But I have a question: Whatever happened to eMusic’s search for a new CEO?

David Pakman, who ran the company since 2005, left last fall to join Venrock, the Rockefeller family’s venture capital arm. Last I heard, in late October, the company was “looking at a handful of very qualified candidates” to replace him. And in the meantime, eMusic Chairman Danny Stein–who runs the investment company that owns eMusic and who ran eMusic himself prior to Pakman–was serving as interim CEO.

So who’s the new boss? Same as the old boss. It’s also old news.

Stein says that’s he’s going to run the company for the foreseeable future, and that he figured that out way back in December: He just never announced it. “It was an easy decision to make”, he says.

Stein says he saw plenty of “very capable people”  but figures, a la Dick Cheney, that he was the right man for the job. He also says that the various headhunting companies who say they’re helping eMusic find a new CEO are doing so without his knowledge (or dollars).

Fair enough! The bigger question, as it has been for many years, is how eMusic fits into the larger digital music ecosystem. It sells DRM-free MP3 downloads, which some consumers like, via a subscription service, which most consumers don’t enjoy. Stein says the company has around 400,000 subscribers, and that that number has remained stready for a while. But he says his topline revenue still grew 40 percent last year, to $70 million. (No word on profits or lack thereof).

That’s a pittance compared to Apple’s iTunes (AAPL)  store, which moves about $2 billion worth of songs every year. And while eMusic was once a couple of signatures away from selling to Amazon (AMZN), that window looks like it’s closed, as the retailer launched its own MP3 store a year ago.

But perhaps there’s still an M&A opportunity for eMusic for a different retailer that wants to get into digital goods; Best Buy (BBY) did something similar when it bought up Napster last year.

But COO (and temporary CEO) Tim Cook’s dismissal of the netbook market will continue to spark speculation that the company is readying something that sits in between a laptop and an iPhone (which is itself a computer, of course). Silicon Alley Insider’s Dan Frommer got more of Cook’s response than I did so I’ll reprint his quote here:

“When I look at what is being sold in the netbook space today, I see cramped keyboards, terrible software, junky hardware, very small screens, and just not a consumer experience and not something we would put the Mac brand on. So it’s not a space–as it exists today–that we’re interested in, nor do we believe that customers in the long term would be interested in. That said, we do look at the space and are interested in how customers respond to it. People who want a small computer than does browsing and email might want to buy an iPod touch or iPhone. We play indirect basis. Then of course if we find a way where we can deliver an innovative product that really makes a contribution, then we’ll do that. We have some interesting ideas in this space.”

EARLIER:

Apple (AAPL) just turned in a strong quarter and followed it up with conservative guidance. A fairly typical performance for the company. Now investors will want to know about new product lines, Steve Jobs’s health and other matters. I’ll be covering the call live. Please refresh this page for the most current information. Click here if you want to listen in yourself.

Joining call now. Tim Cook CFO Peter Oppenheimer going over info that’s already in the release.

Mac products: 2.2 million Macs, a three percent decline year-to-year. Tough comparison from last year. But better than the seven percent drop in PC sales overall. “We feel very positive about our Mac performance.” Began and ended quarter with three-to-four weeks of Mac inventory.

iPod: People still buying ‘em! iPod touch selling well, and so are apps. Claims people like the new shuffle player. [Dubious about that]. We own the MP3 player market. [Duh.] Began and ended the quarter with four-to-six weeks of inventory.

iTunes store: 35,000 apps available in store, up from 15,000 a quarter ago. “We are within hours” of one billions app downloaded.

iPhones: Unless I’m missing something, absolutely no new data here. Praising new iPhone 0S 3.0 that’s in the works. Apple delayed the start of revenue recognition of all iPhones sold after the company announced the new OS, which was March 17. Will start up again once OS is released.

Stores: Half our Macs sold to people who had never owned one before. Average revenue per store is down year over year, because the economy is lousy.

Gross margins: Commodity and other component costs lower than expected. Higher-margin sales better are also than expected. Apple also spent less on operating expenses than expected.

Guidance: Forecasting is “challenging” in macroenvironment. Again, noting delay in revenue recognition for iPhones (see above). Excited about new products in pipeline, etc.

