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Piper: Expect iTunes cloud, not music subscriptions, from Apple

post #1 of 65
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Apple will likely announce a cloud-based iTunes streaming service on Tuesday, but will not offer an all-you-can-eat music subscription plan, investment firm Piper Jaffray has predicted.

Analyst Gene Munster issued a note to investors Monday after Apple teased on its website that it would have an "exciting announcement" on Tuesday at 10 a.m. Eastern. He said it's "probable" that Apple will announce a cloud-based iTunes service that would allow content streaming to Internet-connected devices.

"Apple is developing a data center in Maiden, N.C. that we believe could serve as the hub for such a service," he wrote. "The company has indicated that the data center is on track to be completed by the end of (calendar year 2010) and it will begin using it by then."

Munster is not, however, convinced that Apple will announce a music subscription service this week. The company has been rumored for years to be interested in such a service for iTunes, and even as recently as October was said to be in negotiations with record labels to offer unlimited access for a monthly fee.

The announcement on Tuesday, he said, represents a buying opportunity for investors. Piper Jaffray has a $431 price target and overweight rating for AAPL stock

"With Apple's growing family of connected devices (iPhone, iPad, iPod touch, Apple TV, and Macs), it only makes sense that Apple would deliver a cloud-based media service to leverage its competitive advantage in the space: devices," Munster said. "As part of this, the new Apple TV with limited storage, a lower price, and a focus on accessing content over the Internet would fit in nicely."

The analyst also reiterated his longstanding believe that Apple is planning to introduce an Internet-connected television in the next few years. He believes an iTunes cloud-based service is just another step toward that eventual goal.
post #2 of 65
This is very possible. But I really don't find that nearly as exciting as an all you can eat music service. Apple rarely says things like "Revolutionary" or "You will not forget" unless it will change the market. A cloud service isn't really that exciting or new.
post #3 of 65
I am not sure a cloud service is that usefull today. I guess if you have a iPod touch and you have waaaaay more purchased content for it that you can use?

Syncing though iTunes for my AppleTV,MBP, iPad, iPhone seems sufficient and I cant think how I would actually use any cloud functionality, certainly not on a regular basis.

Has anyone else figured out viable use cases for a cloud based iTunes?
post #4 of 65
An iTunes cloud service would almost certainly be distributed by a CDN. I highly doubt the NC Data centre would be used for that, it will most likely be used to offer Mobile Me for free to all registered iOS users.
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post #5 of 65
Quote:
Originally Posted by DoogH View Post

This is very possible. But I really don't find that nearly as exciting as an all you can eat music service. Apple rarely says things like "Revolutionary" or "You will not forget" unless it will change the market. A cloud service isn't really that exciting or new.

I don't really get the amazingness of a cloud service. Why do I want to stream music from the cloud rather play it directly from my iPhone? I like the idea of a 'cloud inventory' so once I own something I can loose it and then re-download it. There are occasions where streaming may be useful though personally I have never had a need. If they announce a cloud based video / movie content service with a huge inventory, however, I will be very excited.
post #6 of 65
thank you for your GUESS, mr. "analyst".
post #7 of 65
Quote:
Originally Posted by markb View Post

I am not sure a cloud service is that usefull today. I guess if you have a iPod touch and you have waaaaay more purchased content for it that you can use?

Syncing though iTunes for my AppleTV,MBP, iPad, iPhone seems sufficient and I cant think how I would actually use any cloud functionality, certainly not on a regular basis.

Has anyone else figured out viable use cases for a cloud based iTunes?

Yes!

What if you had 10 gigs of songs on your iPhone and now you can get rid of them 100% because they are on the cloud. That frees up quite a bit of space for apps and would be a big deal. What if you had a bunch of movies on an iTunes cloud service. That would give you access to all your movies in your iTunes library on your iphone/AppleTV where ever you are in the world.
post #8 of 65
Quote:
Originally Posted by theguycalledtom View Post

An iTunes cloud service would almost certainly be distributed by a CDN. I highly doubt the NC Data centre would be used for that, it will most likely be used to offer Mobile Me for free to all registered iOS users.

MobileMe and future iterations of iWork. Free? That would be nice.
post #9 of 65
Quote:
The analyst also reiterated his longstanding believe that Apple is planning to introduce an Internet-connected television in the next few years. .

Not a chance.. Do people still not understand that Apple doesn't enter into mature markets? Connectivity to televisions (Apple TV) = Yes.. Televisions themselves =NO.
post #10 of 65
Quote:
Originally Posted by solsun View Post

Not a chance.. Do people still not understand that Apple doesn't enter into mature markets? Connectivity to televisions (Apple TV) = Yes.. Televisions themselves =NO.

ever hear of an iPhone?
post #11 of 65
Quote:
Originally Posted by markb View Post

Has anyone else figured out viable use cases for a cloud based iTunes?

