Apple Scrambles to Secure iPad Deals

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Apple Inc. is still trying to secure media content for the iPad with just weeks to go before the tablet computer's release, said people familiar with the matter, as the company tempers some of its initial ambitions for the much-hyped device.

Since the iPad became available for pre-order last Friday, Apple has seen strong demand and sold hundreds of thousands of units, say people familiar with the matter. One of these people said Apple could sell more iPads in the first three months than it sold iPhones in the three months after the smart phone's debut.

With just weeks before Apple releases the iPad, the tech giant is racing to secure content for the tablet. Plus, Toyota calls on ABC to retract and apologize for what it says was a fabricated news report by the network; and the price tag for an overhauled health plan is in at $940 billion over a decade, paving the way for a climactic vote as soon as Sunday.

But lining up TV programming, digital newspapers and other content ahead of the iPad's April 3 release has proven difficult for Apple as some potential collaborators weigh the advantages of working with the company against the potential threats to their current sources of revenue, people familiar with the matter say.

Apple is still negotiating with media companies for a price cut on TV shows that people can download onto the device, some of these people say. Apple also hoped to work closely with newspaper, magazines and textbook publishers on new ways to digitally present print content on the iPad, but has for now put the effort on backburner, said one of the people.

An Apple spokeswoman declined to comment.

The last-minute discussions show the complexities that Apple and Chief Executive Steve Jobs are facing in creating an Internet-connected multimedia device, which has pushed the company to pare back some of its initial intentions for the iPad's release.

When Apple unveiled the tablet in January, Mr. Jobs touted it as a "magical and revolutionary" product that would let people play games, surf the Internet, watch video, and read books and newspapers on a 9.7-inch color touch-screen display.

Apple has narrowed the device's scope. It has put on hold its idea to offer TV subscriptions that would be viewable through the iPad, because few media companies were interested. Instead, Apple is discussing dropping the price of TV shows to 99 cents from the $1.99 and $2.99 charged for most shows on its iTunes store, said people familiar with the situation.

Apple hasn't yet reached a deal with many major TV producers on the price cut, these people said. Some are concerned a price cut could hurt their existing businesses, these people said, including jeopardizing the tens of billions of dollars in subscription fees they are paid by cable and satellite companies for their traditional TV networks.

People familiar with the matter have said Apple is trying to allay concerns by arguing that lower pricing on iTunes could help create a new market. These people said they still believe Apple may reach deals with some to offer 99-cent shows by the time the iPad ships.

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It's also possible TV companies could offer access to their shows on the iPad through applications that would stream the videos, rather than selling them through iTunes. But streaming is often limited by a tangle of licenses between producers and TV networks. The iPad platform could also pose technical hurdles.

At the same time, some magazine and newspaper publishers said they are hamstrung by several factors that could delay the apps they are developing for the iPad from being ready by the time of the device's release.

Some publishers and TV executives are concerned the iPad doesn't support Adobe Systems Inc.'s Flash video technology, which many publishers use to showcase their multimedia content and is also an underlying technology of online ads.

One area where things appear on schedule is Apple's new virtual bookstore iBooks, which lets iPad owners purchase and read digital books. People familiar with the matter said the largest publishers are on track to deliver most of their titles and it should have almost all of the books as existing e-readers like Amazon.com Inc.'s Kindle and Barnes & Noble Inc.'s Nook.

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