Saturday, October 25, 2014

iTunes Adapts To Meet Changing Demands

With Apple's quarterly financial news, most attention was paid to iPhones and iPads, but Apple also finds revenue from its iTunes business. According to the Wall Street Journal, "global iTunes sales—including movies, apps and books—increased to $4.6 billion in the third quarter, up from $4.3 billion in the same quarter a year ago."  Revenue is up despite the fact that music downloads are declining.  Consumers no longer feel as much a need to own when they can enjoy listening via streaming services.  Pandora and Spotify have become big winners as a result.

But Apple was not blind to this change in consumer purchase habits.  earlier this year, they purchased Beats and with the headphone business came a streaming business as well.  How they fe=it Beats into the Apple iTunes infrastructure remains to be seen, but they clearly recognized that a change was needed.  Still iTunes revenue has grown year over year and that is because the iTunes business is more than music.  It encompasses video, books, and apps too.  With the release of Apple Watch, more apps will be sold to run that product line.  And iTunes may also be the home for Apple Pay and the rise of other e-commerce type businesses. iTunes continues to face changing consumer interests while it continues to be the online store its products need for application and content consumption.  And iTunes revenue, already the size of some other Fortune 1000 companies, should only continue to rise.