New Apple products, services on holiday horizon
DENVER (Billboard) - Not content to rest on its laurels, Apple has unveiled its master plan to extend its digital music dominance into the coming holiday season. Here is how the latest developments shake out.
iPOD TOUCH
What it is: A Wi-Fi-enabled, touchscreen carbon copy of the iPhone in every way except that it has no phone functionality. For the first time, users can search, browse, sample, buy and download music from the iTunes service directly from a portable device -- no computer needed. The company will release a software upgrade for the iPhone in the coming weeks to allow the same.
What it means: The company's decision to make the iTunes music store accessible via Wi-Fi marks perhaps the most significant evolution of the iPod/iTunes juggernaut since it made a Windows-compatible version of iTunes.
While iTunes remains the most popular digital music download service in the world, the average iPod owner buys only 20 songs per year. Just as sales increased after Apple made iTunes available on the PC, iTunes vice president Eddy Cue expects a similar increase by adding wireless access to the service. "The ability to discover, preview and buy anywhere you are on a mobile device with Wi-Fi will cause people to buy more music," he says.
"This is the way this stuff is supposed to work," Jupiter Research analyst Michael Gartenberg wrote on his blog. "This is not about a refresh of the products aimed at the existing market. Apple is not preaching to the choir here, they're looking to get a whole new customer into the house of worship, and that's exactly what's likely to happen this holiday season."
STARBUCKS PARTNERSHIP
What it is: Allows users accessing the iTunes store while in select Starbucks locations -- via a laptop, iPod Touch or iPhone -- to view and buy any song currently played in the store, as well as the last 10 songs. A login or access fee is not required.
What it means: Although the companies may play this up as a music discovery move, it's really about the Wi-Fi. With more than 5,800 hotspot locations, Starbucks is the largest single provider of Wi-Fi Internet access in the country. The deal gives users free access to the T-Mobile Wi-Fi network in participating Starbucks locations, meaning there is no need to log in or pay to browse the iTunes service. While only 600 Starbucks locations in New York and Seattle will support the feature when it goes live October 2, the partnership could serve to educate users on the relatively new concept of accessing iTunes via Wi-Fi -- in much the same way that the "American Idol" partnership with Cingular taught Americans how to text-message.
RINGTONE SERVICE
What it is: Allows users to create a custom ringtone from any of the 500,000 songs in the iTunes catalog approved for ringtone use, for an additional 99 cents. At press time, Warner Music Group and Sony BMG confirmed that they were providing music for the service. Sources close to the situation say Universal Music Group is not participating at this time.
What it means: Ringtones were noticeably missing from the iPhone debut this summer. While this new service fixes that problem, it's also led to complaints about consumers paying an additional fee to create a ringtone out of a song they already own -- particularly when multiple programs are available online to create ringtones out of existing files for not only the iPhone, but many other devices as well.
The service also illustrates how Apple completely owns the iPhone experience and partner AT&T doesn't, upping the stakes in an ongoing struggle between mobile phone device manufacturers and wireless operators.
Reuters/Billboard
