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Amazon Attacks Apple in the Cloud

By Tim Beyers - Updated Apr 6, 2017 at 10:41PM

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A new online streaming service could be a coup for Android.

Fresh off rumors of Google (Nasdaq: GOOG) testing its own streaming music service, Amazon.com (Nasdaq: AMZN) this morning introduced Cloud Player for purchasing, storing, and playing tracks via the Web.

Think of it as an online version of iTunes and emblematic of what Lala was before Apple (Nasdaq: AAPL) purchased the company in December 2009 to keep it from causing trouble. Now, Amazon gets to be the pest.

Actually, "pest" might be too small a word for what's going on here. This is an assault on the iTunes empire, with two versions of Cloud Player leading the charge: one for the Web and another for Android devices. There is a catch, however. Protected AAC files common to iTunes can be uploaded to but not played inside either Cloud Player. Amazon won't mess with content that isn't DRM-free.

So be it, though the timing is nonetheless interesting. Last week, the e-trailer rolled out its controversially named Appstore for Android. In building a Cloud Player for Google's OS, the e-tailer leaves little doubt as to its ultimate aspirations. What iTunes is to iOS users, Amazon wants its Appstore to be for Android users. (Cue ominous music.)

But the story doesn't end there. Amazon this morning also introduced a service called Cloud Drive, which is both like and unlike a similarly named service from Rackspace Hosting (NYSE: RAX). They're alike in that both allow users to store data in the cloud.

The difference is that the e-tailer aims to create a space for individuals to house digital goods purchased from its online shelves, whereas Rackspace's Cloud Drive is more often used to back up file servers or create a shared filing system for a disparate team.

Conceptually, I like Amazon's strategy. The entry price (free!) is unbeatable and adding space is easy. U.S. customers who purchase an album from Amazon anytime during the year will see their Cloud Drives upgraded from five to 20 gigabytes of storage space.

And then there's the convenience factor. Keeping tracks in the cloud should allow users to play them on any device, anywhere, so long as they have access to a reasonably fast Internet connection.

Whether that comes to pass is immaterial at this point. With Cloud Player and Cloud Drive, Amazon has served notice that it's time for Apple to figure out what, if anything, it can do to make Lala and MobileMe come together as an attractive platform for consumer cloud computing.

Do you agree? Disagree? Let us know what you think about Cloud Player and Cloud Drive, Google's suddenly marginalized Android Market, and Apple's thus-far nonexistent cloud computing strategy using the comments box below.

You can also rate Amazon.com in Motley Fool CAPS and keep tabs on all the companies mentioned in this article by adding the stocks to your watchlist for free, personalized stock tracking.

Google is a Motley Fool Inside Value pick. Google and Rackspace Hosting are Motley Fool Rule Breakers recommendations. Amazon.com and Apple are Motley Fool Stock Advisor selections. Motley Fool Options has recommended members open a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He owned shares of Apple and Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool owns shares of Apple and Google and has written Apple puts. The Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is always plugged in.

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Stocks Mentioned

Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$144.78 (1.12%) $1.60
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$121.70 (-0.31%) $0.38
Apple Inc. Stock Quote
Apple Inc.
AAPL
$173.03 (-0.09%) $0.16
Rackspace Hosting, Inc. Stock Quote
Rackspace Hosting, Inc.
RAX

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