iTunes in the cloud is more ambitious than we think

There is lots of chatter about on the new data centre that Apple is building – a data centre to end all data centres. A data centre with 500,000 square feet. At that footage, you’re talking almost seven times the size of a soccer pitch.

Besides the sheer size of the facility, the next thing that’s been whispered is that Apple will use it to put iTunes in the cloud. It has to be Spotify-like service though, because I can’t see telcos wanting that kind of data clogging up their backbone.

And what about Spotify? They can’t be happy. It’s not inconceivable that iTunes will go with the subscription model in the medium term especially if your tracks are merely up in the air? They could do a mixed-mode model, say you can buy X songs for 5 bucks a month or have Jay-Z hand-pick a playlist of tracks. ¬†Whatever happen, a cloud-based client that serves up music has to hurt Spotify.

Also, it’ll be interesting to see what value-add products Apple can bring online to compliment the music offerings it currently sells. Imagine buying your 8 year-old daughter a Hannah Montana pass on iTunes. They can download the music, get a season pass to episode of the show, see exclusive Miley concerts, ringtones, karaoke backing tracks, dance how-to videos. I could go on and on. Suddenly Apple isn’t in the music business, but it’s a content delivery platform player and media tollmaster. Whatever device, they have a holistic menu you can buy like age-appropriate passes to and just gift to whomever, even kids.

The Apple cloud computing centre isn’t just a music play. It’s a CDN play where scale matters and they’re counting on that. Their single biggest asset is the bank of iTunes customer accounts they manage. Yes, security concerns has hampered iTunes in the last few weeks, but you can bet that Apple are depending on iTunes in the cloud to unlock market scale unheard of and predictable income streams, year on year.

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