iCloud could help sustain iTunes’ dominance

Mark Little, principal analyst, Ovum

AUSTRALIA: Apple has held its nerve, taking its time to create a cloud-based media streaming proposition, dubbed iCloud, in the face of rival launches from both Amazon and Google.

Such nerve may well have stood Apple in good stead, allowing licensing deals to be inked and enabling existing iTunes collections to be streamed from the cloud to any Apple device without the need for laborious uploading. This compares well with Amazon’s Cloud Drive and Google’s rather lazy Beta for Music, which force users to upload their music collections all over again.

Apple does appear to be setting iCloud up to be more user friendly than Amazon’s and Google’s offering. This focus on consumer experience looks to support Apple’s continued dominance of the digital music market, but much depends on the business model chosen.

If iCloud is bundled with an unchanged MobileMe, Apple’s aged and less than successful $99 per year cloud services offering, Apple could land itself with a handicap. However, if the storage and applications available in MobileMe are significantly upgraded with other useful services, at the right price, Apple could at last be creating a cloud platform as a base from which to defend iTunes’ dominant position, not just against Amazon and Google but perhaps more importantly, against Spotify.