Report: Apple’s Bought Lala As “Insurance,” Won’t Undermine iTunes Dominance With Streaming Subscription Service



Ever since Apple purchased Lala back in 2009, it’s been assumed that iTunes was going to make a leap into the cloud with a streaming music on demand service pretty much any minute now.

According to a new report by the Financial Times, though, Apple’s just been messing with us: Apple has no intention of undermining the market for paid music downloads that it absolutely dominates.

Instead, Apple keeps its plans for the cloud and its Lala acquisition as a form of insurance. An ace up their sleeve, in case the likes of Spotify, Rhapsody or looks posed to become an industry-shaking juggernaut, similar to the way Netflix is changing the home video market.

If true, Apple’s cloud ambitions have nothing to do with subscription streaming. Instead, the cloud would be used to reinforce Apple’s domination of paid music downloads.

This seemingly gels with recent rumors that Apple’s streaming iTunes aspirations take the form of a digital, streaming music locker, and not a subscription radio service.

Additionally, at the most recent shareholder meeting, Apple claimed its new North Carolina Data Center would be used for “iTunes and MobileMe,” yet MobileMe subscription sales are reportedly listed as end of life at Apple’s retail stores.

For me, this all implies we’re about to see the rollout of a Mobile Me backed iTunes music locker, in which paid tracks can be stored and streamed from any internet connection. That model would not undermine Apple’s supremacy over the downloads market, but instead capitalize upon it. If so, we may see a blush of this new Mobile Me at next week’s March 2nd iPad event.