Many speculated that Apple might use its September event to roll out a fully cloud-based music service. Indeed, I’ve noted previously that the iTunes interface took on a decidedly more Web-like appearance with iTunes 9, and the acquisition of Lala by Apple hinted that Apple might move further in that direction.
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Tags: Apple, Apple TV, iPhone, iPod Touch, itunes, Lala, Ping, Zune
Consumer Technology, Entertainment | Ross Rubin, Executive Director, Industry Analysis | 
September 2, 2010 3:09 pm | 
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Those of us in retail and consumer marketing are often confronted with this truism. And while consumers are the ones plunking down their hard earned money on the latest (or cheapest) tech gadget, we in the business often think we know what the consumer wants better than the consumer does. Sometimes we are right, and then sometimes we are wrong. And the best companies move to take advantage of that customer feedback and can accept that sometimes their initial marketing or sales tactics missed the mark.
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Apple just finished introducing their latest product; the iPad. Small, slick, typically great looking, and well priced at $499 it is an interesting, but ultimately not breakthrough device. In fact it reminds one very much of a netbook. A companion device to your main computer (or iPod in this case) that allows you to have a more focused web experience and a more media-centric device at a lower price, which is much of what the netbook is evolving towards.
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Given all the outlandish rumors circulating around Apple’s forthcoming announcement on Wednesday, you probably wouldn’t be surprised to hear that the purported Apple tablet can become transparent and levitate. Indeed, it is otherwise difficult to explain how the device was able to hover above the CES show floor, invisible to everyone’s eyes but prominent in everyone’s imagination.
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With such relatively minor updates as new color options for the button-less iPod shuffle, and stronger 3D performance for the iPod touch, Apple may have simply tuned the transmission of the iPod hardware lineup at its annual music update last week, but it was pedal to the metal when it came to greasing the wheels of digital commerce for media and applications. The changes included:
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Apple is announcing perhaps the most significant change in iTunes since the company began to offer video downloads several years ago. Today Apple will unlock the digital rights management (DRM) protections that place certain limits on copying and interoperability of music purchased through iTunes. Apple also plans to improve the quality of its music files, and it will also add variable pricing for songs.
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Citing the success of its Web site and retail stores as opportunities to market its products, Apple announced yesterday that this would be its last Macworld Expo, one of the few technology trade shows open to the public. SVP of Worldwide Marketing Phil Schiller will deliver the final Macworld Expo keynote. Given the company’s proclivity to own its customer experience, the move was not surprising. For years, Steve Jobs foreshadowed the waning days of his own keynotes by talking about how many more people were coming to its stores than attending Macworld Expo.
However, it’s not simply the raw floor traffic and greater scheduling and geographic availability of Apple stores that has likely led the company to abandon its once-biannual homecoming, it’s the quality of interactions it has there. Its Fifth Avenue flagship store in New York, for example, is programmed like a cable network — an unending series of seminars and support sessions that provide opportunities to educate consumers about Apple and third-party products sold at the stores. And at both its physical stores and its Web site, Apple has a more direct path to monetization that it has within the walls of Moscone Center (even with its Market Street store just a few blocks away).
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Apple creating a stripped-down $99 iPhone for Walmart would be more than just counter to the way that technology products, particularly cell phones, usually proceed in the market. It would be an unprecedented move for modern-day Apple, which has avoided retailer-exclusive SKUs except those in its own Apple Store (the Project Red iPod) and has historically striven for simplicity in its product line. Particularly with the iPhone, Apple has been so focused on preserving the level of user experience that it went weeks with low or no inventory of the original iPhone model leading up to the launch of the iPhone 3G.
There’s little doubt as to why Walmart would want to carry the 3G iPhone. NPD tracked the device as the best-selling handset in the U.S. in Q3, surpassing the Motorola RAZR in a dramatic consumer embrace of Web-savvy smartphones. Recent smartphones such as the T-Mobile G1 and Blackberry Storm already represent the second wave of would-be “iPhone killers” following advanced touchscreen feature phones that appeared earlier in the year.
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