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Corporate branding war erupts again between
Apple Computer and The Beatles.

How do you like them Apples?

LONDON, Dec. 5, 2003. And you thought naming a business was the hard part. The long simmering relationship between Apple Computers and Apple Corps, the company that owns the rights to all of the Beatles music, has flared up once again.

Apple (the computer people) are being sued in London by Apple (the music people) over a claim that Apple Computer is violating a secret 1991 out-of-court settlement with Apple Corps over a trademark infringement claim. At that time Apple Computer paid $26.4 million to Apple Corps and agreed not to use its name or logo in connection with computer products that are used to record or reproduce music.

A few years later, when Apple configured its computers to have external speaker hookups, Apple Corps attorneys came knocking again and reportedly managed to walk away with another $20 million and change. The two companies at that time signed a naming agreement which is now at the heart of the latest round in this marketing brouhaha.

Although details of the current suit are not yet available, it is a clear result of Apple's headlong dive into the music business, first with its "Rip, mix, burn" campaign, then with the introduction of the iPod, and just recently with the opening of the Apple Music Store, which has been suddenly renamed the iTunes Music Store. Apple got the jump on all the other online music services by being first to market with a music store that sold songs for 99 cents and allowed you to do pretty much anything you wanted with them instead of charging subscription fees along with other restrictions.

Apparently, there is a cat and mouse game going on here between Apple and Apple Corps because of the difficult economics of selling songs over the web for 99 cents. The profit margins are miniscule (Apple probably loses money on the iTunes store--most of the money goes to the five major record labels) with Apple making the lion's share of its music revenue on sales of the iPod, which is now fully PC-compatible. So what it comes down to is that Apple's music business is a profit center for Apple Corps, which can't push too hard because the profits are not really there.

The moral of the story? Naming your company is always a bit of a crapshoot. Apple Corps was basically set up to give the Beatles their own label. But Apple is the company that has really marketed the name. And Apple Corps, no matter how much they complain, are quite happy to go along for the ride.