Tags: Apple ecosystem, Apple Inc., Facebook Inc., iCloud, iTunes, iTunes revamp, Nasdaq: AAPL, Nasdaq: FB

iTunes Revamp Will Fortify Apple (Nasdaq: AAPL) Ecosystem

By , Associate Editor, Money Morning • @DavidGZeiler •

A major revamp of its catch-all iTunes software will strengthen the already formidable Apple Inc. (Nasdaq: AAPL) ecosystem.

"People with direct knowledge of the matter" confirmed to Bloomberg News last week that Apple's biggest overhaul to iTunes since 2009 will appear before the end of the year.

According to the Bloomberg report, changes include the addition of music sharing features, better integration with Apple's iCloud remote storage service, and easier ways to discover new apps, music, and movies.

The upgrade is long overdue.

Launched as a mere music jukebox in 2001, iTunes has gradually added chores like media content management, an online store and syncing. As a result, it's evolved into a Frankenstein that fails to uphold Apple's legendary ease-of-use ideal.

"At some point, you've got to sit down and say, 'How do we create a really good, easy experience for consumers that doesn't involve them wading through endless tabs and subsections of the site," Carl Howe, research director at theYankee Group, told MacNewsWorld.

Although the iTunes Store generates a relatively small portion of Apple's overall revenue -$1.9 billion out a total of $39.2 billion in the March quarter - the software is a main ingredient of the glue that holds the Apple ecosystem together.

An iTunes revamp will tidy up the cluttered ecosystem that helps drive sales of iPhones, iPads and Macs - AAPL's real revenue generators.

With that in mind, it's also easy to see the iTunes overhaul as a defensive move.

It's surely no coincidence that the Bloomberg story appeared mere minutes after Google Inc. (Nasdaq: GOOG) announced an upgrade to the Android ecosystem. The Google Play store added movies, TV shows and magazine subscriptions - just like the iTunes Store.

What to Expect from an iTunes Revamp

While the details remain veiled in secrecy, the recent leaks offer several clues about what Apple has in mind for iTunes.

For one thing, it's clear that Apple intends to leverage its investment in iCloud to make iTunes better.

Many users may not realize it, but iCloud is already a big part of iTunes. For example, you can set your preferences so that downloading a song or app on one device, like an iPhone, automatically puts it on your other connected devices.

"iCloud is critically important for Apple moving forward," IDCanalyst Bob O'Donnell told MacNewsWorld. "Integration between iTunes and iCloud is OK now, but not great. So it makes perfect sense to pull those pieces together and make the sharing of media files as easy as it is with documents in iCloud."

The iTunes revamp is expected to use iCloud to simplify content management issues -- perhaps iTunes' greatest weakness.

The next version of iTunes will be more social, probably with some sort of music-sharing ability through integration with Facebook Inc. (Nasdaq: FB) and Twitter.

"That social side is one of the more compelling things that can be done going forward because it adds another layer of discoverability to the store," Ben Bajarin, a principal withCreative Strategies, told MacNewsWorld.

Being able to find stuff - discoverability - is another well-known iTunes Store shortcoming. In addition to the social component, Apple plans to add new search technology from its February acquisition of startup Chomp Inc.

One long-desired feature -- an Apple-branded music subscription service along the lines of Spotify - probably won't appear in the iTunes revamp, according to Bloomberg's sources.

New Apps to Help iTunes

As for its role as a Jack-of-all-trades, iTunes will get some relief. Separate apps will now take on some of iTunes' duties. While details of these apps were not disclosed, a look at the iPad reveals some likely possibilities.

Several apps on the iPad already split up the functions of the desktop version of iTunes. Yes, the iTunes app is still there to buy and manage music, movies and TV shows. But there's also a Music app just to play music; an App Store app for software; iBooks to buy, store and read books; and the newly released Podcast to manage and listen to podcasts.

While there's always risk in overhauling any product, Apple has an opportunity with iTunes to vastly improve the customer experience while binding the parts of its ecosystem even more tightly.

Most Apple customers recognize iTunes as the weakest link in that ecosystem and have been eager for a revamp for a long time.

"The iTunes we've all come to know has had a good run, but it's reached the point where it is a crazy agglomeration of features and functionality," wrote Macworld editorial director Jason Snell in an April commentary. "When it comes to hardware, Apple is bold in replacing popular old products with something new that's different, but better. It's time for the company to do the same with iTunes."

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About the Author

Browse David's articles |

David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.

Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.

Dave has a BA in English and Mass Communications from Loyola University Maryland.

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