Analyst: Lala Purchase May Signal Future iTunes Streaming

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Although officially tight-lipped on details, Apple may use recently-acquired music streaming company Lala to upgrade its iTunes service and potentially other applications, reports suggest Monday.

“Lala gives Apple browser/Web-based technology to access music anywhere,” financial analyst Maynard Um told UBS Investment Research clients. Um believes Apple will combine the Palo Alto, Calif. company with a planned $1 billion server farm to “provide seamless access & mobility of digital content across all of its products, including media-focused content of iTunes and user-generated content of MobileMe.”

Over the weekend, an anonymous source speaking to Reuters seemed to buttress that belief, claiming “Apple recognizes that the model is going to evolve into a streaming one and this could probably propel iTunes to the next level.”

Any mash-up between Lala’s catalog of more than 8 million songs and Apple applications could create a service “similar to Apple’s Genius feature except driven by real people (vs algorithms,” suggested the UBS analyst. The new Apple company lets people listen to friends’ music collections, create playlists and be updated when new music appears.

A sign Apple may be moving toward more Web-access came appeared in November when the Cupertino, Calif. company quietly introduced iTunes Preview. The change made previews available on a Web site, rather than requiring people to install the iTunes software.

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About the author

Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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