As little as you read about it you’d think Apple was keeping their iTunes business some kind of secret. iTunes? Yes, it’s the little side business that Apple has turned into a nearly $4-billion business, with hefty profits, and an annual growth rate of 25-percent. That ain’t shabby, folks.
Wait. I know what you’re thinking. ‘Kate, everybody else already has a business just like Apple’s iTunes.’
Well, yes they do and no they don’t.
Everybody competes with Apple’s iTunes business, but it’s the big dawg on the digital content block. Apple distributes more TV shows, movies, and music than Netflix or Amazon or Google or anyone else.
What is digital content? Apple lumps in everything that every other competitor has less of. Music, TV shows, movies, applications, e-books, and apps that Apple develops and sells. No similar entity on earth is as large or as profitable as Apple’s iTunes, and it’s growing faster than any other product line.
When we buy a Mac or iPhone or iPad or iPod we populate those devices with apps and other digital content, and Apple’s customers do that more often than PC users, smartphone owners, tablet users. Even if Apple stopped selling hardware, it’s likely that the content business would continue to grow (albeit more slowly, of course).
Who competes with Apple’s iTunes business?
Microsoft, Google, Samsung, Nokia, BlackBerry, Amazon, Netflix and a host of other online distribution sources, all smaller, all less substantial. Apple does something else that most of the competition has yet to accomplish– profitable monetization of the digital content business.
When a competitor overtakes Apple’s iTunes digital content business in revenue, profits, or growth, then you’ll know that Apple is skating along on thin ice.