iTunes and the iTunes Music Store in 2007:

The iTunes Music Store continued its reign at the top of the online music sales charts throughout 2007, providing the paid content for all those millions and million of iPods that Apple sells every quarter.

Most notably new this year to the iTunes Music Store was the addition of iTunes Plus songs, the first legitimate DRM free tracks available on an online music store. The first label to make such an arrangement was EMI on April 2, 2007, offering their whole digital catalogue of artists exclusively on iTunes DRM-free at a higher bit-rate and for $1.29 a track. The whole industry looked on to see if this new approach would work.

And work it did. Greater consumer awareness and a vocal online community backlash against DRM (spearheaded by our fellow goggled and caped blogger Cory Doctorow) led to great enough sales of iTunes Plus tracks that the other music labels took notice.

... but there was a problem. The music labels were getting uncomfortable with iTunes's dominance of the online digital music marketplace. Its virtual monopoly over the marketplace meant Apple was calling the shots on album and track pricing. There were rumours that Steve Jobs was pressuring the music labels into a standard pricing scheme the labels didn't like. The labels wanted to charge more for new releases, Jobs said no and they had to comply or not be on the largest online music store. Suddenly, the music labels found themselves not in control over the pricing of their own content.

Discussions got so heated that some of the labels, like Universal, didn't renew their contracts with iTunes, meaning they could pull their catalogue from the store at will.

With the new wave of DRM-free music that EMI had begun, the labels saw their chance. Soon label after label, most recently Sony BMG, began offering DRM free music, but exclusively on stores other than the iTunes Music Store, and mostly on Amazon's DRM-free Store. They see this new DRM-free movement as a way to wrest control from iTunes and Apple, and back into their hands. If the stores are competing enough to where they're begging the labels for content, then the power is back in the labels, and they can once again dictate prices on their content.

Has the preference for DRM-free tracks been large enough to steer a significant amount of users away from iTunes? So far, there aren't enough numbers, but I suspect we'll get some market research data at Steve's Keynote on Tuesday that will tell us if the label's plan has worked.

In the meantime, competition from stores like Amazon forced Apple to lower the price of iTunes Plus tracks down to the regular $.99 of their DRM'd offerings, so the competition has been good to consumers so far.

Pricing also got the iTunes Music Store into some hot water in the European Union, where Apple faced allegations of price fixing and antitrust violations, eventually forcing Apple to announce they would normalise pricing across all European markets.

Mac OS X in 2007:

2007 brought us the release of the newest major version of Mac OS X: 10.5 "Leopard". Touting many new features and tweaks, including Time Machine, Quick Look and Core Animation, this release is Apple's answer to the infamous Microsoft Vista.

Of all the new features, my favourite is Time Machine: a system wide backup solution. All the end user has to do is plug in an external hard drive and the system asks if you want to make that hard drive your backup drive. Once the user answers yes, that's it. The system takes over and automatically makes backups periodically, keeping a timeline of how your files looked.

At any time, you can invoke Time Machine on a folder or Time Machine enabled application and look back in time to see how your files have changed over the past few hours, days, weeks, months and years. If you find a file you want to restore, you merely click it and click restore and, to borrow from Steve Jobs for a second, boom. Your file is restored.

This is all done through the usual bit of Apple graphical wizardry: a space themed background and floating windows in space stretching on into the background, indicating each backup as you look into the past. It's a very cool look and feel for a task that until now, many users never bothered to do - backing up their files.

The ease of set up and the cool way in which you restore files is what makes this my favourite feature. It means that now, all those people I do technical support for can easily set up a back up drive without needing my help. And if they have back ups of their files, my job is made infinitely easier should anything break. Time Machine is a blessing to any tech support people out there.

A new feature in Leopard that I'm sad I've yet to see implemented very much (except recently in Filemaker's new Bento application) is Core Animation. Core Animation is Apple's new application development framework that is supposed to make cool graphical effects easily available to any Mac OS X developer. In fact all those cool fade in, scrolling, shrinking, page turning, etc. effects you see on the iPhone are all implemented using Core Animation.

