1. Apple Inc: iTunes
Team Global Tech Gals
January 15, 2012

2. Apple Inc: iTunes
Team Global Tech Gals
January 15, 2012

4. CLICK Analysis
Apple Inc was originally established in April 1,
1976 by founders Steve Jobs, Steve
Wozniak, and Ronald Wayne.
The men met while working for the
gaming brand Atari, and formed an
early partnership that helped launch
Apple into the leading brand we know
today.

5. CLICK Continued
Over the course of the following decades the brand
evolved to become what we know as the developers
of the Macintosh product line.
Though the company is credited with many
technological developments and applications, here
we will focus on Apple’s use of their popular music
application, iTunes.

6. CLICK Continued
Over the course of the following decades the brand
evolved to become what we know as the developers
of the Macintosh product line.
Though the company is credited with many
technological developments and applications, here
we will focus on Apple’s use of their popular music
application, iTunes.

7. Apple is a brand that has redefined the meaning of simple
design. The company’s ability to hone user needs and ease
of navigation has set them apart in the field of hardware
and software development.
Even at an early age, Apple’s technological innovator Steve
Wozniak enjoyed working on a budget and with limited
materials. The company still exemplifies this simple design
in all of its products, and is part of the reason consumers
find them so user friendly. It was Steve Job’s
understanding of technology and his amazing energy that
helped ensure the brand’s market success.
Apple’s founders captured demand for their products and
services from consumers who desired a more user-friendly
(and therefore simple) interface.

8. iTunes is a
testament to this
design principle.

9. iTunes first intended marketing efforts began at launch in 2001, when the brand
targeted consumers interested in purchasing music in an online environment
that supported clean and legal downloads for a price.
Apple developers wished to compliment the recent release of the iPod and the
iTunes platform posed a perfect pairing of technological products. Music labels
were inalterably impacted by the new iTunes generation, and a whole new way
of discovering and purchasing music quickly and easily was born.

10. SWOT Analysis
Strengths Weaknesses
1. Clean file downloads 1. Consumers must pay for music
2. Legal acquisition of files 2. Content restricions and licensing
3. Easy to use 3. Lack of music variety
4. Fast downloads 4. 4. Difficult artist/developer
5. Brand recognition backend navigation/integration
Opportunities Threats
1. 100% cloud storage 1. Subscription radio
2. User incentives to promo 2. Free peer-to-peer music sites
discounts 3. Wider variety on other sites
3. Price cuts on product to reflect 4. Better software being developed
compatative advantage on retail by other brands
stores
4. Easier profile interface
experience for artists and
developers

11. Competitor Analysis

12. Top 3 Problems
Illegal downloading of music was causing the
Music industry to loss profit and there was
a real threat of the music industry
becoming extinct
Consumers wanted digital music for free but
legally and relatively cheap
Consumers wanted to be able to pick what
they wanted to listen to and be able to do
so in an easy to use fashion

13. Top 3 Solutions
Offering online sales of albums and singles
Standardized pricing for singles at 99 cents –
this meant that you could buy a single for
99 cents no matter who the artists was
Selling singles instead of albums - this
changed the way that the average customer
thought of a music unit.

14. Business Model Canvas

15. Industry Impact
The iTunes Music store was introduced in
April 2003 with 200,000 songs all for sale
at 99 cents
In the first week more than 1 million songs
were purchased and downloaded
This was the first time consumers could
‘cherry pick’ their songs rather than
purchasing entire albums or singles the
record labels selected

16. Industry Impact
iTunes along with the iPod changed the way
people consume music
It allowed people to buy experiences that now
includes connecting with artists via iTunes
ping, Facebook and Twitter
Artists have more options on self distribution
and licensing

17. Alternative Business Models
Subscription service model would be
additional revenue stream for Apple
It would allow Apple to anticipate monthly
revenue from members whether they
download music that month or not
Having a subscription service model would
allow Apple to control a member’s music
library; subscription ends and the library is
no longer accessible giving incentive to
continue service