Case 1:
I'm pretty sure that if I download a song to my iPhone, from Shazam, it is not available on my computer until I sync it back. And if I try to download the song on my iPad, without syncing the iPad to the synced iTunes, I have to buy the song again.

This is not true for apps though. If i buy an app from my iPhone, I can download it on my iPad without syncing and without paying for it again.


Case 2:
If I want to play music that I have purchased on my computer on my Apple TV, I have to have the computer on so that the Apple TV can stream it from my computer. Why not just stream it direct from iTunes so that I can put my computer to sleep and save power?
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post #12 of 65
Quote:
Originally Posted by desarc View Post

ever hear of an iPhone?

Last i checked an iPhone wasn't considered a television.
post #13 of 65
As long as they don't do any stupid "to the cloud!" commercials...
post #14 of 65
DRM free video!
post #15 of 65
I already have Pandora.. and it's free.. and on my iPhone.. done deal.

The music industry is dead anyway.
post #16 of 65
check out the logo on this blog for an apple employee...

http://blog.cocoia.com/2010/updates/


Cloud service here we come I think.
post #17 of 65
Quote:
Originally Posted by doc362 View Post

I already have Pandora.. and it's free.. and on my iPhone.. done deal.

The music industry is dead anyway.

Apple's sold billions and billions of songs in the past few years.. So i'd have to respectfully disagree with your analysis..
post #18 of 65
Quote:
Originally Posted by solsun View Post

Last i checked an iPhone wasn't considered a television.


It is not a television, but you stated, "Do people still not understand that Apple doesn't enter into mature markets?"
...the cell phone market was a mature market when Apple introduced the iPhone. Thus Apple DOES enter mature markets. Thanks and have a wonderful day.
post #19 of 65
Quote:
Originally Posted by solsun View Post

Last i checked an iPhone wasn't considered a television.

Yeah, it is a cell phone. I've heard of those before. Last I checked, it was a pretty mature market before Apple entered it. But I'm sure you'll say, iPhone started the modern smartphone market, which in my reply I say, then Apple television will be a "smart" tv. Kind of like how the current internet tv's are pretty half put together, just like smart phones were before iPhone. I think you've got to realize anything is a possibility with apple. Never say never with them. Jobs is crazy man... crazy.
post #20 of 65
Quote:
Originally Posted by RepreeThis View Post

It is not a television, but you stated, "Do people still not understand that Apple doesn't enter into mature markets?"
...the cell phone market was a mature market when Apple introduced the iPhone. Thus Apple DOES enter mature markets. Thanks and have a wonderful day.

...when the iPhone was introduced in 2007, it was a new type of device.. Sure it had a phone capabilities attached to it, but the iPhone was/is a handheld computer with internet capabilities that didn't exist before it.. The smartphone market wasn't mature then and still isn't mature today.. Most experts agree that Apple almost single-handely defined a new market with the iPhone..

Thanks, You have a good day as well
post #21 of 65
Quote:
Originally Posted by markb View Post

Has anyone else figured out viable use cases for a cloud based iTunes?

Yeah, Dropbox.

Not to mention all the cloud services we now use for syncing mail, notes, calendars, contacts, and settings.

For cloud services to work it has to be easy to forget about. It has to be part of what you expect from a service, which is why the above services work as well as they do for those that use them.

I think people are trying to expecting too much from what iTunes in the cloud would mean. It doesnt mean you wont be storing your content locally. It will not be the end of storage in iDevices. It may not even mean uploading a single song to their servers.

iTunes in the cloud would be most effective for the average user if it reads your library the way iTunes Genius does, and then links your librarys contents to a file they already have on their servers which would allow you to stream to another device that can be accessible by your account. This could mean streaming via iTunes app, or iTunes.com, or an iDevice or an AppleTV. It may only be content youve purchased via iTunes Store (perhaps legal issues) or be limited to 128kbps for legal and bandwidth reasons.
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post #22 of 65
I think I'm just missing the point of this cloud stuff. I've got loads of music on my Mac, I chuck a fair amount of that on my iPad and iPhone. I can't forsee a need to have access to the 40gb of music that I own, I just don't see how this would be a major announcement, surely most people wouldn't give a damn...
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post #23 of 65
Quote:
Originally Posted by solsun View Post

Most experts agree that Apple almost single-handely defined a new market with the iPhone..

