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iCloud: Winners & Losers


Today Apple made some big announcements about their desktop operating system OS X Lion and their mobile iOS 5, and most importantly the service which will more intimately bind these two: iCloud. Globally, news services will continue their iFetish and splash reports everywhere, so I’ll leave you to catch the full details elsewhere. However, the iCloud is interesting for all sorts of reasons, not least of all because Apple, Google and Amazon are all dancing around the same territory, so I thought I’d take a minute and consider who (apart from Apple, of course) are the obvious winners and losers in the wake of the iCloud announcements.

The Big Winners:

  • The Big Music Companies. Here’s Apple’s description of iMatch service, part of the iCloud:

    iTunes determines which songs in your collection are available in the iTunes Store. Any music with a match is automatically added to your iCloud library for you to listen to anytime, on any device. Since there are more than 18 million songs in the iTunes Store, most of your music is probably already in iCloud. All you have to upload is what iTunes can’t match. Which is much faster than starting from scratch. And all the music iTunes matches plays back at 256-Kbps iTunes Plus quality — even if your original copy was of lower quality.

    Those songs that iTunes can’t match may very well be unauthorised downloads, but once you’ve paid $25 to use iTunes in the cloud, you’ve got access to it on any Apple device. And where is that money going? Estimates suggest the bulk is going to the music labels, with Apple keeping their customary 30% (which might just pay for the service, but this item by itself is probably going to be making a loss, especially for people who have huge music libraries).  As Mashable note, Apple Has Just Monetized Pirated Content. The music labels are once again getting paid for ‘pirated’ music – a big win for them!

  • Twitter: iOS 5 integrates Twitter into almost everything, making Apple the Twitter OS of choice (and implicitly waving goodbye to Apple’s failed music social network, Ping). As the official Twitter blog celebrates: “Building Twitter into iOS 5 truly creates the easiest way to share everything that’s happening in your world. Take a picture, tap “Tweet”. Tweeting has never been simpler.”
  • And, of course, “The Cloud”: while the cloud and cloud computing are nebulous terms, Sony’s recent PlayStation Network hacks have really dampened the reputation of web-based storage and services, especially in terms of security. Now that Apple have stuck and ‘i’ in front of the cloud, Steve Jobs’ “it just works” magic will no doubt ensure the cloud stays cool and secure (even their brushed metal iCloud logo emphasises strength and security).

The Big Losers:

  • PC manufacturers and Microsoft: iOS 5, and the cloud-based services, will all be available on Apple devices (iPhones, iPads ,touchscreen iPods) without needing to connect to a PC. These devices can now be activated on their own terms, working using cloud services, and for many people may do away with the need for a PC altogether. A big plus for Apple hardware sales, but a really clear slap in the face to standard PC manufacturers. I wonder, though, if this will force PC makers to form more robust alliances with Google (or maybe Amazon) to keep a competitive edge? Perhaps PC manufacturers will suddenly be falling over themselves to create Chromebooks. None of this will help Microsoft, because these conversations don’t involve anyone needing to run Windows anymore!
  • Amazon/Google: Apple is almost certainly running iMatch and the iTunes in the cloud services  as a loss-leader (ie making little or no profit), using these services to drive hardware sales. Google and Amazon have both been trying to carve out the same cloud-based music sharing (and other services) but don’t have the core hardware sales business to offset the cost of keeping the music labels on side.  It’s hard to see how they’ll compete without having to at least match Apple’s costs and security imperatives.
  • Point’n’click camera manufacturers: a smaller change in iOS 5, but a big one of you rely on your iPhone for photography, is that you can go straight to the iPhone camera from the locked phone in one click. This makes photography a lot easier, and avoids the clicks through the navigation screens. This does seems a small change, but for many folks the only reason to carry a point’n’click camera and an iPhone was that the camera could get to the point of actually taking a shot faster – it really doesn’t look like that’ll be the case soon.

One to watch: I’m really curious how Apple’s End User License Agreements will shape the iCloud. If users are really going to rely on Apple to make mp3s available via the cloud, regardless of whether there is any evidence of a legal purchase or otherwise, Apple will own an vast and important database of what people actually possess. While the big music labels are implicitly supporting the iCloud and iMatch service for now, what happens if the relationship sours? How will Apple react to lawsuits demanding individually identifiable information, especially, say, for music which is leaked or not legally available in one country or another? Even the date of access would be enough to show unauthorized file-sharing  in action and do we really trust Apple to be a custodian of that information? (For those interested in this issue, you should really read Jonathan Zittrain’s The Future of the Internet and How to Stop It.)

Ping: It Just Doesn’t Work


Amongst the hoppla about Apple’s revamped-once-more iPod updates this week, something slightly different emerged: Steve Jobs announced the release of Apple’s new music-based social network Ping. Given Apple’s reputation for designing hardware and software with the philosophy “It Just Works”, you’d imagine Ping would be worth exploring. At this stage, at least, though, you’d be wrong: as a social network, Ping is dead on arrival. Perhaps that’s because Jobs originally wanted to connect Ping with Facebook so users could populate their friend connections easily.  Apparently that hasn’t happened because Apple and Facebook have their own terms and conditions for playing in their walled gardens, and the two aren’t compatible (the New York Times is now calling the two companies ‘frenemies’).

In Dave Winer’s wrap-up of Ping, he highlights the major problems: no one’s using it yet, it’s really hard to actually find other users, it only runs in iTunes (not traditional browsers), and it’s based on your purchase history – not your listening history – with no option to add non-purchased music to your own interests. In short, Ping’s all about your iTunes store purchases; clearly Apple’s motivation is to build more interaction and recommendations between users, but unless you’re a big iTunes store purchasers, I can’t see how this service will ever ‘know’ enough about you to be useful (and, no, I wouldn’t take the trouble to list my interests even if I could now, since the only way for people to find me is to string search for names or emails). Beyond that, spammers are already moving in.

Apple have implemented pretty simple privacy controls, but given your Ping identity has to be the name associated with your iTunes Store account, it’s unclear whether anyone can use nicknames (I can’t find a way) which leads to its own privacy issues. Sure, this is the first iteration of Ping, and it’s likely to be improved, but there’s a long way to go and releasing this minimal a social network really doesn’t do Apple any favours. While Mashable suggested Ping would be the last nail in MySpace’s coffin, the amount Apple got wrong with Ping actually reminds us that MySpace really wasn’t (and for many people, isn’t) that bad! Ping: it just doesn’t work.