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Cloud technology might be a tricky concept to understand completely, but one thing is for sure: it makes accessing music ridiculously easy. Never one to miss out on a trend, some big names in tech (Amazon (NASDAQ: AMZN ) and Apple (NASDAQ: AAPL ) , among others) are keen to try to take advantage of this new e-battleground. But who is doing cloud music right, and who is missing out?
Apple of the music industry's eye?
Apple may not have been the first company to put its stamp on online music, but with its introduction of iTunes and iPods, the company made such a powerful and stylish mark that it changed the face of the music industry forever.
Now Apple is trying to cash in on cloud computing. Users no longer have to endure the tedium of buying a song off iTunes and uploading it to their device through a USB chord. With the cloud, as soon as the song is purchased, it pops up everywhere. You'd think this would be exactly what Apple needs to put itself even further ahead of the pack, but you might be wrong.
Amazon, in its typical "gradually taking over the world" fashion, is nipping at Apple's heels. Brilliantly (and perhaps dastardly), Amazon is using Apple's own devices against itself in an attempt to profit from it. The e-retailer's 22-million song database has always been cheaper than the gradually rising costs of iTunes songs, but as any frustrated iPod owner can attest, Amazon music was previously off limits to Apple devices.
Until now. Amazon recently reported that it has optimized its song base for use on Apple devices. Now the company can take advantage of Apple's cloud capabilities with its own songs, and iPod users can start paying considerably less for their music. This could lead to a significant hit in sales for Apple, which brought in 5% of its total net sales in 2012 from music-related products. It might also lead to the unthinkable for Apple: cutting prices on its songs.
King of the cloud... for now?
So who is victor in this chapter of the cloud story? Apple has taken some impressive strides toward capitalizing on the tech trend, but its efforts may still be in vain after Amazon gets done with it. The website has felled many a retailer in its short existence (rest in peace, Borders), and while it is by no means gunning to destroy Apple, Amazon has cunningly given the tech juggernaut a reason to be uneasy.
There's no doubt that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and more importantly, your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.