So what's stopping them from doing this w/ tv's? Competition? Market share? Profit margins? All of these Apple has always made it work. Remember, they will charge a premium and people will pay. With that, all other things considered, it doesn't matter. As long as they make money they'll be there. The same thing could be said about laptops. Why would someone pay hundreds more for spec wise, roughly the same? Brand power, quality, looks, etc.. I could go on. I'm not saying I would want one, but again, the possibility is there.
post #24 of 65
Quote:
Originally Posted by stevetim View Post

Yes!

What if you had 10 gigs of songs on your iPhone and now you can get rid of them 100% because they are on the cloud. That frees up quite a bit of space for apps and would be a big deal. What if you had a bunch of movies on an iTunes cloud service. That would give you access to all your movies in your iTunes library on your iphone/AppleTV where ever you are in the world.

At home those songs and movies would be on my computer and I can listen to them wirelessly via wifi.

Away from the house I think I would be happy with what I have on my iPhone/iPad.

I would MUCH prefer a subscription service that matches what the Zune subscription gives me now; access to any song on the ENTIRE marketplace (versus just the 10GB I own) - which I can download to my system and device - each month PLUS 10 songs to keep each month.

That equates to 10 $1.00 songs and unlimited music. WHY can't Apple give us something similar?

This cloud/anytime access will require a hefty data plan or a reliance on finding a wifi hotspot. I neither want the expensive data plan or the need to find a Starbucks, etc. just to listen to my music floating on a cloud.
post #25 of 65
Quote:
Originally Posted by desarc View Post

thank you for your GUESS, mr. "analyst".

and thank you for your sarcasm. Not sure we could have done without it!
post #26 of 65
Quote:
Originally Posted by drewyboy View Post

Yeah, it is a cell phone. I've heard of those before. Last I checked, it was a pretty mature market before Apple entered it. But I'm sure you'll say, iPhone started the modern smartphone market, which in my reply I say, then Apple television will be a "smart" tv. Kind of like how the current internet tv's are pretty half put together, just like smart phones were before iPhone. I think you've got to realize anything is a possibility with apple. Never say never with them. Jobs is crazy man... crazy.

Sorry, but I can't have a conversation with someone who is going to change their entire post after it's been replied to..

The above message resembles nothing of what I commented on..


EDIT: I apologize.. Wrong user... Woops..
post #27 of 65
Quote:
Originally Posted by drewyboy View Post

So what's stopping them from doing this w/ tv's? Competition? Market share? Profit margins? All of these Apple has always made it work. Remember, they will charge a premium and people will pay. With that, all other things considered, it doesn't matter. As long as they make money they'll be there. The same thing could be said about laptops. Why would someone pay hundreds more for spec wise, roughly the same? Brand power, quality, looks, etc.. I could go on. I'm not saying I would want one, but again, the possibility is there.


Sure, it's possible they could re-define the flatscreen market as well, although I'm doubtful.. It is already an extremely competitive space with low margins and there is not much innovation to be done with screen technology..

Where Apple can innovate is in the delivery of traditional TV, and *that* they are doing already with Apple TV... EDIT: and their streaming services..
post #28 of 65
Quote:
Originally Posted by solsun View Post

Last i checked an iPhone wasn't considered a television.

you said "Do people still not understand that Apple doesn't enter into mature markets? "

i can't believe i have to explain this, but the Cell phone market was 35 years old when the iPhone was introduced.
post #29 of 65
Quote:
Originally Posted by desarc View Post

you said "Do people still not understand that Apple doesn't enter into mature markets? "

i can't believe i have to explain this, but the Cell phone market was 35 years old when the iPhone was introduced.


Yep and the iPhone isn't a cell phone. A Motorola RAZR was a cell phone.. The iPhone was/is a new class of handheld computer. An entirely new market.. Did you not read my reply?
post #30 of 65
definitely cloud storage.

"never forget" ... as in never lose data... because it's not stored locally.

ahh, over analyzing apple messages.
post #31 of 65
Quote:
Originally Posted by desarc View Post

you said "Do people still not understand that Apple doesn't enter into mature markets? "

i can't believe i have to explain this, but the Cell phone market was 35 years old when the iPhone was introduced.

Grouping the smartphone market segment in with the base cellphone market in regarding to maturity, and then using a 4 decade old time frame, is akin to saying the cellphone market was mature 40 years ago because phones were commonplace for many decades before it.

Apple only entered the smartphone market, not the entire cellphone market, and they did it from using the tools and skills they had mastered from their other areas of business in an expected growth pattern that made many of us wonder why they hadn’t done it sooner. On top of that, they redefined the smartphone market with something smarter which could be defined as making them the first to this new market.

