Apple previews iPhone 5 and iTunes revamp – but no iStream

By | Published on Thursday 13 September 2012


Given that the excitement that has traditionally surrounded Apple product launches seems to be waning outside the core gadget-geek community, I wonder if this will be the last iPhone launch that grabs headlines in the music world. Of course the customary rumours of an iTunes streaming service about to launch help raise anticipation in music business circles each time Apple boss Tim Cook takes to the stage, even though you’d think iGossipers had long since cried wolf on that one.

Anyway, the iPhone 5 was debuted at a press event in San Francisco yesterday. It’s 20% lighter than its predecessors, has a bigger and better display, ultra-fast wireless technology, improved battery life, an enhanced camera and expanded iCloud and Facebook integration. It’s the “thinnest smartphone in the world”, apparently, with a lovely maps widget offering turn-by-turn navigation and a ‘passbook’ thing for managing tickets, vouchers and store cards. Oh, and the Siri voice support thingimy will tell you who won the football.

Pre-orders will be taken for the new Apple smartphone from Friday, with the first devices expected to ship on 21 Sep. It looks likely that the device will be quite a bit more expensive in the UK than the US, initially at least, with talk of a £529 price-point, presumably for the highest capacity model, which will sell for $399 in the US. Obviously some networks may offer better deals if locked to a contract.

In terms of British tel cos, EE, the all new brand from Everything Everywhere, which owns the Orange and T-Mobile networks in the UK, will offer the new iPhone as it starts to roll out its new all-singing, all-dancing 4G mobile network. Though those who prefer the third generation mobile internet will be able to use their iPhone on the existing Orange and T-Mo networks (which will continue to operate under those brands for the time being).

The logo map shown at the Apple launch event yesterday implied that O2 was the only other UK network that would have the iPhone 5 at launch, alongside the EE networks, though both Vodafone and Three have since said they’ll also start selling the new Apple smartphone soon too.

Although the iPhone 5 was the headline announcement, Apple previewed a range of other product updates yesterday as well, including a pretty major revamp of its iTunes software and store (mainly changing look and feel), though the mooted streaming music service – rumoured to be in development so many times in the last few years – was not part of the overhaul.

Just rumour of a supposed Apple-owned streaming music platform was enough to cause the share price of US streaming service Pandora to wobble last week, even though there has never been any apparent appetite to launch such a thing amongst the Apple top guard. The logic employed by iStream-will-arrive-eventually speculators is that ultimately so called ‘access-based services’, rather than iTunes-style ‘ownership-based services’, will dominate in digital content, and that Apple will therefore have to move into that space eventually to maintain iTunes’ market-leader status in digital music and media.

Though, of course, launching a subscription-based streaming service is expensive and risky, even if you can use your market dominance in the downloads market to avoid paying the big music companies large advances. All existing streaming services have launched with a ‘loss-leader’ business model, and most (if not all) are still operating that model. And while Apple may have been an early pioneer in digital music, it has never been that keen on committing its own money (beyond investments in the technology) to get music services off the ground.

And iTunes was always intended to be a means-to-an-end, to provide the content that would motivate consumers to buy an iPod. And while it’s proven to be a rather lucrative means-to-an-end, and Cook may claim that “music is deeply embedded in our DNA”, Apple has never aspired to be a digital content company per se. If subscription-based access platforms are the future, you suspect Apple would rather ensure other people’s subscription content ventures work best in iOS, so that content fans are drawn to its premium-priced devices, but without taking the risk of launching its own proprietary service. And, of course, it can take a cut of the sale of those third-party streaming services via its app store.

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