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Here's Why Apple Shouldn't Bring iTunes to Android

The latest rumor going around is that Apple (NASDAQ: AAPL  ) plans to bring its signature iTunes software and store to Android. The credibility of this rumor is shoddy at best, but every so often something like this makes the rounds. True or not, this seems like a poor business decision and one that Apple shouldn't adopt.

Apple needs software to differentiate itself
These days, just about anybody can build a smartphone -- the hardware is largely a commodity at this point. The real "secret sauce" to Apple's wild iPhone profitability lies in both the brand loyalty it has garnered over the years and in the differentiated software ecosystem that the company includes with its phones.

Source: Apple.

The core of this ecosystem is, of course, iOS. However, while iOS has captured the hearts and minds of developers worldwide, just about every important third-party app that can be found on iOS can also be found in Google's Android. And since Android is free (except for the various license fees some vendors need to pay Microsoft (NASDAQ: MSFT  ) ) and customizable, the "ecosystem advantage" is waning, meaning that first-party apps and services are becoming increasingly important.

Apple's iTunes is a core advantage
A big part of the iPhone's "stickiness" is that plenty of folks own a fairly sizable collection of paid apps, making a move away from the iOS ecosystem a bit difficult. Apple's iTunes is very similar; just replace "apps" with "media." While some may prefer to use something like to buy MP3s that can be played with the platform-agnostic Amazon Cloud player, iTunes revenue is still quite robust (Apple's software/services/iTunes generated $4.4 billion in sales last quarter, up from $3.69 billion in the prior-year period).

Apple's iTunes Radio is another service that helps keep iOS "sticky." Source: Apple. 

By bringing iTunes to Android, consumers have one less reason to "need" to buy an iOS device. Indeed, if Apple brings the core of its software/service ecosystem to competing platforms, then how is it going to maintain such high profitability on its devices? Differentiating on hardware is nearly impossible, especially when iPhones typically don't pack the latest-and-greatest, buzzword-compliant specifications. In fact, Apple intentionally goes with the cheapest it can get away with on the hardware side and then more than makes up for it on the software side.

But iTunes is available on Windows!
One big counterargument is that when Apple brought iTunes to Windows, this was an unequivocally good thing. However, it's important to understand the pretty significant difference here. Apple wasn't using iTunes to try to sell Macs (which are becoming an increasingly negligible part of Apple's business) -- it was using iTunes to try to sell iPods and later iPhones.

Foolish bottom line
iTunes, as well as the rest of Apple's first-party software, is key to keeping its platform as "sticky" as possible. In a world where anybody can put together a fast, slick smartphone with a gorgeous screen and great battery life, it really does come down to the usability and usefulness of the device. This, first and foremost, is determined by the software and the content and the more tied to the platform customers are, the better it is long term for high-margin hardware sales. 

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Read/Post Comments (5) | Recommend This Article (0)

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 April 15, 2014, at 9:26 AM, rrecine wrote:

    Nobody should buy music from iTunes. It costs more and the software sucks.

  • Report this Comment On April 15, 2014, at 9:33 AM, mretome1960 wrote:

    1 point to rrecine, there are rarely bargains to be found at iTunes. 1 point to the author, anything that I do get from iTunes on my Windows PC immediately gets copied to my Amazon cloud. I then play it Android devices so Apple isn't really gaining anything by not porting iTunes to Android.

  • Report this Comment On April 15, 2014, at 9:49 AM, greenember wrote:

    Apple is already losing downloads to streaming services like Spotify. Apple is already losing handset sales to Android manufacturers. The last thing Apple needs is a smaller audience to sell to. In the article, you state that Apple used iTunes to sell iPods and iPhones. Wouldn't it make sense that you put iTunes in as many hands as possible then? Plus the argument that Apple makes outstanding software is just wrong; 3rd party software is what makes Apple great. Apple's 'interface' is little more than an application launcher whose once-great visuals have been replaced with 'flat' graphics (read: no graphic design talent required). The look isn't revolutionary, it's lazy.

  • Report this Comment On April 15, 2014, at 11:33 AM, melegross wrote:

    I see the Android fanboys are out in force in the comments here today.

  • Report this Comment On April 15, 2014, at 11:49 AM, bobbydig wrote:

    You can say all you want about iTunes, but its the king of digital content. After all these years no one comes close. If your an artist, its the one and only place to release your music. Yahoo, Napster, Zune, Google, Spotify, Pandora, and Amazon all have dumped millions trying to compete with iTunes and have failed. The numbers don't like, iTunes is king.

    The three comments above sound so freaking foolish. I guess they are sort losers.


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Ashraf Eassa

Ashraf Eassa is a technology specialist with The Motley Fool. He writes mostly about technology stocks, but is especially interested in anything related to chips -- the semiconductor kind, that is. Follow him on Twitter:

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