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In Reply to: RE: That was the popular rumor but not the fact..... posted by AbeCollins on May 03, 2017 at 10:03:40
" Pono Music shutdown before Apple acquired Omnifone. "
Everything I have read was the opposite of this. Apple acquired Omnifone, then gave Pono three days notice they were stopping service, and Pono Music was online until Apple/Omnifone pulled the plug.
If Pono was paying their bills then why would Apple deny them service?
Here is a quote directly from Pono, "One of the key infrastructure partners - Omnifone - has recently been acquired by a large company. An impact of this purchase is that all Omnifone's supply relationships are being terminated, effectively immediately. Omnifone has been the exclusive content provider for PonoMusic."
Routenote online mag had this to say about the termination of service, "Part of Omnifone's buyout deal resulted in the termination of connections, which seems like a kamikaze move.
In the wake of their terminated contract PonoMusic began transitioning to 7 Digital."
So you see the contract was terminated by the new owners. Omniphone did not cease service because they sought protection from creditors.
Indeed a company with cash flow problems telling it's paying customers to get lost is a kamikaze move. Unless that was the intent of the new buyer in the first place. Omniphone was acquired for $10 million by Apple which is chicken feed to them. I've read Apple makes $3 million every minute. Also when Apple made their bid they were listed as a an "undisclosed buyer."
I found other quotes from online journals if you are interested. Interestingly they seem to dance around the Apple issue. Don't want to piss them off now do we?
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Big speakers and little amps blew my mind!
Follow Ups:
The point is, Omnifone was in serious trouble before Apple purchased them. Ominiphone going belly up, and subsequently Pono closing it's doors was inevitable regardless of Apple's timing in purchasing them.
Apple saw value in Omnifone but that does not put them under any obligation to keep Pono or other Omnifone customers afloat. I'm sure Tim Cook didn't wake up one morning and say, "I hate Neil. I think I'll kill Pono".
Pono chose a weak single source partner in Ominifone and they were blind sided with no contigency plan. Poor business decisions killed Pono, not Apple. They would have shut down either way you view it.
And it's not like we were lacking for established hi-res music download sites. The whole timing of Pono's launch and business model was flawed from the beginning as the download business was known to be in decline.
So no, Apple didn't kill Pono. Pono killed Pono.
Pono would still be operating today if Apple hadn't bought Omniphone and stipulated that Omniphone was required to immediately terminate all current contracts as a condition of the sale. Goddamn, how obvious can you be?
Serious trouble from reports, but I didn't read anything about Omniphone filing Chapter 11 bankruptcy. Even if they were in chapter 11 they still could operate and reorganize. No they didn't have to shut down.
If Apple wanted to play corporate raider, then they wouldn't have made them cancel current contracts. If they had wanted the Omniphone capacity they would just build it themselves on one of their compounds. We both know there is nothing Omniphone had that Apple really wants. When the treasure stacks up too high Apple buys companies like Disney and ESPN.
Talking about bad business decisions, one of the articles I read said the bad decision by Pono was not to create their own server/hoster. It said that all the streaming companies like Spotify and Tidal maintain their own servers. If Pono had bought Omniphone they would still be in business. I think it would be interesting to know if Omniphone ever approached Pono about a share in their company for some operating funds, or offered them the company? Or did Apple really blindside their asses? Mr. Young just didn't cover his ass well enough. Welcome to the business world. He should know the deal. I bet Music Direct and HDTracks has their own servers, but I don't know.
Download revenue down? Yeah only $350 million last year. That's just not enough for everybody. I could see how Tim Cook would say cutting some throats is in order.
There is no reason why Pono should not to be operating right now except dirty business. God knows no anti-trust law has been enforced in this country in more than 50 years.
Apple killed Pono, and they suck for it, and I won't even go into the rant about how the real Apple died with Steve Jobs, and now you Abe Collins are going to have to watch the slow slide to mediocrity the bean counters will turn Apple into. The only bright spot is that it is headed now by an archetypal corporate climbing sociopath, would could do lots of evil things. To boot it is owned by a rich widow with a progressive bent. Ought to be fun.
I will also mourn what Apple once was, just not as much as you.
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Big speakers and little amps blew my mind!
Believe what you want. Haters will be haters. See my comments to Dave_K.
We've all seen it, we all love it, let's all watch it again together. :)
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Big speakers and little amps blew my mind!
Edits: 05/04/17
It's called capitalism. Get used to it.... it beats the alternatives.
Why would Apple bother to purchase a company that was losing money and on it's way down? And after buying said company, why would Apple terminate deals with paying customers? There is only one answer: eliminate competition.
Apple paid a very cheap price to eliminate a formerly major competitor in Omnifone that had fallen down on its luck after a couple of big name desertions. It's hard to say whether eliminating Pono played a factor in their decision. Pono was very small time, but had a high media profile.
You can criticize Pono for hitching their wagon to a horse with no legs, but that doesn't change the fact that Apple are the ones who actually cut them off, the ones who did the deed.
May 2016, a full year ago: "B2B digital-music firm Omnifone has been placed into administration, resulting in the layoff of up to 70 staff as it seeks a buyer for the company's technology assets."
"...Omnifone's revenue base appears to have deteriorated over the last year to the point where administration was the only viable option for the company."
Why would Apple bother to purchase a company that was losing money and on it's way down?
Omnifone was already in administration (bankruptcy) and were laying off staff. They were actively seeking a buyer for their technology assets.
And after buying said company, why would Apple terminate deals with paying customers? There is only one answer: eliminate competition.
Your assertion that Apple's goal was to eliminate competition is absurd. As stated above they bought Omnifone for their technology. The company was already in trouble and seeking a buyer. Apple actually ended up hiring a number of Omnifone employees after the acquisition. They were under no obligation to keep Omnifone customers.... they wanted the technology.
Yes, Apple is a huge company. And yes, people love to hate success.
Omnifone had no unique technology or services. They had a handful of worthless UK patents that nobody was licensing, an e-store platform for selling music downloads which Apple and others already had, a streaming platform which Apple and others already had, and finally, they had (apparently uncompetitive) deals with music labsls that Apple and others already had. That's why they were losing customers and going bankrupt.
I seriously doubt that Apple had any real need for those Omnifone employees that they hired. Apple is in a position where they can hire people just to keep them off the market.
Again, what's the motivation for buying a failing company with no unique technology and no money-making customers?
Again, what's the motivation for buying a failing company with no unique technology and no money-making customers?
I already addressed and debunked much of what you said but believe what you want. As for technology and services, Omnifone had cloud based infrastructure including unique software that was of interest to Apple.
So you're saying that Stereophile pimped a product (Pono) that was locked in to a company that was failing with no unique technology and no money-making customers?
Cheers,
SB
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