple Computer and
RealNetworks has reached a boiling point.

Just days after RealNetworks launched a
new digital rights management translation technology that would
allow the secure transfer of purchased music to Apple’s wildly popular iPod,
the device maker fired back.

“We are stunned that RealNetworks has adopted the tactics and ethics of a
hacker to break into the iPod, and we are investigating the implications
of their actions under the DMCA and other laws,” Apple said
in a statement.

The computer maker, which dominates the market for digital music sales
with its iTunes service, also threatened to block access to iPods that
connect to Real’s software and technology. “We strongly caution Real and
their customers that when we update our iPod software from time to time it
is highly likely that Real’s Harmony technology will cease to work with
current and future iPods.”

Real’s new Harmony system lets users shift their purchased music from one
media device to another, across different codecs, DRM systems and platforms.
In addition to all four generations of Apple’s iPod, Harmony works with
digital media players from Creative, iRiver, RCA, Rio, Samsung and
palmOne.

RealNetworks brushed off the Apple hacking accusations and legal threat
and insisted that the DMCA “explicitly allows the creation of interoperable
software.”

“Harmony creates a way to lock content from Real’s music store in a way
that is compatible with the iPod, Windows Media DRM devices and Helix DRM
devices. In fact, the DMCA is not designed to prevent the creation of new
methods of locking content,” RealNetworks said.

“Consumers, and not Apple, should be the ones choosing what music goes on
their iPod,” RealNetworks said, insisting that the Harmony technology is a
“fully legal” way to achieve compatibility.

This is not the first time RealNetworks has connected to the iPod. Back in
January, the company released a
new version
of its RealPlayer software to let users play music from
all major online music stores, including Apple’s iTunes and the iPod
device.

At the time, there were questions about whether RealNetworks
reverse-engineered DRM schemes from Apple and Microsoft ,
but these claims were unfounded.

RealNetworks explained that it had acquired the free software development
kits of both Windows Media and Apple’s QuickTime Audio.
RealPlayer 10 simply used the actual Windows Media Player and QuickTime code
to engage the DRM schemes, decrypt files and play them through their native
players, according to DRM Watch, a
Jupitermedia-owned site that tracks digital rights issues.

The latest brouhaha comes just a few months after Real CEO Rob Glaser
sent an e-mail to Apple boss Steve Jobs issuing a public call for a “tactical
alliance”
to thwart Microsoft’s dominance in the music distribution
space.

Glaser’s direct proposal was for Apple to license its Fairplay DRM to
RealNetworks to allow Real’s Rhapsody music service subscribers to play
tracks on iPods. In return, Glaser offered to make the iPod the “primary
device for the RealNetworks store and for the RealPlayer software.”

Apple balked at that proposal.

Yankee Group analyst Michael Goodman thinks the release of Harmony could
be a strategic move by Real to force Apple into a licensing agreement.

“What
is Real’s purpose here?” Goodman asked. “Do they want to sell music on the iPod and do it any
way they can? Or is there a bigger goal here? It’s quite possible Real is
pushing the issue to get Apple to the negotiation table.”

Goodman expects a cat-and-mouse game to develop between the two

companies.

“I think we’ll see Apple knocking out Harmony and Real applying
fixes to reconnect to the iPod,” he said, likening the quarrel to the
instant messaging interoperability war between Microsoft and America Online
.

“If RealNetworks found a legal way to reach the iPod, Apple doesn’t have
much of a leg to stand on. But, if there is some Apple code being used or
if Real has access to Apple’s information that enabled them to build
Harmony, then we may see a court case,” Goodman said.

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