Apple Owns Up to a Rare Mistake


Apple (NAS: AAPL) is a hit factory, but even it puts out a clunker from time to time. After nearly two years, iTunes Ping -- the company's stab at turning digital music into a social platform -- has failed to gain traction.

Speaking last night at the All Things Digital 10 conference, CEO Tim Cook seems ready to pull the plug on the critically dissed initiative.

"Will we kill it? I don't know," he said last night when Ping came up. "We'll look at that."

Every little Ping she does is tragic
The rollout of iTunes Ping two summers ago never seemed right. Sure, Apple bragged about having a million users sign up within the first 48 hours, but that was just a sliver of the 160 million iTunes users worldwide.

Attraction also isn't the same thing as retention. The summer before Ping's launch, Sirius XM Radio (NAS: SIRI) proudly announced that it had secured a million downloads of its streaming iPhone app in just two weeks. The market applauded the news, but Sirius XM never showed a bump in mobile subscribers or a dramatic uptick in existing receiver-based accounts paying extra for access to the smartphone app. There's a wide gap between folks who kick tires of a new digital service and those who stick around.

Apple discovered that a summer later.

I want to teach the world to Ping
It was easy to see Apple's social shortcomings. It's the country's top music retailer, but customers don't necessarily want to socialize where they make their purchases. There weren't enough big-name artists on Ping, either, and the crass commercialization of "buy" buttons were turnoffs. The spam. The fake celebrity accounts. The 30-second samples instead of the full versions available through music sites that knew what they were doing. It all added up.

The eventual lack of Facebook (NAS: FB) integration at a time when Spotify, MOG, and Rdio were all over the place was probably the end of Ping. Facebook already has more than 900 million users. If Apple wasn't willing to build Ping on top of Facebook, it was never going to catch on.

On a Ping and a prayer
When Apple discontinued the Newton PDA in 1998 or the earlier incarnations of Apple TV failed to take off, the class act of Cupertino was simply ahead of its time. The market would eventually come around to portable computing gadgetry through smartphones and tablets. As more homes embraced Web-enabled streaming in the living room, Apple TV's potential audience grew in size.

Ping, though, was a wreck from the beginning. It wasn't ahead of its time. Ping's biggest flaw is that it was -- and is -- an inferior product to nearly everything else on the market.

Twitter is the broadcasting promotional platform of choice for celebrities. Facebook is the undisputed champ for making interactive connections. Who needs a friend on Ping to share a song recently purchased when we have Pandora (NYS: P) offering up new music that truly matches a listener's taste in tunes?

Ping wasn't even better than MySpace Music, and we know how well that social network panned out for News Corp. (NAS: NWS) . The once-sticky destination that Rupert Murdoch felt was worth billions was unloaded for a pittance.

If Ping sticks around -- or if it's mercifully nixed and reincarnated later -- Apple had better remember that a product or a service launched under its brand that isn't best-of-breed is detrimental to the company in the long run.

Give consumers the Ping they want or don't bother trying.

Apple jacks
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At the time thisarticle was published The Motley Fool owns shares of Apple.Motley Fool newsletter serviceshave recommended buying shares of Apple and creating a bull call spread position in Apple. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.Longtime Fool contributorRick Munarrizcalls them as he sees them. He owns no shares in any of the stocks in this story and is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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