MacRumors

9to5Mac believes that Sony BMG will soon begin offering their music catalog to Apple in the iTunes Plus format. iTunes Plus is Apple's marketing term for higher quality (256kbit) audio tracks without any copy protection (DRM). Apple first started selling iTunes Plus tracks from EMI in May, 2007.

Despite Apple's willingness to sell DRM-free music, the other major record labels have withheld this ability from the company in an effort to reduce iTunes' marketshare in digital music downloads. The biggest beneficiary appears to be Amazon who currently offers DRM-free digital downloads from all four major music studios.

Sony BMG's iTunes participation would leave Universal Music Group and Warner Music Group as the remaining Apple holdouts. If true, Macworld San Francisco could be a possible announcement date for the new agreement.

The drama continues for Apple's new employee Mark Papermaster who recently took a job at Apple to replace Tony Fadell. The transition has received more attention than usual due to a lawsuit filed by IBM.

Papermaster was said to have a non-compete agreement in place in which he agreed not to work at a competitor for a period of one year following his employment at IBM.

A new report reveals that a District Court judge has now ordered Papermaster to immediately stop work due to the possible violation of the agreement. Papermaster has argued that IBM and Apple are not competitors. Apple has said they will comply with the court's order but "are confident that Mark Papermaster will be able to ultimately join Apple when the dust settles".

Papermaster was hired at Apple to replace Fadell as senior vice president of Devices Hardware Engineering. Fortune provides a detailed timeline of the events of Papermaster's recruitment. Steve Jobs is said to have offered Papermaster an offer he couldn't refuse, a "once in a liftetime opportunity". Papermaster accepted the job offer despite a significant counteroffer from IBM.

Apple's latest patent application reveals that they're continuing to look into personal virtual reality headsets. The February 2008 application is titled "Automatically adjusting media display in a personal display system" and details a "personal display system" which can give "the impression of being in the theater."

Apple suggests that by detecting the user's movements, the image could be adjusted accordingly:

For example, the device may detect a user's head movement and cause the portion of media displayed to reflect the head movement.

Apple even makes the point that they could take the realism so far as adding theatre surroundings, adjusting sound effects based on the user's "seat" and even adding outlines of other patrons sitting in the theatre.

It's not unusual for Apple's patent applications explore novel concepts but Apple has published previous patents related to similar headsets.

MobileCrunch reveals that during an interview at the Web 2.0 Summit, AT&T Mobility CEO Ralph De La Vega confirmed that AT&T would be offering an official tethering option for the iPhone "soon".

Tethering is the process by which you allow the iPhone to act as a 3G modem for your laptop. This would allow you to share the iPhone's cellular connection with your laptop.

A 3rd party tethering option called NetShare briefly appeared in the App Store before it was removed by Apple. AT&T traditionally charges an additional $30/month for this tethering option on their other smartphones. MacRumors has separately heard that this tethering capability is expected to be built into the 2.2 firmware.

German blog Schimanke.com publishes new screenshots from the iPhone 2.2 firmware that reveal that Apple has activated iTunes and App Store features that will make their debut in the next iPhone update. Prior to this past week, these new features had not been fully enabled.

The new iTunes Store screenshots confirm that Apple will be delivering over-the-air downloads for both video and audio podcasts. According to Schimanke, podcast downloads will be limited to episodes less than 10MB in size when using the cellular network.

The screenshots also show off the new App Store category view with icons embedded. Additional 2.2 features previously revealed include the addition of Google Street View and Japanese Emoji icons.

Meanwhile, there has been no evidence of background "push" notifications which were originally promised in September. Unconfirmed whispers suggest that the Apple has delayed the push notification service due to major issues with the initial implementation.

Apple seeded Beta 2 of the 2.2 iPhone firmware to developers in late October but has given no indication when we can expect a public release.

The fate of the Mac Mini remains a hot topic with conflicting reports about the fate of the Mac mini. While early reports have suggested the Mini will be discontinued, others have claimed that there will be at least one more update.

Some possible hope for those waiting for a Mini update comes from an unlikely source. One concerned customer reportedly received a response from Apple after firing off a concerned email about the fate of the Mac Mini to Apple's Mac hardware engineering chief:

I got a prompt reply by phone from an Apple executive care person essentially giving me no new information but assuring me that Apple knew the mini was a popular machine and to be patient

Given Apple's statement that there are no plans for new products before the holiday season, the next opportunity for Apple to introduce a new Mac Mini is Macworld San Francisco which takes place between January 5-9th, 2009.