Q&A

Outlook for pricing on component supply? Mostly favorable, but some commodities, like NAND, will increase sequentially. Cook does not expect to see the level of reduction seen in calendar Q1. Will it be down? It will be “in a similar range as last quarter.”

Cash flow issues? Not really, for several reasons: 1) Apple made prepayment to…. [sorry, I didn't catch who that was]; 2) accounts payable were down, from holiday quarter to spring quarter, which is standard; 3) at $1.3 billion, tax payments were up “significantly” from last year.

Mac business: Desktops selling well, but average selling price down quite a bit. What’s going on? Sales accelerated in March after Apple announced new product launch. Higher-end Pro products sold to professionals are down a bit, which is related to economy for obvious reasons. Education sales also down a bit, for same reasons. Hoping Federal stimulus funds will help with that.

Back to netbooks–why won’t Apple sell them? Cook is still criticizing netbooks. The ones available today are ”just not a consumer experience and not something we would put the Mac brand on, quite frankly. It’s not a space today that we’re interested in, and it’s not a space we think that customers in the long-term are interested in.” But… a slight hedge with regard to smaller computers, which are, of course, what the iPhone and iPod Touch are. We “have interesting ideas in this space.” Today’s netbooks really shouldn’t even be called computers, really.

App store: What’s the mix between paid and free downloads and the iPod and iTouch mix? Nope. Apple won’t say. Again, Cook notes that we’re just “hours away” from the one billionth download. Cook: One of the keys behind the growth of iPod has been that sales of the iPod touch “more than doubled year-over-year.” The iPod and iPod Touch have reached sales of 37 million units, a big platform for developers. So there’s a virtuous cycle there.

[Sorry, missed two questions here.]

Why is Apple still doing an exclusive with AT&T for the iPhone? And how’s Steve Jobs? AT&T (T) is the best wireless provider in the U.S. “They have done a very good job with iPhone….We’re very happy with the relationship we have and do not intend to change it.” Structurally, we’re using GSM architecture, and Verizon (VZ) uses CDMA, and we wanted a world phone.

And Steve Jobs? Apple CFO Peter Oppenheimer: “We look forward to Steve returning to Apple at the end of June.” [Translation: No news.]

[Yet another question missing here. Apologies.]

Any info on DRM-free/”iTunes plus” sales? Too early to tell.

How much impact did Wal-Mart (WMT) have on Apple sales? Very key partner for the iPod. The company believes Wal-Mart provides extended reach. Pleased with results, but “early going, and not much to report there yet.”

So many iPhone Apps. How can you make them easier to find on iTunes? (Same problem as music.) Any kind of unusual patterns? Nonanswer here.

Please talk about competition for smartphones–i.e., please discuss the Palm (PALM) Pre. “Difficult to comment on products that aren’t shipping. So there’s nothing intelligent I could say on the Pre.” But “we think we’re years ahead.” We see things through software lens and that has benefited us and customers very well. Power of device and ecosystem enormous and we’re now just scratching the surface.”

What about suing Palm re: patents on the Pre, etc.? “We think that Apple’s innovation is leading the industry by years. We think competition is great; we think it makes all of us better as long as other companies invent their own stuff.”

If you view Amazon’s MP3 store as a would-be iTunes-killer, or even a would-be iTunes rival, it has failed miserably. Neither Amazon (AMZN) nor its big label partners–Warner Music Group (WMG), EMI Music Group, Sony (SNE) and Universal Music Group–is publicly releasing any sales numbers. But the best estimates I’ve been able to get from label executives give Amazon 5-to-10 percent of the digital music market, with Apple (AAPL) hanging on to its 70+ percent share.

Billboard reaches the same conclusion, pegging Amazon’s market share at eight percent. Lucas Gonze, a smart digital music guy who spent a brief stint at Yahoo (YHOO) after it acquired his start-up, does some back-of-the-envelope math and concludes that Amazon’s store contributed all of $82 million to the music business, and that Universal collected most of that. That same math means that Amazon grossed all of $39 million from its music store.

And while Amazon’s presence–and the fact that all of its music was sold as MP3s, meaning there were no DRM locks on the songs–was supposed to give the labels more leverage when they negotiated with Apple, we have yet to see Steve Jobs make any significant changes in his contracts.

