This article has been adapted from our sister site across the pond, Fool U.K.
Apple (Nasdaq: AAPL) has unveiled Ping, a music social network that runs off the back of the iTunes software that's used by 160 million people worldwide.
Unless you've been in a cave for five years (in which case you really need to get The Wire and Lost on DVD, and you might grab Tony Blair's new autobiography, too), you can already guess how Twitter-like Ping works: You follow other Ping users (some of whom are your favorite music stars), listen to the same music they do, attract fans of your own, and share your comments and playlists from within iTunes.
So far, so familiar, but Apple is as at least as good at perfecting as it is at innovating, so don't write off Ping just yet.
The new social network has at least the potential to be a fatal kick in the unmentionables for Rupert Murdoch's struggling MySpace, which having ceded market leadership to Facebook, has only really kept limping along in all its ugly glory because of its ties with music fans and bands.
More interestingly, what does Ping mean for Apple, and for those other game-changers de jour -- Google (Nasdaq: GOOG) and Facebook? Why is a hardware maker turning into a fan boy matchmaker, anyway? And does it tell us anything about the future of the technology industry?
Head in the cloud
Apple well knows you can't stand still and survive in the tech business. After pretty much inventing personal computing out of a garage in the 1970s, it lost the big bucks to Microsoft (Nasdaq: MSFT) and Intel in the 1980s when it failed to take its product to businesses and the mass market.
Apple's later recovery is now a decade old; while the iMac of the late 1990s was a statement of intent, it was the iPod that really put Apple back on the consumer map. iPod -- and the iTunes music store -- made buying and accessing digital music easy. The iPod also provided the blueprint, mindshare, and marketing lessons that underwrote the subsequent success of the iPhone and iPad.
This 21st century fight back has taken Apple to the brink of being the largest company in America, but CEO Steve Jobs and his cohorts know they can't rest on their laurels.
Moore's Law
For starters, Moore's Law is at play. Boiled down, this maxim says that computing hardware gets relentlessly cheaper, faster, or both. Moore's Law is why Apple must keep bringing out new products at the top end even as the bottom end of its range falls away.
Its latest iPod Shuffle will cost just $49, for instance, yet it's the best Apple has produced. This same phenomenon extends all the way through Apple's iPod line, and will eventually hit the higher-margin iPhones and iPads, too. If Apple doesn't compete against its products, rivals will.
But the price of hardware is just one factor in determining the cost of a computer or mobile phone. As well as a premium for how that hardware is put together -- something Apple has exploited better than any other computer company -- you also have to consider software.
While iPhone is a very well-designed gadget, it's the touch-screen operating system, the wealth of third-party applications, and the ease of both developing applications and getting them via the iTunes-powered App Store that put it so far ahead of its rivals.
Finally -- crucially -- to this long-established hardware/software duopoly, we've seen in the past few years a third factor emerge, connectivity; both social connectivity and the ability to connect to off-device services via what futurists have dubbed cloud computing.
The cloud is a fancy name for the more mundane reality of lots of air-conditioned warehouses stuffed with servers that deliver everything remote from your device -- from your email via Gmail and your music via Spotify to your Facebook newsfeed.
Where the Internet becomes the cloud is a debatable point, but everyone from Google to Microsoft is convinced we're going to spend more of our time with our heads stuck in there, as opposed to unwrapping copies of the latest Windows operating system.
My moat's deeper than your moat
Seen from this perspective, then, what Apple is trying to do with Ping is to wed one aspect of the cloud -- social networking -- to its own hardware and software offering.
Hardware is an never-ending battle against commoditization. Software also requires continual innovation, and as the ever-improving Android phones show it's hard to maintain a big edge here for long.
Software delivered via the cloud also kills the sort of Windows monopoly that made Microsoft's Bill Gates so wealthy.
But what about the best music hardware running the most popular music software, tied together with a dedicated music social network that users are reluctant to abandon once they've invested time in building up their profiles -- and thus ring fences iTunes as a hub for music purchasing, as well as protecting Apple's hardware sales?
That sounds like a moat that could hold for a few years -- and that's why we now have Ping.
Popularity contest
There's no guarantee Apple will succeed, of course.
An installed user base for one product doesn't just swarm like zombies to another because a CEO clicks his fingers. Google thought it could leverage its Gmail users to kickstart a Twitter rival, Buzz, but that idea already seems to have buzzed off.
And Microsoft has already tried a music network with Zune Social, a similar service to Ping for its Zune music players.
The difference in Microsoft's case, at least, is that Apple has 160 million iTunes users who all love their iPods and iPhones, whereas Zune has an installed base of half-a-dozen users who share the same office in Redmond, Seattle, and who can hear what the others are listening to over the cubicle walls.
OK, I exaggerate to make a broader point. Technology companies that have invested in becoming aspirational brands like Apple and Google (now said to be readying a full-on Facebook rival) want to discover whether they can turn that brand equity into a long-term competitive advantage, via the lock-up of opt-in social networks.
Is there room for several boutique networks, or will Facebook rule them all? For anyone invested in technology, the answer to that question could hardly be more important.
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