18. References:
Image Resource List:
•
iTunes logo for title page http://www.finestdaily.com/news/free-itunes-movie-rentals-from-orange-and-apple.html/attachment/itunes-logo-2
•
image of first iPod http://www.apple.com/pr/products/ipodhistory/
•
image of iPod 2003 http://www.apple.com/pr/products/ipodhistory/
•
image of 2003 iTunes store http://news.cnet.com/html/ne/Special/Pops/itunes_pop.html
•
image of U2 FB page https://www.facebook.com/u2?sk=wall
•
image of Jared from Kings of Leon https://twitter.com/#!/youngfollowill
•
image of iTunes ping iTunes music player
•
image of subscription service http://www.macworld.com/article/154757/2010/10/music_subscription_compared.html
•
image of Foo Fighters on iTunes mobile http://www.apple.com/itunes/what-is/
•
image of Steve Jobs with download screen http://articles.businessinsider.com/2011-05-31/tech/30032065_1_ios-apple-s-worldwide-developer-s-conference-mobileme
•
image of Steve Jobs announcing Ping http://www.physorg.com/news/2010-11-apple-itunes-tuesday.html
•
early Steve Jobs http://www.cultofmac.com/125063/steve-jobs-finally-reveals-where-the-name-apple-came-from/
•
iPod generation graphic http://www.designerwhey.com/blog/phase-ten-the-ipod-trio-part-three/
•
iPod generation dog http://captionsplash.mylifetime.com/user/scottiebaby
•
iTunes competitor – Google http://twitteling.com/2011/03/itunes-competitors-from-google-is-ready-to-be-presented/
•
iTunes competitor – Rhapsody http://chattahbox.com/technology/2008/06/30/rhapsody-embraces-the-ipod-challenges-itunes/
•
iTunes competitor – Spotify http://www.digitaltrends.com/computing/spotify-music-download-service-launches-in-europe-with-ipod-support-free-playlist-syncing/
•
iTunes gift card for revenue stream http://www.kaboodle.com/reviews/itunes-gift-card-collection
•
Music industry labels impacted from iTunes http://thenextweb.com/media/2011/01/03/the-music-industry-and-the-web-time-to-kiss-and-make-up/
•
Matt Damon with iPod (service meets customers needs when jogging) http://obamapacman.com/2009/08/matt-damon-apple-mac-laptop-ipod/
•
Girl on train with iPod (service meets customers needs when commuting) http://wigblog.blogspot.com/2005/07/end-of-ipod-era.html

19. Resources for Industry Impact & Alternative Business Models:
•
Breen, C. (2010, October 12) MacWorld “Four Music Subscription Services Compared”, http://www.macworld.com/article/154757/2010/10/
music_subscription_compared.html
•
Byrne, D. (2007, December 18) Wired Magazine “David Byrne’s Survival Strategies for Emerging Artists – and Megastars”, http://www.wired.com/entertainment/
music/magazine/16-01/ff_byrne?currentPage=all
•
Deleon, N. (2011, March 23) Tech Crunch “London School of Economics: No, Piracy Has Not Killed the Music Industry”, http://techcrunch.com/2011/03/23/
london-school-of-economics-no-piracy-has-not-killed-the-music-industry-but-the-industry-has-certainly-changed/
•
O’Hear, S. (2007, October 11) Last 100 “Music Industry: Five Alternative Business Models”, http://www.last100.com/2007/10/11/music-industry-five-
alternative-business-models/
•
Spotts, G. (2007, March 25) Fast Company “Indie Bands Reach New Sales Heights Through iTunes”, http://www.fastcompany.com/blog/greg-spotts/digital-
entertainment-column/indie-bands-reach-new-sales-heights-through-itunes
•
Unknown (n.d.) Apple “Press Info: iPod + iTunes Timeline” http://www.apple.com/pr/products/ipodhistory/
Resources for CLICK Analysis
●
1. Ehrenfried, M. (2011, 12 09). markusehrenfried.de.
Retrieved from http://www.markusehrenfried.de/
mac/applehistory.html
2. Livingston, J. (n.d.). Founders at work. Retrieved from
http://www.foundersatwork.com/
steve-wozniak.html
3. Apple Inc. (200). Apple inc. (2 ed., Vol. 11, p. 2).