But the labels would still rather have Amazon in the game. The fact that the world’s biggest e-commerce company is in the music business does have some tangible benefits, like giving players an easy way to get into the music business: Both News Corp.’s (NWS) MySpace and T-Mobile’s new G1/Google (GOOG) phone, for instance, use Amazon to sell downloads. There’s no way Apple would have worked with either platform.

And Amazon can afford to lose money as it figures out its digital media strategy–the company logged nearly $4.3 billion in sales last quarter alone. Right now, it seems content to serve a handful of dedicated MP3 fans/anti-DRM zealots who are actively shunning Apple. But I’m guessing Jeff Bezos and crew have bigger ambitions. So when do we see what those look like?

The details, from MusicWeek (via Coolfer): You give the company 100 British pounds, and for the next year you can download all the music you want. And because you’re downloading the files in the unencrypted MP3 format, they are yours to keep, and yours to do whatever you want with: Play them on any Apple (AAPL) iPod or iPhone, make copies, burn them to CDs, etc.

Are there catches? Of course: The offer is only available to U.K. residents, who have to use a special USB dongle to make the Datz software work, and it only works on PCs running Microsoft’s (MSFT) Windows, for now. Most crucially, the company only has music from two of the big four music labels–EMI and Warner Music Group (WMG)–and it doesn’t even have all of those companies’ new releases, but a “wide selection of new music released in 2009.”

But play along, for just a minute. Say Datz does end up striking deals with Sony (SNE) and Universal Music Group (and the other big indies), and does end up getting most of the majors’ catalogs. And say Datz is still able to keep the price point about the same: Something in the $15 a month range for unlimited music to own. Could that work, from both a consumer and industry perspective?

Yes. It could.

That’s around the same price point as music subscription services offered by RealNetworks’ (RNWK) Rhapsody and Napster’s (NAPS)/Best Buy’s (BBY) Napster.com. The big difference: Those services only give you access to music, not ownership. And while I’m not hung up on owning music as long as I can get what I want when I want, I’m in the minority on this one.

But if you could hang on to your music–and not have to worry about what format you’re using, since MP3s will work on all formats–then that seems like a compelling offer. The thought of shelling out $162 in advance will likely give people pause, but presumably Datz could figure out a way to extract the payments, à la the mobile carriers, over a one-year period.

Meanwhile, $162 a year is much, much more than most people were ever spending on CDs, even during the format’s boom years. And those, obviously, are long gone. Today the industry would be pleased if the average consumer spent $20 a year on music, no matter what format it’s in.

And yes, we know what many of you are going to say: Why pay for music at all when I can steal whatever I want? Or the faux-sophisticated alternate version: Music should be free! Because it can be replicated for no marginal cost!

Well, can’t argue with that–unless you’re in favor of compensating people who create intellectual property for their work. And I’m one of those old-fashioned types who still thinks that’s a good idea. Hope Datz can pull this off.

Yet another digital company is cutting back: eMusic, the digital music subscription service, is firing “about 10 percent” of its 100-person staff, the company says.

eMusic explains the cut by offering what has become a stock answer–things aren’t terrible, but the company is bracing for a slowdown and is cutting now so it can avoid doing it later.

But eMusic chair Danny Stein, who runs the firm’s parent company, JDS Capital Management, offers some additional color: The specific problem the company is seeing is with its 2,000 retail partners–either chains like Best Buy (BBY) or electronics companies that were bundling eMusic offers with their products.

Those companies are cutting back shipments and reporting slower sales, which has been cutting into  eMusic’s subscription business in the second half of the year, he says. But traffic to eMusic.com has remained consistent and the company will still be able to report 40 percent revenue growth by the end of the year.

“We are expecting to grow, but we’re going grow slower than we’d hoped,” Stein says. So what about next year? “Good question. Definitely double digits.”

Stein says the company may also consider lowering prices for its subscription offering ($11.99 for 30 MP3 downloads a month), but that for now, “we’re comfortable with our pricing.”

The cutbacks come just a few weeks after CEO David Pakman announced that he was leaving to join Venrock, the VC arm of the Rockefeller family.

Spokeswoman Cathy Nevins says the eMusic is looking at a “handful of very qualified candidates” as a replacement.