Year in Review: Apple Continues to Wow

Apple continued to build on its dominance of the digital music industry in 2005, and saw the successes slowly bleed into its personal computer business as industry analysts began to gauge the iPod's "halo effect."

The folks at Cupertino would also do the once unthinkable and admit that Apple was falling behind the rest of the industry by continuing with the PowerPC architecture, a decision that could shape the company in 2006 and beyond.

Apple started the year by opening an Irish version of the iTunes Music Store four days before Macworld. However, the biggest fireworks were yet to come.

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At Macworld on January 11, Apple CEO Steve Jobs announced that the company was joining the low-price PC industry by introducing an entry level Mac Mini at $499. Jobs also unveiled the iPod Shuffle, a diminutive flash player that would now serve as the entry point to Apple's iPod line.

The products would prove popular, and by mid-month both would be backordered by three to four weeks.

Apple also announced iWork in January, featuring a new word processing application called Pages that was intended replace the company's aging AppleWorks suite, as well as an update to the iLife suite of programs.

Enthusiast site Think Secret would become more aggressive against Apple in its defense of newsgathering practices late in the month, hiring attorney Terry Gross, formerly of the EFF. Apple had accused Think Secret of revealing trade secrets late in 2004. The company would later agree to put its case on hold pending arguments from the EFF.

A 2-for-1 stock split took place February 18, which analysts said was largely possible due to the success of the iPod. However, the good news wouldn't last for long, as Apple mourned the loss of Macintosh creator Jef Raskin, who died at the end of the month at the age of 61.

Apple won a crucial ruling in early March that ordered Macintosh enthusiast sites to disclose their sources to, after the court said journalistic protections did not cover Web sites. Think Secret would fire back days later, asking for the Apple lawsuit to be dismissed.

Away from legal issues, Apple announced its support for Blu-ray during the month.

April would bring news that the company would begin selling the Mac Mini at Best Buy, the first time Apple computers had made an appearance in the retailer's stores since 2003.

Apple released Final Cut Studio on April 18, followed by the launch of Mac OS X version 10.4 Tiger two weeks later.

At the end of the month, Apple announced another record quarter for the company, with 1 million Macs and an astounding 5.3 million iPods shipped.

A Georgia county would help strengthen Apple's position in the educational sector as the go ahead was given for 63,000 iBooks to be distributed to Cobb County schoolchildren and teachers in early May.

Improvements would also come to iTunes during the month, including the addition of music videos to the catalog and the opening of four new European stores: Denmark, Norway, Sweden and Switzerland.

Rumors of negotiations with Intel would first surface at the end of May, as the Wall Street Journal said the two sides were close to a deal. But neither company would confirm it at the time. Those rumors would be confirmed as Apple announced a switch to Intel chips on June 6 at the company's Worldwide Developer's Conference.

The first Intel Macs will arrive in 2006, with a goal of all Macs being Intel-based the following year.

At the end of June, Apple brought color to its iPod lines, axing the 30GB version and keeping 20GB and 60GB models. The company also added podcasts to iTunes with the release of version 4.9.

Apple would post yet another record quarter in mid-July, announcing a $320 million profit. During the quarter, Apple shipped 6.16 million iPods and 1.18 million Macintosh computers. The company said it had sold 500 million songs through the iTunes Music service a week later.

The turbulent relationship between HP and Apple came to a close late in July as the company called it quits on their 18-month partnership.

The two button Apple-manufactured Mighty Mouse would make its appearance in early August after years of consumer demand. The company also expanded the iTunes Music store to Japan, and would later announce the store had sold one million songs in four days.

Whether it was a symbol of Apple's rising power, or just a chance to get a cheap laptop, an old iBook giveaway in Virginia resulted in several injuries and a lot of unhappy customers as supplies ran out quickly in mid-August.

Also during August, a settlement was reached for owners of iPods with defective batteries, affecting some 1.3 million customers.

September 7 would be a big day for Apple, as it announced an all new version of iTunes, the much anticipated Motorola ROKR phone, and the iPod nano, which replaced the aging iPod mini line. The nano's "impossibly small" size captivated the crowd and took much of the publicity, much to the chagrin of Motorola.

Jobs would also stand firm against the music industry during the month, saying songs in Apple's iTunes store would remain at 99 cents.

First reports of problems with the iPod nano would become public late in September, with users complaining of screen defects and scratching issues across user groups and on the Apple support Web site.

The company reported yet another stellar quarter in October, however iPod sales were relatively flat. Figuring the news likely would not sit well with investors and the media, a press event the next day introduced a media center iMac, as well as the oft-rumored video iPod.

To support these new products, Apple released iTunes 6 with individual music videos for purchase, as well as downloadable TV shows from ABC and the Disney Channel. The company announced at the end of the month that it had sold 1 million videos.

Apple's nano problems would come back to bite the company later in the month when it became the target of a class-action lawsuit over the quality of the player. The suit would go international in early November, and is believed to be the reason why Apple began to include protective sleeves with the nano shortly thereafter.

New television shows from NBC Universal, including 11 TV shows from NBC, USA Network and the Sci-Fi Channel, and select classic shows would appear on iTunes in early December. Rumors swirled that Apple was also in negotiations with other media companies to add their programming as well.

While 2005 was a landmark year for Apple, 2006 will pave the company's future path. Macworld kicks off the week after CES in early January and speculation has pointed to the release of an Intel based iBook and revamped Mac Mini, complete with DVR functionality. While such rumors have proven wrong in the past, one fact is clear: Apple continues to wow the industry with new and innovative products.

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