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Apple Release Custom U2 iPod

Rock band U2 has cut a deal with Apple Computer to sell custom iPods promoting the band’s forthcoming album.

Sources close to the group say the U2 edition of the popular digital music player will come preloaded with the band’s new album, How To Dismantle An Atomic Bomb, along with portions of the Irish supergroup’s 25-year catalogue. The iPods will be black and will be made available the same week as the band’s 11th studio album, which is slated to be released in the U.S. by Universal Music Group’s Interscope Records on November 23.

The deal is expected to be announced officially next week in San Jose, Calif. at a conference held by singer Bono, guitarist The Edge and Apple founder Steve Jobs. Both Apple and Interscope representatives declined to comment.

The custom iPods are part of a larger agreement between the band and Apple. The company will have exclusive rights to sell all the songs from the new album online through its iTunes Music Store for at least the first few weeks following the release. U2 and Interscope will split a standard royalty for each song downloaded (about $0.60 per download), plus an upfront licensing fee. In return, the band shot a 30-second commercial pushing its latest single, Vertigo, on iTunes. The spot, a cross between a music video and Apple’s catchy silhouette ad campaign, is now in heavy rotation on prime-time TV. Vertigo has topped the iTunes download charts since its debut three weeks ago.

Traditionally, exclusive agreements between online distributors and artists have been limited to a fixed period of time. When acts No Doubt and the Grateful Dead decided to sell their music online, they first made their catalogues available exclusively through iTunes before offering it through other online distributors. The Rolling Stones sold their songs with RealNetworks in August 2003 before taking their material other outlets.

This summer, an early version of How To Dismantle An Atomic Bomb was lost by The Edge during a photo shoot in the south of France. Bono later commented that the album would be released on iTunes if songs started popping up illegally on the Internet.

Sales of the iPod, which debuted in 2001, have meant big business for Apple lately. The company sold 2 million of the players in its fiscal fourth quarter, ended September 25, helping to double the company’s profits and increase revenues 37% to $2.35 billion over 2003’s fourth quarter. Rumors of new versions of the iPod, including one with a colored screen, have been surfacing in recent months.

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