2 Sides to Apple's Success Story

Good news! Apple's (Nasdaq: AAPL  ) Ping -- the social-music network that Cupertino's sultans of style embedded into iTunes last week -- notched a million users in less than 48 hours.

Bad news! Earlier in the week, Apple had hyped Ping's chances by alluding to 160 million iTunes users worldwide. In other words, less than 1% of its users hopped on.

Good news! Ping is only available to folks who download the latest version of iTunes. Just 3 million users had upgraded to the latest update at the time of the press release, so a third of the eligible Ping members did, in fact, kick Ping's tires.

Bad news! Don't expect a third of all iTunes users to be on Ping by the time they all upgrade to iTunes 10. Many of last week's updaters probably did so just to check Ping out.

Oh, and it naturally remains to be seen whether those users will stick around.

Ping faced its share of pin-popping critics last week. After all, just 14 artists were available to follow. They represented a diverse selection -- from Linkin Park to Yo Yo Ma -- but they obviously weren't enough to appeal to the indie-embracing music lovers who would be obvious early adopters. Apple has quickly ramped up the number of artists sending out status updates and snapshots, with dozens of available artists as of last night.

The artists will keep coming, especially once they realize that Ping isn't a social network with a music bent, along the lines of News Corp.'s (NYSE: NWS  ) My Space Music, or even a music-discovery engine in the mold of Pandora or CBS' (NYSE: CBS  ) last.fm. With more "buy" buttons than a farmer's market, this is really a social e-tail network in disguise.

The next few months will be interesting, as artists arrive with amps and anecdotes. Will that be enough for consumers to stick around, putting up with the commercialism and the 30-second song samples? Heck, even Best Buy's (NYSE: BBY  ) Napster provides entire lo-fi streams for free!

Apple can't relax just because it's the country's top music retailer. Google (Nasdaq: GOOG  ) and Yahoo! (Nasdaq: YHOO  ) have mostly belly-flopped in their efforts to transform their popular e-mail platforms into social networks. Apple's e-tail bent also brings to mind the cautionary tale of Wal-Mart (NYSE: WMT  ) . The world's leading retailer knows how to turn inventory at attractive price points, but it's been one joke after another in social media.

If Apple intends to make a blatant push toward using Ping as a way to sell music, I think it should give users the means to monetize their participation. Apple has a great shot at expanding its already massive digital music sales through Ping -- as long as it realizes that artists' pushing means nothing if consumers aren't pulling.

Have you checked out Ping? Share your thoughts in the comment box below.

Best Buy, Google, and Wal-Mart Stores are Motley Fool Inside Value selections. Google is a Motley Fool Rule Breakers pick. Apple and Best Buy are Motley Fool Stock Advisor recommendations. Motley Fool Options has recommended buying calls on Best Buy. The Fool owns shares of Best Buy, Google, and Wal-Mart Stores. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.  

Longtime Fool contributor Rick Munarriz is finally finding artists worth following on Ping, but it'll take more than that to make him more than marginally active. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


Read/Post Comments (5) | Recommend This Article (7)

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 September 07, 2010, at 12:09 PM, Henry3Dogg wrote:

    Bad news. Not all Motley Fool readers have time fit this drivel. If you don't understand statistics, then don't play with them.

    Many of the 2/3 of iTunes 10 users that didn't activate ping within the first 24 hours, will do so later.

    Many of them will also stop ready Motley Fool.

  • Report this Comment On September 07, 2010, at 1:45 PM, TMFTheDoctor wrote:

    I activated Ping pretty soon after it was released just to check it out. I spent about 5-10 minutes with it and decided it had a horrible interface and I had absolutely no use for it, at which point I disabled everything I could and haven't looked at it since.

    Also, jeez Henry3Dogg. Harsh, man.

  • Report this Comment On September 07, 2010, at 5:07 PM, Ivan0310 wrote:

    @Henry3Dogg You can get your point across just as easily without sounding like a bent-out-of-shape troll. Not everyone agrees with your point-of-view either. Get over it.

  • Report this Comment On September 07, 2010, at 5:46 PM, ConstableOdo wrote:

    I tried Ping, but I don't think I have any use for it. I personally don't care for social networks of any sort.

  • Report this Comment On October 02, 2012, at 10:10 AM, TMFBreakerRick wrote:

    Henry3Dogg, I would just like to say that TMF outlived Ping.

    R.I.P. Ping 2010-2012

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