MacRumors had previously reported that the new NVIDIA-based MacBooks and MacBook Pros showed dramatically less CPU usage when playing back H.264 content. The conclusion was that Apple had enabled the use of hardware acceleration for H.264 video playback. H.264 is the video format that Apple encodes all iTunes video content and movie trailers in, so any improvements in playback would benefit a large segment of customers.

Based on early testing, it appears that the 2nd generation MacBook Air also delivers performance improvements during playback of H.264 video. One important additional advantage, however, is that this also appears to dramatically decrease heat production in the thin laptop. One of the early complaints about the original MacBook Air was related to overheating during video playback.

Forum member NC MacGuy performed side-by-side H.264 playback testing of a 1st generation 1.6GHz MacBook Air and a 2nd generation 1.86GHz MacBook Air and found a 10 degree difference in temperature between the two models. The lower temperature reflects the fact that the 2nd generation MacBook Air's processor was running at a lower clock speed (800Mhz) than that of the 1st generation (1.4GHz). The new MacBook Air was presumably able to further throttle the CPU speed down since the GPU was now handling much of the H.264 playback.

On Wednesday, Apple released its annual 10-K reports which detailed revenue and spending for fiscal 2008. eWeek has kindly organized the information into a number of charts, including this one showing Apple's revenue growth over 2007:

Other graphs show growth in both Apple's desktops and portables by 37-38%. Even greater levels of growth can be seen across international markets as well. The results should come as no great surprise, as Apple has been reporting record breaking quarterly results throughout the year.

Apple's research and development costs have increased proportionally to their revenue and remains about 3.4% of net sales at $1.1 billion in 2008.

Earlier this week, a number of complaints emerged about a trackpad issue found on the new MacBook Pros. PCPro.co.uk relays one customer's experience:

"Every 50 clicks, my trackpad will stop responding for five to clicks," reports one poster. "Generally this will resolve itself given a few seconds, and is not directly dependent on number of times the trackpad is clicked while unresponsive."

The problem even drew the attention of Apple according to one blogger who received a phone call from the company specifically about the issue:

He told me that Apple is researching the clicking issue. They have no resolution of it and, of course, there's not really an official acknowledgment of it, but they are checking into it because they've heard the complaint frequently.

Just yesterday, a MacRumors reader emailed a similar complaint to Steve Jobs who responded with a short but revealing email that simply stated "Software fix coming soon."

Steve Jobs has been known to reply to emails in the past and a review of the email headers found them to be consistent with Jobs' previous emails. No exact timeframe on the fix was given, but this information should provide some reassurance to those affected that it seems to be correctable with a simple software update.

Thanks to Max at StartupInterviews.com

Forbes reports on Apple's "secret weapon" that has helped keep its earnings well above expectations: falling NAND-flash memory prices. And according to Forbes, there are no signs that this trend will abate anytime soon.

Tech tracker iSuppli released a report last week predicting that the dollar value of flash memory sales will decline this year and next, even as unit sales pick up.

A combination of falling demand and over supply are contributing to the plummeting prices. The benefit to Apple will be higher margins for their current products as well as the ability to incorporate higher capacity storage into future products.

The dropping prices may also allow Apple and other companies to put more flash-based hard drives into their notebooks. Apple recently introduced a 128GB Solid State Drive (SSD) option for their MacBook Pro. Apple's iPod and iPhone products could also see higher capacities over time.

The Wall Street Journal reports that Tony Fadell, the senior vice president of the iPod Division at Apple, is leaving the company for personal reasons.

Fadell has been credited as the "father" of the iPod and also was part of the team involved in the development of the iPhone. According to a 2004 Wired profile, Fadell was an independent contractor and hardware expert who came up with the idea for the iPod and eventually approached Apple:

"Tony's idea was to take an MP3 player, build a Napster music sale service to complement it, and build a company around it," Knauss said. "Tony had the business idea."

Knauss said Fadell left Philips and set himself up as an independent contractor to shop the idea around. Knauss said Fadell approached several companies and was turned away by all of them, except for Apple.

As an interesting historical footnote, Fadell approached and briefly worked at RealNetworks before he joined Apple, suggesting that the iPod's history might have been dramatically different. Apple released the iPod on October 23rd, 2001. The iPod is credited for much of Apple's financial success over the following years.

Update: Apple issued a press release confirming the departure:

Apple also announced that Tony Fadell, Apples senior vice president of the iPod Division, and his wife Danielle Lambert, vice president of Human Resources, are reducing their roles within the company as they devote more time to their young family. Fadell will remain at Apple as an advisor to the CEO. Lambert will depart the company at the end of this year after a successor is in place.

Mark Papermaster will be joining Apple as senior vice president of Devices Hardware Engineering to replace Fadell. Papermaster is the former IBM executive that Apple recruited which triggered a lawsuit from IBM.