Despite challenges, Apple’s slow horse is poised to win the cloud music race

Once again, Apple is late to the party. A hot new product is taking the industry by  storm, destined to be the ‘next big thing’ and Apple stays silent, letting the other players in the market duke it out to be first on the scene.

Meanwhile, pundits and analysts begin to mutter, then cry, that Apple has missed the boat and that whatever they introduce is doomed before it even arrives.

The pattern has repeated itself many times in the modern era of Apple beginning with the iPod, then the iPhone and again with the iPad. The latest hot product is cloud music and once again, Apple has been beaten to the market by many competitors, large and small.

The two biggest examples are Amazon and Google, both of which have released cloud music products in the last couple of months, but it doesn’t stop there. There are dozens of worthy alternatives that have already been on the market for some time like Rdio, mSpot, Spotify and MOG, as well as newcomers like Earbits. Apple has a definite challenge ahead of it to differentiate its offering from an already crowded market.

As it was with the iPad, there are as many reasons for them to fail as there are for them to succeed, but Apple has the ability to leverage two major advantages that could make the difference between having another dud like MobileMe on their hands or the next iTunes.

First, Apple has a unique position in the market that allows it to be patient and the willingness to do just that. In addition, it has shown an incredible ability to make its products feel seamless to the user.

Planting flags

While the market is jam-packed with offerings that all offer their unique spin on cloud music, the two that stand to offer the greatest challenge for Apple are definitely Amazon and Google. Both are companies which have experience in the cloud arena and both have introduced products that they hope will garner them the lion’s share of the market.

Google’s Music Player beta service debuted at the Google I/O conference earlier this month and has proceeded to underwhelm much of the journalistic community with its limited feature set and disjointed interface. We definitely have not yet seen what Google Music could become if it gets the attention it needs from Google, which has a history of rolling out products in very raw form and revising them on the fly while people use them.

As it stands though, it feels very much like Google wanted to simply plant its flag in the cloud music space and was prepared to release a product missing several critical components in order to do so quickly.

The most glaring omissions from Google’s music offering is a store for users to purchase music. Without a store or a subscription service, Google’s service isn’t much more than a passive storage locker. If a user does not upload a song directly from their computer, it is not available in the cloud, period.

Because there is no store, and therefore no content, there is also no way for a user to tell Google that they have a particular song and have it instantly available to them without having to upload it, a so-called ‘active locker’ approach to cloud storage. Not only that but once you’ve uploaded a song to Google Music, you’re unable to download it back to any other device.

Uploading a song once and having it available on all of your computers and Android devices is nothing to shake a stick at, it’s a very nice feature and will probably be a great help to customers who have bought into Google’s ecosystem end-to-end. Unfortunately it, at least for now, leaves out iOS devices and other smartphones and has no native application for the desktop, requiring a browser for music playback.

Amazon introduced its Cloud Locker and Cloud Player products in March. Unlike Google, almost every move Amazon makes is focused on how to sell digital or physical goods. That’s why their cloud offering came right out of the gate with a way for people to purchase songs and play them from the cloud. With Amazon’s system, users can also upload songs from their computers but they have the added bonus of being able to transfer purchases directly into the Cloud Locker when they buy an album or song.

One flaw that the Amazon system shares with Google is the lack of an active locker. You have no way of telling Amazon that you have this or that album and having it become available to you. You must upload it or purchase it or you’re not going to be able to listen to it in the cloud. Once again, you can play your songs in a browser, including very awkwardly in Mobile Safari, or on an Android device but that’s about it. Amazon does allow you to download songs that you’ve purchased from them, but, once again, you cannot re-download songs that you’ve uploaded yourself because of licensing restrictions.

These issues make Amazon’s service, or Google’s for that matter, into what amounts to a more complicated version of wireless syncing. The desire to be first, to get out there and plant flags, has left consumers without a solid cloud option from either company.

Fourth time’s the charm

If you were looking to find a real competitor to Google and Apple in the cloud space just 2 years ago, Apple would have been on very few lists. With the disastrous launch of MobileMe, Apple had showcased just how unprepared it was to offer any kind of cloud service. It’s well documented that CEO Steve Jobs was furious, famously telling the MobileMe team “You’ve tarnished Apple’s reputation. You should hate each other for having let each other down.”

MobileMe launched with sluggish performance, billing issues, email sync problems and a general sloppiness to feature rollouts. It was far from the decisive statement Apple wanted to make about its commitment to Internet services. Less than a year after the MobileMe debacle, Apple revealed plans for a 184,000 square foot data center in North Carolina. This immediately sparked rumors that Apple was going to launch a revamped cloud service with a wide variety of dream features.

Of all Apple’s attempts to launch web services on a wide scale, only .Mac met with any type of real success and that was phased out to make way for the incoming MobileMe in 2008. MobileMe has just now started to reach some sort of maturity but a quick troll of the support forums will tell you that many people still aren’t happy with its sync performance and duplicate item handling.

Watching Apple fumble web-based products over and over has been a painful experience and a stark contrast to the string of hardware successes it has seen in the last decade. If a new cloud service is to be successful, Apple will have to pull out the stops to ensure that this effort will be one with the polish and impact that its larger-than-ever customer base has come to expect from products like the iPhone and iPad.

A little patience

In the three years since MobileMe was launched, the cloud music space has gotten absolutely red hot. In that period, Apple has been improving the MobileMe experience to very usable and well-heeled levels. It’s not the best option for cloud syncing out there but it’s definitely not the disaster it once was. The time has also given Apple a chance to put together the rest of the puzzle for a cloud music service including the aforementioned massive data center that will hold users music, along with other data that would likely be synced as part of the larger iCloud product.