I would have thought that many more developers would have leveraged this technology by now, but I'm disappointed to see that few have. It's a shame, as it could lead to a whole new generation of applications that are much more fun to use. The next version of Delicious Library by Delicious Monster is said to employ heavy use of Core Animation, and I can't wait to see the results.

There are a myriad of other changes in Leopard, including many under the hood additions and tweaks (like the FSEvents framework that makes Time Machine possible) that I don't have time to delve into here, but Ars Technica has an excellent in-depth overview if you are so inclined. It's a wonderful read if you want to know some of the background changes that Apple has made.

iLife in 2007:

The iLife suite of applications is Apple's way to add value to its Macs by bundling cool consumer level applications like Garage Band and iMovie that allow Mac users to easily manage their photos, create DVDs, edit movies, publish web sites, and make music.

iLife '08 was released recently, bringing with it the usual bits of new features to all the applications in the suite, but most notably, iLife '08 brought a completely new version of iMovie to Mac users.

This new version of iMovie made it much faster and easier to edit movies than the previous version, but at a price: many of the more advanced editing features that made iMovie almost a mini version of Apple's professional editing application Final Cut Pro were now gone.

Users accustomed to the features of the old iMovie cried out. They accused Apple of purposefully cutting out features from iMovie in order to push users to buy their new Final Cut Express editing package.

The outcry over the new version of iMovie was so great, that Apple offered the old version of iMovie for download to anyone who wanted it. Ouch.

iWork in 2007:

The biggest change to iWork, Apple's bundle of Keynote (a PowerPoint competitor, famous for powering Steve Jobs's keynotes) and Pages (a desktop publishing and word processing application), was the addition of the long rumoured spreadsheet application: Numbers.

With Numbers, I don't really believe Apple wanted to directly compete with Microsoft's spreadsheet juggernaut Excel. Excel is aimed squarely at businesses and office level applications, but Numbers, with its pretty graphical design presentation capabilities, is aimed at the home user market.

Numbers makes a lot of the common spreadsheet tasks a lot easier, and makes presenting them in impressive charts and graphs a breeze. It can also leverage the iLife and Quicktime frameworks to include different types of media in its spreadsheets.

Numbers also includes many default templates for budget keeping and other common tasks that give a user an already configured spreadsheet with the usual level of Apple graphical polish.

I haven't seen Numbers really grab a hold of users; however, and I think it will need a few more updates and new features to really begin drawing the household user away from the comfortable grasp of Excel.

Apple's Professional Applications in 2007:

Unfortunately, not being employed in the movie, music production, or professional photography businesses, I have very little experience with Apple's professional suite of applications and as such, don't have any real thoughts to add besides the fact that Apple has been pursuing an aggressive policy of buying patents and software houses that can add features to Apple's applications or that compete with Apple's own software offerings. For example, Logic, a professional music production application, was one of those acquisitions.

Some of these aggressive tactics, especially with respects to Final Cut Pro, have led competitor Adobe (who offers their own professional movie editing applications, like After Effects) to at times become a little snippy, giving rise to rumours of delayed updates to Adobe's Creative Suite line of applications, an important software package for professional Macintosh users.

Thankfully, any animosity resulting from these tactics has yet to really materialise, and Adobe delivered its new Creative Suite 3, optimised for Intel based Macintoshes, in 2007.

Conclusion:

Apple did a lot of software development in 2007: releasing major updates to its core operating system, consumer application suite, office application suite, and adding features to its popular iTunes Music Store and iTunes jukebox software, all in the midst of a major new hardware release in the iPhone and completing the last vestiges of a hardware architecture change from PowerPC to Intel.

So what does Steve Jobs's keynote hold for the future of Apple software? Tune in tomorrow when I bring you rumours and our predictions for what the Macworld Keynote has in store for us.