Is Apple Buying LaLa To Kill It?


Lala's unreleased iPhone App. Image from Gizmodo.
Lala's unreleased iPhone App. Image from Gizmodo.

Harry McCracken at Technologizer is worried that Apple’s rumored purchase of Lala could be the best thing for iTunes – or the worst.

Harry has been testing LaLa’s as-yet-unreleased iPhone app, and it’s just like iTunes in the cloud. The app streams your iTunes music collection to wherever you are, plus you can buy new songs for a dime (well, streams of new songs).

“…all of a sudden, the iPhone’s relatively skimpy memory isn’t nearly as much of an issue, since you can stream all the music you’ve got in iTunes on a PC or Mac to your phone. You can also listen to and buy songs from Lala’s 8-million song store. It’s all surprisingly fast for a streaming service, and it even caches recent music you’ve listened to so you’re not completely out of luck if you don’t have an Internet connection.”

Harry is in love, and hopes that Apple will roll Lala’s functionality into iTunes if Apple buys the company. But he’s also worried that Apple may be buying Lala to kill it — it’s a competitive threat to iTunes.

Over at Silicon Alley Insider, the same notion is implicit in a quote from an industry insider who says LaLa’s licenses are non-transferable:

One industry source with years of experience in the digital music business is very surprised by the apparent deal. “I would be completely shocked,” he says. “None of the licenses are transferrable (not that Apple has a hard time getting licenses). Why would they buy it? Again, I’d be shocked.”

Thing is, as far as I know, Apple has no history of buying companies to shut them down. Anyone know any examples? And as Elliot Van Buskirk at Wired points out, Apple does have a history of buying companies to kickstart new products. Apple’s iTunes was based on SoundJam.

In addition, as we reported in August, Apple is building a one of the world’s largest data centers in North Carolina. Given it’s enormous size, the new data center is likely to focus on cloud computing, perhaps hosting services like Lala’s for Apple’s giant iTunes customer base.