Apple's Cloud Tunes Likely Coming Soon

Apple Inc. is widely expected to release its own iTunes-related cloud strategy soon likely integrating its MobileMe services and taking advantage of its investments in its North Carolina data center, Barcalys Capital said.

Last week, Amazon announced its Amazon Cloud Drive, Amazon Cloud Player for Web and Amazon Cloud Player for Android with the ability to store music, photos, videos & documents in the cloud and access them on many devices.

We believe the launch of Apple’s service is much more complex than Amazon’s given its millions of users with years worth of files. Also Apple faces much more legal scrutiny in terms of attention from content owners and regulators – who will need to be 'on board' from day one, said Ben Reitzes, an analyst at Barclays Capital.

Amazon’s Cloud Drive initiative centers around the ability to store music, photos, videos and documents in the cloud and access them on a multitude of devices including Android phones, Android tablets, Macs, PCs, etc. Customers can upload music libraries to the Amazon Cloud Drive and save new Amazon MP3 purchases directly to the Amazon Cloud Drive for free.

Customers start with 5GB of Cloud Storage and those who purchase an Amazon MP3 Album are automatically upgraded to 20GB of Cloud space. New Amazon MP3 purchases saved directly to Cloud Drive are stored for free and do not count against a customer’s storage quota. Customers can purchase storage plans starting at $20/year for 20GB.

Reitzes said Apple would use its cloud based iTunes/MobileMe service to further lock in customers to its ecosystem by making content available seamlessly on all of its devices -- including iPhones, iPads and Macs.

Reitzes noted that NFC capability on future products could also dovetail nicely with cloud based services by providing the availability to recognize users and potentially allow them to log in virtually directly into Macs and other devices remotely.

We believe that Apple could charge a recurring fee for this service and will likely offer much more available memory than Amazon does since its users have much larger libraries. Theoretically, a cloud-based content service could allow Apple to offer cheaper versions of its devices with less on board memory -- which would help the company get more gadgets into the hands of consumers, said Reitzes.