The TV market offers none of those benefits to Apple. The margins are too small, the number of unit types needed interferes with Apple’s “boutique”-like setup. They can’t even get around the content owners, networks, cable or satellite companies. Hell, even Google is having issues when trying to help users find their content. Worst of all, Apple doesn’t make monitors, they’d still have to compete with those that do with a product that serves no benefit expect to placate some users who don’t want to have a very small black box next to their TV. an Apple HDTV is fail on every level.
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post #32 of 65
The day they start offering live network TV sports, news through iTunes, that would be unforgettable.

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post #33 of 65
Quote:
Originally Posted by solsun View Post

Sure, it's possible they could re-define the flatscreen market as well, although I'm doubtful.. It is already an extremely competitive space with low margins and there is not much innovation to be done with screen technology..

Where Apple can innovate is in the delivery of traditional TV, and *that* they are doing already with Apple TV... EDIT: and their streaming services..

I'm not an apple genius, no pun intended, but I could possibly see them basically offering 27" apple monitor w/ atv built in w/ some "tv" ports (hdmi, coax, digital audio out, etc). So I can see it happening, but again, personally, I'm still on the side that it seems too far a stretch from apple core business. At least at this point, I think they probably have other pressing issues to attend to before they bring a tv to the market, if they do. Remember, ecosystems is what Apple loves.
post #34 of 65
Quote:
Originally Posted by solsun View Post

Not a chance.. Do people still not understand that Apple doesn't enter into mature markets? Connectivity to televisions (Apple TV) = Yes.. Televisions themselves =NO.

Internet-connected televisions are far from a mature market. People will continue to say that Apple will never make an actual TV, then eventually, Apple will make a TV. I must admit I thought they'd have made one by now, but perhaps Apple are waiting to get some kind of all-you-can-eat contract from the studios, i.e. a subscription-TV service, before they are going to get into the TV game. We'll see…

Never say never.
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post #35 of 65
Quote:
Originally Posted by OllieWallieWhiskers View Post

definitely cloud storage.

"never forget" ... as in never lose data... because it's not stored locally.

ahh, over analyzing apple messages.

I use Orb successfully and do not need cloud based music. Unless Apple can do something about the exorbitant fees that I pay to stream music from Orb to my iPad when I am 4,000 miles from home, I'm not that deeply interested. On the other hand, if they announce an all you can eat. I'll subscribe within minutes of availability. My consumption of music, always great has multiplied because of iTunes!

And I am someone who has always said that if Apple made a toaster I would buy it.
post #36 of 65
Quote:
Originally Posted by Celco View Post

check out the logo on this blog for an apple employee...

http://blog.cocoia.com/2010/updates/


Cloud service here we come I think.

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post #37 of 65
Quote:
Originally Posted by solsun View Post

Apple's sold billions and billions of songs in the past few years.. So i'd have to respectfully disagree with your analysis..

Well, don't take my word for it. Visit CNN for a peak.
http://money.cnn.com/2010/02/02/news...usic_industry/

The music industry raked in over 14 billion dollars in 1999*. It has been in a death spiral ever since. 2009 sales clocked in at just over 6 billion. Account for inflation over 10 years on top of losing more than half your sales and I would say that qualifies as a dying industry.

*corrected from 2000
post #38 of 65
That is not true. Apple enters mature markets that are stagnant and where it thinks it can add value. I can see Apple entering the television market if it thinks it can add something desirable.

Quote:
Originally Posted by solsun View Post

Not a chance.. Do people still not understand that Apple doesn't enter into mature markets? Connectivity to televisions (Apple TV) = Yes.. Televisions themselves =NO.
post #39 of 65
Quote:
Originally Posted by desarc View Post

you said "Do people still not understand that Apple doesn't enter into mature markets? "

i can't believe i have to explain this, but the Cell phone market was 35 years old when the iPhone was introduced.

Yeah, but the smart phone market was still pretty immature, all things considered. I know they're just a branch in the cell phone market, but it's not like Apple just made another cell phone that also stored a bit of music on it.
post #40 of 65
Quote:
Originally Posted by solsun View Post

...when the iPhone was introduced in 2007, it was a new type of device.. Sure it had a phone capabilities attached to it, but the iPhone was/is a handheld computer with internet capabilities that didn't exist before it.. The smartphone market wasn't mature then and still isn't mature today.. Most experts agree that Apple almost single-handely defined a new market with the iPhone..

Thanks, You have a good day as well

i'm pretty sure [and by pretty sure, i mean abso-friggin-lutely positive] that there were phones that were handheld computers with internet capabilities that existed before the iPhone. let's refer to them as "smartphones" - maybe that term will catch on.

...do you want me to post the slide of these "smartphones" that Steve Jobs used to show the competition when he introduced the iPhone?
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