In addition, the app platform has grown from zero in 2008 to 500 million apps across 50 million iOS devices. Almost all of those devices will be immediate potential customers from day 1 of whatever cloud music service Apple releases.

Apple has also been using its iTunes clout to broker licensing deals with all of the major labels to get specific permission to do what it needs to do to its customers music in order to make the process of purchasing, uploading and playing music from the cloud as seamless as possible for its users.

Seamless

In order to be a true breakout success, a cloud music service needs to fulfill some basic, but integral, parameters.

• A user should be able to play their music back on their mobile devices and computers
• A user must be able to sync their own music with the cloud
• The service should scan a user’s music collection and make that music available, with no upload necessary
• A user should to be able to download that music onto any of their devices for unconnected playback
• A user must be able to make purchases available immediately in the cloud

Both Google and Amazon offer portions of this list but not every item. Apple is uniquely positioned to be able to deliver this list of features in whole, securing the lion’s share of the cloud music landscape. Brokering individual deals with the major labels, as Apple has been doing the last few months, will allow it to offer unique options in the handling of customer’s music. Most current cloud music services use a general licensing conceit that they’re acting as a ‘radio’ to cover usage that comes with strict restrictions on what customers are allowed to do with their music.

Amazon argues that it is simply offering storage for its users that is an extension of their hard drive. This is why you must upload every song or wait for it to be copied from Amazon’s purchasing servers to your own discreet locker. This way Amazon can say that they’re just holding on to your stuff for you if the RIAA comes knocking to ask them why they aren’t getting paid for songs that users upload.

Early news about the possible shape of Apple’s cloud music service, including a report this week from Businessweek, have been coming in from sources privy to Apple’s deals with the record companies. At this point several things are likely about Apple’s music service.

You’ll be able to play back your music on any iDevice and likely any computer via iTunes. Apple actually already does this via the iTunes Home Sharing service. If you want any idea what Apple’s cloud service might look and feel like, then that is a good place to start. To gain access to all of the content on any computer equipped with iTunes, simply enable Home Sharing on any iDevice and your copy of iTunes. Then, any time you’re on the same WiFi network, all of your collection is available to you immediately, with a minimum of fuss. Simply converting iTunes Home Sharing for use over 3G would fulfill the playback requirements of a cloud music service.

You will be able to sync your music to the cloud. Apple could do this today, without any licensing, in the same manner as Amazon and Google. The way in which they do it will be significantly different from its competitors however.

Apple’s cloud music service will scan a user’s music collection and make it available with no upload. This kind of behavior is really just a modification of the way that iTunes’ Genius feature works. Genius gathers and sends tag data about your music to Apple and gets back suggestions for similar kinds of music. A simple modification could then send tagged data about all of your music and ‘unlock’ those tracks for you to play back immediately. There is an additional rumor, mentioned in that Businessweek article, that this will work even for tracks not purchased from iTunes, but I would take that with a big grain of salt.

You’ll be able to download, or cache, your music locally to your devices or other computers. This is more important for mobile devices as they frequently lose their connections to the internet when in areas of low coverage. This kind of behavior is also friendlier to the consumer in these times of limited data plans. Caching several albums onto your device before taking a trip would provide for uninterrupted playback.

You’ll be able to buy music. Of course you’ll be able to buy music from iTunes, as you always have been. You may argue that iTunes isn’t in the cloud but it actually is already. It’s a little discussed fact that the iTunes Store, both on the desktop and, yes, on iOS devices, is loaded from the web. The iTunes store on the iPhone and iPad may look native but it’s not. It’s actually a web app that gets updated remotely by Apple as it has been several times recently.

The real question is not will you be able to purchase music, it’s how. It is easy to imagine that this would be the perfect time for Apple to switch from a purely price-per-item structure to a paid subscription model. A subscription model would likely make it even easier for the labels to stomach users getting unfettered cloud access to songs that they haven’t actually uploaded there themselves.

What this all adds up to is a service that is full-featured but completely seamless. You wont have to worry if you’ve synced or haven’t, or if you have to re-purchase music from the cloud. Instead, you’ll enable the service and everything else will be completely seamless. There’s a reason that Apple doesn’t publicly list anything but the basic specifications of the iPad and iPhone. Customers by and large are not interested in how it works, they just want it to work. This is something Apple excels at.

Slow horses and fast growth

When Apple came along with the iTunes Music Store in 2003, the labels had been clawing at the online market in a futile bid to regain some sense of marketplace as CD sales began to decline sharply and mainstream music ‘sharing’ sites gave their products away free. At the time iTunes was a welcome life preserver, thrown at exactly the right moment. Apple’s entry into the cloud music market arrives at a similar critical juncture as digital media sales flatten off and subscription sales shoot upwards.

In addition Apple is more due than ever for a true success in the cloud service arena. It has three major services under its belt, with one medium-level success. It has massive amounts of cash and a massive data center. It has a completely compatible platform with an install base larger and more cohesive than any amount of Android devices Google or Amazon could muster, not to mention the obscene amount of credit card numbers Apple has on file just waiting for customers to order up their new iTunes cloud subscription.

With the iPod and iPhone, Apple proved explicitly that it could be the slow horse in the race and still take the win by a mile. With the cloud music market looking and feeling much like the music and MP3 player market of the early 2000s, Apple seems poised to take the trophy once again.