Bosses at iPod maker Apple have struck a preliminary deal to settle legal action brought by shareholders over the company’s stock option scheme.

Shareholders alleged that bosses, including chief executive Steve Jobs, had damaged the firm over their handling of Apple’s share options.

As part of the settlement, insurers representing Apple will pay the computer maker $14m (£8m).

The firm will then pay the plaintiffs’ lawyers’ fees and expenses.

The deal ends a series of lawsuits over the firm’s stock incentives.

Apple’s board has also agreed to reform part of its stock option plan.

Caught out

The action alleged that executives, including chief executive Steve Jobs, chief financial officer Peter Oppenheimer and the former chief financial officer Fred Anderson, had illegally backdated stock options.

Backdating was a common practice among high-tech companies to boost pay and retain staff.

The practice lowers the exercise price of a stock option, so when the options are cashed in employees reap greater profits.

And it is not illegal, as long as the company audits the process correctly.

Apple is the highest profile of more than 150 companies caught out by share option schemes granted at the height of the technology boom at the start of the decade.

The Securities and Exchange Commission (SEC) launched an investigation into Apple’s stock options two years ago when the firm admitted it had backdated 6,428 sets of options between 1997 and 2002 – that included 7.5 million options for Mr Jobs.

That forced Apple to restate 10 years of accounts and reduce its reported profits by $84m.

The latest settlement closes the chapter on state and federal investigations into Apple’s share incentive scheme.

Last month, a former lawyer at Apple agreed to pay $2.2m to settle charges that she altered records to hide illegally backdated options granted to Apple bosses, including Mr Jobs.

The multi-million dollar settlement is set to get final approval on 31 October.

News reported by The BBC

Apple has unveiled the latest version of its iPod Nano, featuring what it says are the thinnest measurements yet.

The fourth generation Nano was launched at a US press conference by Apple chief Steve Jobs, who announced new shuffle and library features.

He also listed the Nano’s environmental credentials, including arsenic-free glass and a mercury and PVC-free body that is “highly recyclable”.

The Nanos are expected to sell in the UK for £109 ($191) for the 8GB version.

The 16GB version will retail at £149.

Speaking live in San Francisco, Mr Jobs unveiled Apple’s new Genius function which allows users to create automatic playlists from the iPod’s library with the click of a button.

He said the function worked by taking one song and creating a playlist based on the user’s song library and could also suggest other tracks the user might want to buy.

Mr Jobs described the new Nano as “highly recyclable”

Mr Jobs said the new Nano also had a “shake to shuffle” mode, which sends the gadget to shuffle mode with the flick of a wrist allowing you to go backwards and forwards on your playlist.

‘Lots of fun’

The Apple chief executive officer said the company had sold more than 160 million iPods since its introduction seven years ago.

An updated iPod Touch – the closest cousin to the iPhone – was also announced at the event.

It is thinner than previous models and has integrated volume controls and a built-in speaker for “casual listening” and will also include the Genius function.

New software for the iPhone – which will be available free to all users – would “fix a lot of bugs” including dropped calls and connection problems reported by customers.

Mr Jobs said: “We’re really, really excited about all these products. We think people are going to have a lot of fun.”

Rocks the house?

The Apple announcement was much touted on the blogosphere for days leading up to the launch with plenty of speculation about what would be unveiled.

Gizmodo’s Jesus Dias was not disappointed and said “iPod touch second generation rocks our socks off.”

However Craig Grannell of Cult of Mac said “Fairly modest expectations were barely met and all we got were skinny things we already knew about anyway.”

Instead of picking a few colours, Jobs said they decided to pick every colour

Apple co-founder Steve Wozniak told the BBC that this line up of new products did not deliver the way the company has in the past.

“I don’t like to sound like I am putting products down. I like new pieces of hardware and I didn’t think it was the biggest one of all time for Apple.

“But then we don’t present like we do at our Mac World Expo. Some of our introductions are weaker than others and we didn’t really expect an awful lot from today.”

Wall Street’s reaction was also fairly lacklustre with Apple’s share price actually falling more than 7 points during the course of the event from $159.64 (£90) to $152.12 (£86).

Some analysts however were more than happy with Apple’s product launch. “These are evolutionary products with some revolutionary new features,” Michael Gartenburg, vice president of Jupiter Media told the BBC.

“Apple has done it again. They have reinvented the line in a way to capture mainstream consumers’ hearts and minds and doing at a price point that is extremely affordable.”

News reported by The BBC

Apple has admitted that a battery fault had led to a small number of its first generation iPod Nanos overheating.

But it said that the problem was “rare”, occurring in 0.001% of devices sold between 2005 and 2006 adding there had been no serious injuries or damage.

The comments came after the Japanese government began investigating a possible battery defect in the Nano.

There have been two reports of the music players overheating in Tokyo, scorching nearby paper.

Economy, Trade and Industry ministry official Hiroyuki Yoshitsune said the government was in touch with Apple to investigate the defect.

Battery problems

Apple said the overheating problem, which could lead to the iPod failing to work and being damaged, could be traced to a single battery supplier.

“There have been no reports of serious injuries or property damage, and no reports of incidents for any other iPod Nano model,” it said.

Any customer worried about their device, bought between September 2005 and December 2006, should contact customer services, Apple added.

Lithium-ion batteries, which are used in iPods, have been blamed for a series of fires in laptops, which resulted in global recalls.

In 2006, Apple was forced to recall some 1.8 million lithium-ion Sony-made laptop batteries that were prone to overheating.

News reported by The BBC