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Finally, Apple Addresses Its Biggest Weakness

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For all its innovative designs, Apple (Nasdaq: AAPL  ) has a clunker in iTunes. And you know what? CEO Tim Cook knows it, too.

According to Bloomberg News, the Mac maker is planning a massive overhaul of the service. Planned features include using iCloud to better synchronize downloaded entertainment across a number of devices and more tools for sharing music.

We'll know the details when Apple is ready to announce them. In the meantime, let's take a look at what iTunes isn't and what it could be.

Synchronicity: more than just an album from The Police
Apple's ecosystem isn't nearly as elastic as those of its partners and rivals because everything is downloaded. Thus, if you start a purchased movie on your iPad and then switch to your Apple TV, you'll have to start the watching experience over again. Each device manages content independently.

Rentals are where this problem comes into sharp relief. Say you purchase a 24-hour rental of Oscar-winning flick The Artist from your Mac. Because you're downloading a file, you're tied to that device for your rental. Netflix (Nasdaq: NFLX  ) , by contrast, serves 100% of its content via streaming from a growing and interconnected network of servers. (Nasdaq: AMZN  ) has a similar system for their customers. Whether you're a Prime member streaming free content or purchasing new premium TV or movies, the e-tailer delivers over the Web. That way, you can start and stop watching at will and then catch up at exactly where you left off.

Google (Nasdaq: GOOG  ) is also getting into the game of providing synchronicity. I'm only going by my own experience here, but when I watch shows in spurts while logged into YouTube, the service now keeps my place. And not just for everyday videos. The Big G also has a provision for streaming rentals from its Play video store in YouTube. This weekend, I've been stopping and restarting Morgan Spurlock's documentary, Comic-Con Episode IV: A Fan's Hope, in honor of one of my favorite annual geekfests.

Spying on Spotify
Synchronicity is important, but it's also one of two major issues Bloomberg says Apple will address in the next version of iTunes. The new store and related apps are going to be more social.

To be fair, Apple has tried this before with the failed music network Ping. What would be different this time? My guess is the Mac maker would channel features that make Spotify popular.

If you've yet to try it, Spotify is an app that aggregates music your own and music you can stream into a single player. You can also share a single track with a friend or broadcast your current playlist. Because of its social proclivities, Facebook (NYSE: FB  ) has essentially deemed Spotify its version of iTunes Music. Meanwhile, Spotify's new mobile app uses Facebook Connect to login for sharing and saving of music tracks discovered while on the go.

Apple, too, has increased engagement with both Twitter and Facebook, which makes social sharing of playlists a likely option in the new iTunes. Apps might also make the service more compelling. Right now, Spotify includes TuneWiki for syncing lyrics with tracks, Rolling Stone Recommends for access to the top choices from the legendary magazine, and Tastebuds for meeting people who share your listening interests, among others. Spotify is using music to create a social hub -- an opportunity iTunes has largely ignored outside of its meager efforts with Ping.

Breaking bad rules
And those are just two areas where iTunes needs help. There's also the prospect of transforming the service into a digital wallet that challenges Google and eBay. What else did I miss? Which businesses did I miss? Or, conversely, do you expect Apple to simply tinker with iTunes and move on to bigger projects?

Either way, it pays attention to study potential shifts since, over time, the market rewards those that lead the rebellions.

Want even more Apple analysis? Be sure to check out our brand-new premium research report on the company, straight from our top technology analyst, Eric Bleeker. You'll receive his take on Apple's biggest opportunities and threats, along with a full year of updates. Learn more.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple, Google, and Netflix at the time of publication. He also had a long-term call position in Netflix. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Facebook, Netflix, Google,, and Apple. Motley Fool newsletter services have recommended buying shares of eBay, Google, Netflix, Apple, and and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

Read/Post Comments (4) | Recommend This Article (17)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 16, 2012, at 2:05 PM, Popnfresh100 wrote:


    There's plenty Apple can do to improve itunes for music fans, but it requires thinking outside the "cloud".

    For example, the iphone could use:

    - Affordable earbuds that don't suck

    - a radio tuner

    - an xm radio tuner

    -live broadcasts of concerts

    -album prices that are actually << than the price of the CD at with shipping!

    Do things because they solve problem for your users, not just because they are high-tech.

  • Report this Comment On July 20, 2012, at 11:17 AM, freshpowder01 wrote:

    It would be nice to have live syncing but downloading has it's advantages. What if you're not connected to the "cloud?" You don't get to listen to your favorite music. So, the ultimate option should be to have both. There's probably other options but I wouldn't be too quick in jumping into the cloud with both feet since I've also heard about clouds going down. Unless the connections can stay with you anywhere, anytime downloading should be an option.

  • Report this Comment On July 20, 2012, at 2:54 PM, kayakbabe wrote:

    I don't want more social networking. That apple made it non optional really ticks me off. I want to remove or hide those options. I like my privacy. I really don't care to share or want to know what everyone is doing, listening to, or ifmtheynare having bowel movements... Chill on the "social" stuff already!

  • Report this Comment On July 20, 2012, at 3:19 PM, kayakbabe wrote:

    Another thought... I don't want the tv shows movies etc synced across all my computers and devices for playback, I only want them to keep track on the device they were being used on. My spouse and I share our iTunes account, thus the syncing across all devices does not make sense. I asked a couple of friends (itunes users) and they agree with me. They don't want it either. This article is the personal viewpoint of Mr. Beyers and I think misses the boat about iTunes.

    Downloading is imperative since disruption of connectivity is a reality. Also storage on the "cloud" costs money somewhere, many people choose not to pay that penalty for extra cloud capacity for having a large library of media.

    Mr. Meyes is looking at his favorite trees when the forest is the issue. What iTunes needs is better personal control for the individual over their own experience. Give us options to sync or not sync media across devices (and which devices), Give us options to have Facebook or other third party services included in our iTunes interface or NOT. Give us options over what we want to be stored in the cloud to NOT stored in the cloud. Empower us to be in control of ourselves, pay attention to our choices and the rewards will be great for iTunes. Indeed for any business that is reliant upon a large group of people, empowering them and listening , considering and responding to them will make that business money.

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