Jonathan Takiff | Apple-EMI pact dumps security software

THE GIZMO: Hot news on the high-tech front.

APPLE OPENS THE DOOR . . . A CRACK: Apple's agreement with the EMI music conglomerate to sell tune downloads unburdened by DRM (digital rights management) software is good news for gearheads.

Without that security software, Apple will be able to efficiently encode and push out the music files at a higher-resolution bit rate - 256 kbps, twice the current rate.

That should make the music sound less compressed and more natural, or at least "CD-like." And that quality upgrade will help rationalize the higher cost Apple will get per song - $1.29 instead of 99 cents for the still-available, DRM-encoded versions. (Full albums, with or without DRM, will be priced at $9.99.)

Better still, this music will be transferrable to non-Apple music players and even mobile phones that have the capability to read files encoded in Apple's AAC format.

Hardware makers like San

Disk, Creative and Sony already offer such compatibles, and in theory, any MP3 player can be upgraded with software to read AACs.

On the downside, the transfer of these music files from iTunes to other brands of devices will not be as seamless as it is to an iPod.

Also, let us not forget that EMI only represents about 15 percent of the music sold at the Apple store, which in turn now sells 10 percent of all music in the United States.

Thus, in the short run, this new development is not going to convince shoppers that they'll do just as well with any old brand of music player. We'll first have to see lots of other labels and possibly alternative music distribution outlets buying into the argument that a DRM-free, copy-the-music (as many times as you want) marketing strategy is the way to guilt people into paying for downloadable music.

Meanwhile, even Apple's arch rival Sony is starting to kowtow to the product champ. Next month, Sony will introduce its first officially licensed iPod accessory, the TDM-iP1 iPod cradle ($100), for use with Sony's new line of home theater sound systems.

HARD TIMES AT ELECTRONIC STORES: Retailers enjoyed a couple of years of great profits, sparked by sales of high-ticket flat-panel TVs. But this past holiday season, as supply finally approached or met demand, the marketplace started to look like a war zone.

Manufacturers and retailers repeatedly pushed down prices on their spiffiest sets. When the dust cleared, some big retail chains complained that profits for this most important, final quarter of the year were way off.

Now we're feeling the consequences. The Tweeter chain is closing several dozen of its less successful stores, including its Center City location on Walnut Street.

Last week, Circuit City pink-slipped 3,400 employees.

And this month, Costco is going national with a revamped, significantly tightened product-return policy - though it still runs rings around most of the competition.

Until now, anyone buying a TV, camcorder, digital audio player or PC from Costco had at least six months to bring it back if the product failed. We've heard tales of people returning goods way later than that, without a fuss.

Now, Costco's policy limits your return rights to 90 days. That still should suffice, since most product failures happen well within that time period, Costco CFO Richard Galanti recently told analysts.

And to soften the blow, Costco is combining the new return policy with a free technical support line and a two-year extension on manufacturers' warranties. All 32-inch and larger widescreen sets will be eligible for free in-home service during the extended warranty period.

Not too shabby.

BEST OF BREED: HDTV set owners tend to tune in content that really shows off the potential of their display - even if it's just pretty fish swimming in a tank (as seen on Dish Network's HD preview channel).

That alone should help boost the ratings in Philadelphia for KYW-TV 3 (aka CBS3) and other stations in the CBS chain that are transitioning in a really first-class way to local HD news broadcasts.

Since day one, CBS has been the biggest flag-waver for high-definition TV, the first network to do sports and rebuild its primetime programming with HD offerings. Now it's spending major fortunes to revamp local broadcast plants, with the totally new, totally digital KYW as a most shining example.

I tuned in Monday to CBS3's premiere HD newscast and was blown away by how great the package looked, from the razor-sharp graphics and the three-dimensional feel of the studio set to the sparkling, "pearly white" smile flashed by co-anchor Alycia Lane.

CBS-3's HD field reports shot on Sony XD Cam likewise enhanced this viewer's sense of you-are-there realism.

However, live remotes sent back to the station via microwave looked significantly grainier. "It's the last and only analog link in our otherwise digital chain, but we'll fix that later in the year, when every local station switches over to a digital microwave system," explained Channel 3 director of broadcast operations Rich Paleski.

FYI: In Monday's report on CBS-3's new digs, I misled you about one aspect of the project. While engineered and designed by the station staff, all the wiring work was performed by talented members of Electricians and Technicians Union Local 98, with the Gitlin firm handling the audio/video end, Blackbox bringing in the phones and Internet systems, and Shelly Electric installing the "double redundant" power system.

That's right - this broadcast facility gets juice from four power stations. So if one goes down, there are three backups. *

Send e-mail to takiffj@phillynews.com.