April 12, 2003
Apple up to Something Big
Rumors that Apple is negotiating to buy Universal Record from Vivendi circulated across the web yesterday. At first, this sounds like strange bedfellows. This rumor, along with Apple's upcoming download service that's supposed to launch at the end of the month and the next generation iPods really could push Apple to the leading edge of the music industry. Maybe Apple's onto something...
While Apple has supposedly gotten a good response from the major labels to this new service in part because the fact it'll initially only be available to Mac users (only 3% of the computer population), Apple's pursuit of Universal means that they would have a 100% committed label as part of the new service in case the others get cold feet or want to back out early on.
Such a service needs content to succeed, and depending on the labels is a risky proposition because there is an obvious disconnect between what the major labels are willing to offer, what music consumers want and what the artists deserve. I believe that the rise of Napster, iMesh et al was due to this fact. But rather than respond by offering the consumers what they wanted, the labels decided to go on the defensive, blasting the mp3 format and blaming music sales decreases on illegal file swapping. And now Apple may just have positioned itself to become the hub of digitally distributed music, giving music consumers, artists, and the labels what they want accessed through their iTunes software.
iTunes is part of Apple's iLife software suite. They've been positioning their products, at least when targeting home comsumers, as the digital media hub.
Apple is beginning to grasp how different technologies are finally converging in ways that are easy to use and make sense. It used to be that a camera interacted with film and the drugstore. Your stereo interacted with cassettes and CDs. Your video camera with the VCR and TV. Each their own little domain.
But its changing, and Apple's bringing it all together. They're not going to take your vacation pictures of videotape your family events, because that's personal to you. But they can provide the music and movie content pipeline!
How long before we see iTunes servers connected to our home stereos and serving up music to our iPods, iCar and who knows what else. And then it could replicate it all with movies. Could digital entertainment be the killer app that brings Apple to the forefront of the consumer market again?
Apple may just be positioning itself as the next great home entertainment electronics company. Apple is known for their product design and ease of use, both common compaints with many current home electronics. Combine these qualities with the newly emerging digital entertainment formats, and Apple could well be poise to become the next Sony.