Apple’s iTunes ecosystem: The gift that keeps on giving for Apple

Black Friday/Cyber Monday Apple Blowout“Apple’s tight control of its ecosystem and its competitors lack of such structure has helped build the App Store into what it is, and insured that it continues to outpace its rivals. But at its core, the App Store works so well because it was built upon a foundation that was proven: iTunes,” MG Siegler writes for TechCrunch.

“Since Apple was able to grow iTunes into the biggest force in online music (and actually, the biggest force now in retail music overall), it conditioned its customers with something very important: The idea of paying for digital goods with one click through a piece of software. Customers had already bought billions of songs through iTunes by the time the App Store was born,” Siegler reports. “And the App Store offered the same exact process, using the same method of payment already stored in iTunes.”

Siegler writes, “This is crucial… Apple made it as easy as can be for customers by placing the App Store on top of iTunes. And as a result, since customers are wiling to pay for these apps, it lit a fire under the third-party developer community, which continues to fuel the App Store.”

Siegler writes, “It’s a cycle. And it remains one that will be very hard for a competitor to break because they don’t have this iTunes ecosystem. It’s the gift that keeps on giving for Apple.”

Full article here.

[Thanks to MacDailyNews Reader “James W.” for the heads up.]

17 Comments

  1. Question: Shouldn’t there be by now an international iTunes store (for apps, movies, music, etc)?

    Apple products are bought in many more countries than just North America and few places in Europe.

  2. Apple App Store = paying customers = profit = real App developers = great Apps.

    everyone else = maybe customers that sometimes pay sorta = tiny tiny microscopic profits = hobbiest app development by Linux moms basement nerds = mediocre apps.

  3. Due to the myriad of purchase rules/regulations amongst the different countries, not to mention exchange rate issues, setting one store for all of them would be a huge hassle.

    Plus, since Apple doesn’t own the distribution rights, they can’t just say where such and such will be offered. That’s usually done through the agreement that Apple has with the company that owns the distribution rights.

  4. One of THE most important parts of the equation is that people feel they can trust Apple.

    Can’t see more than about twenty people trusting Microsoft or Adobe with their credit card details…

  5. @Mac++, even so, just because it is difficult now does not preclude this happening in the future. Surely new distribution agreements can be made, and music choices made from a truly global perspective.

    Just because I live in the UK should not mean that I need to pay more for the same TV episodes that US viewers enjoy. I think the county-by-country distribution deal seems to be biased to eek out the maximum profit possible. From a digital standpoint the end product is the same and I even pay broadband costs to another company so there is no distribution cost to incur.

  6. I’d bet that the “country-by-country” model wasn’t Apple’s first choice of doing things, in much the same way that copy protection wasn’t Apple’s first choice. However, because of the extremely varied interests involved (record companies, artist guilds, gov’t regs), there was no choice but to execute it in this way.

    Hopefully, as with copy protection, Apple will find an opportunity to change the game with the parties involved and consolidate its various international iTunes marketplaces.

  7. @Zune Tang

    Cute, almost funny.
    “Tight control’ = no choice for the consumer.” — er…. that is a NO. It just works. :Still lots of working control left…. Un like MS that lets you crap your stuff more and more….

    “MAC’s proprietary system locks out Zune or the Dell Ditty from dumpy I-Tunes. How about this—try to sync the Zune-wannabe I-Pod to Rhapsody. YOU CAN’T!”

    Actually there is now a Rhapsody app for that last item…. LOL

    And most mp3 players work just fine with iTunes. Cause the craptastic Zune (do not know about the Ditty) do not work with the Mac, see Steve Ballmer about that. LOL

    PS, duck the chairs.

    Just a thought.
    en

  8. iTunes is great software even if you are not purchasing anything. I import lots of CDs to make awesome playlists. iTunes makes organizing music a joy. And then I stream it over AirTunes to lots of speakers throughout the house at once, reverberating raising the rafters. Heaven!

  9. @ pocketRocket,

    As soon as the World Government takes power there will be a Universal Apple App Store.

    Until then we must wait in fascinated anticipation. Carbon credits for exhaling CO2 are just around the corner. World Government can’t be too far away.

  10. I see in the comments for that article disgruntled iTunes users referring to it as “bloated”. Weird. Must be a problem with the Windows version (or with the Windows computers it runs on). On my Mac, iTunes is still a joy to use.

    ——RM

  11. @pocketRocket: won’t happen until every country in the world ratifies their copyright laws, intellectual property laws, trademark laws, import and export tariffs, tax rates, cost of living, etc…

  12. “Just because I live in the UK should not mean that I need to pay more for the same TV episodes that US viewers enjoy.”

    Depends on what you mean by “pay more”. During the past 18 months, the exchange rate of US dollar to the Euro went from $1.6 per Euro to 1.2 and back to 1.52. I’m sure the swing was just as wild against the UK Pound. So, where does the price get set in stone? In which markets do the prices get adjusted monthly (bi-monthly? quarterly? semi-annually?) depending on the exchange rates?

    Wherever any business has presence with their product (or service) the price is set locally to roughly correspond with its prices elsewhere in the world. Since currencies can swing wildly (even the stable, “hard” ones), the discrepancy in the absolute value of those goods/services can, too. Early in this century, 1 Euro was around $0.9 US. At the time, an iMac could be had for $1,300, and 1,400 EUR. Today, an iMac cost $1,200 in the US, and 1,100 EUR. Obviously, there are some minor swings in the pricing, but during the past year, those prices haven’t moved in either of the two markets.

    Since the US market is the largest single market for Apple (EU is segmented into individual countries, each managing its own inventory), the sheer volume of sale in US makes it easy to keep pricing low. And lastly, let’s not forget VAT, which across EU tends to be very close to 20%, whereas in the US, it is below 10%, and in many states, significantly lower than that. Not to mention that people very often avoid paying even that, by ordering online from an out-of-state merchant, and cheating (i.e. never paying the retail tax they owe on those purchases to their own state tax authority).

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