Starbucks to offer free iTunes access in stores
SAN FRANCISCO (Reuters) - Apple Inc and Starbucks Corp said on Wednesday they had reached a deal that will allow people to buy songs wirelessly from Apple's iTunes music store in Starbucks coffee shops without paying WiFi connection fees.
The service will debut at more than 600 Starbucks stores in New York and Seattle on October 2, the companies said, and will be expanded to other major U.S. cities later this year and next.
Through the deal, Starbucks hopes to boost both its coffee sales and its new music business, while Apple's iTunes seeks to sell more downloads. Terms were not disclosed.
Starbucks customers with either the new iPod touch just announced on Wednesday or an iPhone or a computer running iTunes will be able to navigate to the new iTunes Wi-Fi music store without paying a connection fee.
Currently, customers pay to use the Wi-Fi wireless Internet service provided by Deutsche Telekom AG's T-Mobile at Starbucks' U.S. stores.
While navigating the iTunes online store, customers will be able to see what song is playing in the Starbucks store at that moment and buy it with one click.
"We know a lot of people are going to be very happy with this new combination of coffee and iPods," Apple Chief Executive Steve Jobs said. He said the two companies had been working on the deal for more than two years.
In an interview, Starbucks Chairman Howard Schultz declined to discuss the deal except to say it is "mutually beneficial to both Apple and Starbucks."
Schultz said he expected the service to bring new customers to Starbucks -- especially users of the newest iPods.
"It is highly relevant and very cool for young people to buy these new devices, and certainly we recognize that demographic and age profile is younger than our core customer," he said.
Seattle-based Starbucks, which already had been selling CDs in its stores, earlier this year launched its own label, Hear Music. It released the latest album by Paul McCartney in June and has also signed artists such as James Taylor and Joni Mitchell.
Starbucks shares fell 28 cents, or 1 percent, to close at $27.44 on Nasdaq, and Apple shares close down $7.40, or 5 percent, at $136.76.
(Reporting by Scott Hillis and Nichola Groom)
