Apple's iTunes Is Overdue For a Tune-Up


It's about time for an iTunes tune-up.

Apple's (NAS: AAPL) content store was launched back in 2003, with only music available initially. The storefront ramped up very quickly, selling 5 million songs over the next two months, and crossed 10 million songs less than three months after that. Eight months after launch, it had sold 25 million songs. In the process, it also revolutionized the music industry and defined digital distribution standards while helping the industry combat rampant piracy.

Apple iTunes. Source: Apple.

Since then, it has quickly expanded to include all sorts of media content, including movies, TV shows, books, and mobile apps, well beyond just the initial tunes it peddled. Yet, Apple has stuck by the iTunes branding, which has now become a household name.

A new iTunes?
One thing, though, has remained relatively stable through the years: the overall interface. Apple has continued to add various features and tweaks to the software, but the experience is largely unchanged. According to a recent Bloomberg report, that's all about to change.

The Mac maker is allegedly set to give iTunes a major overhaul by the end of the year in one of the biggest changes since its inception nine years ago. Part of the revamp includes tighter integration with Apple's iCloud service that should make accessing and managing content easier.

With its swelling offerings, content discovery is a key piece of this puzzle, which is where Apple's recent acquisition of Chomp will come into play. Cupertino acquired the small app discovery startup a few months back for an estimated $50 million, and subsequently shuttered its Google (NAS: GOOG) Android discovery capabilities.

Sharing is caring
Apple made a misguided attempt at musical social sharing with iTunes Ping, a social networking platform built directly into iTunes that failed to take off. By the looks of it, Apple is set to kill off the service, with CEO Tim Cook even acknowledging that it's something he's considering at the recent All Things D conference.

In its stead, you can expect beefier integration with those social services that people actually use: Facebook (NAS: FB) and Twitter. Apple included Twitter integration in iOS last year, and is officially bringing Facebook into the iOS this fall. Both services are also getting some additional love in the next major version of Apple's desktop operating system, Mountain Lion, so it's taking these relationships to new heights.

Everyone's doing it
Another reason why iTunes could use some fresh blood is that Apple's major content rivals continue to beef up their own storefronts and focus heavily on digital sales. (NAS: AMZN) sells its Kindle Fire at cost, just to peddle its content, and Google is now pursuing the exact same strategy with its Nexus 7 as a portal into its consolidated Google Play content store.

Amazon and Google are also pushing the envelope with cloud integration and sharing, so Apple needs to stay abreast with its competitors.

Winds of change
It may sound like a minor facelift, but it's likely to be a major revamp in more ways than one. Added cloud and social functionalities will go a long way, and iTunes has been frequently criticized for being loaded with bloatware. Hopefully, Apple will strip away all the extra features that no one uses and streamline the interface. It's about time.

An iTunes overhaul is just a piece of Apple's competitive puzzle to keep the pressure on its rivals. It will also contribute to Cupertino's incredible momentum, so you might want to consider picking up shares for all of these reasons. If you prefer rock-solid dividend stocks, then we've got another special free report with your name on it. These nine companies have steady cash flow, and love to give it back to investors.

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