iPod and iTunes Go Mobile, Without a Phone

OK, here goes another Apple love-in….but Apple’s latest product announcements are impressive and warrant discussion. Take a look at Michael’s blog for a first/second take on the iPods, Julie on the ring tones and Ina on the WiFi functionality.

The event was pitched as ‘the beat goes on’ and music was at the core of all of today’s announcements. The WiFi music store on the iPod Touch is even a bigger deal than it may at first appear. Firstly, from a disruptive perspective it further undermines much of the value of mobile operator over-the-air offerings. European operators already reeling from iPhone will be thinking hard about how they can differentiate (and some will be considering the terms of their potential Apple partnerships). Besides the difficulty in honing the consumer proposition differentiation, it trumps one of the operators’ key value adds for the music industry i.e. impulse purchasing. The Starbucks tie-in takes that to another level. And, as Jobs cheekily noted, WiFi broadband is faster than 2, 2.5 and 3G mobile networks. So no need to offer low quality small files or dual delivery. This of course is the same route Nokia are pursuing but Apple have advantage of the functionality integrated into a dedicated media device and a best-of-breed a la carte download store.

But the WiFi store functionality is also so key in the iPod because of a subtle but crucial shift in focus of the device. Until now the debate had been between dedicated devices (e.g. iPods) versus multifunction devices (e.g. multi media mobile phones). Now that debate has shifted to dedicated-multifunction media devices (?!) versus phones that try to do many things as well as being a phone. The iPod touch is all about music and thus the music functionality is second to none. But because it isn’t trying to be a phone it also does a really good job of being a web browser, photo album and video player. This device removes the previous artificial separations of music playback, discovery and purchase, but unlike mobile phones it enables consumers to conduct all of those activities as rich experiences without any deterioration in quality of service in order to optimise for device and network.

It is perhaps a sad reflection on the state of the music industry that a technology company partnering with a coffee shop chain can be viewed as a genuinely exciting incremental spend opportunity. But the music industry has moved on, and music buyers are increasingly less likely to spend time pouring over the shelves in a high street music shop. So the industry needs to get to consumers at the moment they discover music. The mobile industry has been promising to fulfil that need for some time but has thus far failed to deliver in any meaningful way. Now Apple has a realistic opportunity to succeed where the mobile phone marketplace has not (yet).