"DVD Jon" Reverse Engineers FairPlay
breun writes to bring us up to date on the doings of Jon Lech Johansen, known as "DVD Jon" after he cracked CSS encryption at the age of 15. As reported by GigaOM's Liz Gannes, Johansen has now reverse-engineered Apple's FairPlay DRM — but not to crack it. Instead Johansen's company, DoubleTwist Ventures, wants to license the tech to media companies shut out by Apple from playing their content on the iPod. And, soon, on the iTV. Johansen could end up selling a lot of hardware for Apple.
Apple doesn't make a boatload of money on the hardware (why else are they able to effectively price-match other MP3 players), but a huge amount from Itunes.
You have that completely backwards. Apple's profit margin on the iPod is huge compared to what they're making on iTunes downloads...
DVD Jon, didn't break the FairPlay, he emulates it with his software. So he's not in violation of DMCA I think. Just like the Samba project reverse-engineered the SMB protocol, they did the same. So he's going to talk to Steve in January and has at least one (1) customer (Microsoft? haha)
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Does nobody remember the landmark Sony vs. Connectix case? A company can reverse engineer proprietary software and implement software that replicates functionality learned from said reverse engineering in their own devices in order to create compatibility between devices.