Google's chance to plug iTunes gap in Asia
The battle in the mobile space between Google and Apple has no doubt been intensifying with various numbers emerging, claiming market leadership over the other.
The popular consensus, for now, is that Android is seeing strong growth while Apple iPhone rules the smartphone market. Cupertino's success can be attributed to its strong apps ecosystem, supported by the Apple App Store which saw its 10 billionth download earlier this year.
The iTunes Store is also the world's largest music retailer and projected to generate sales reaching US$13 billion by 2013.
It is, however, conspicuously missing in Asia, with the exception of Japan.
According to a 2010 study by market research firm NPD Group, music is "still central to the iTunes experience" and is what drives Apple's content ecosystem, not its apps. Its online survey showed that 82 percent of respondents made a music purchase on their iOS device, while 56 percent said they bought music exclusively. Over half said they spent the majority of their time on iTunes searching for music. "iTunes shoppers are still completely engaged with music, whether it's about listening, discovering or buying," said Russ Crupnick, NPD's senior entertainment analyst.
None of these shoppers would have been from Asia--home to two of the world's largest consumer markets.
I've speculated that Apple may be unwilling to open up its iTunes Store in this region due either to high piracy rates or the lack of copyright agreements with global record labels to peddle music in Asia.
But, one major label confirmed that copyright agreement wasn't the issue. Earlier this year, I spoke with Universal Music's president of digital music, Rob Wells, who revealed that it had signed two licensing deals with Apple, one covering North America and the other for all markets outside of North America.
"It's not us that's stopping Apple," Wells said, noting that accessibility--or the lack of--to digital music was a major problem that needed to be resolved to curb piracy in this region.
Whatever its reason may be, Apple is missing out on a big opportunity by not including Asia in its iTunes repertoire, especially when the Asia-Pacific digital music industry is estimated to churn revenues to the tune of US$7 billion by 2015 and to account for 35 percent of global figures.
And here's where Google can jump in. Having boosted its gameplay with the launch of its online music service this week, the search giant should rethink its decision to limit the availability of Google Music only to the U.S. market.
Ovum analyst Mark Little said it would not be easy for Google to grab market share from Apple's iTunes platform, on which 16 million people had downloaded music and which generated US$1.5 billion revenue in the company's most recent quarter.
In Asia, Google would face no such competition from Cupertino.
In Asia, where social networking sites have strong presence, the search giant could also pilot a social recommendation engine to enhance music discovery and marketing.
In Asia, Google might finally find the Achilles heel to outrun Apple.
And it should do so before Cupertino wakes up and realizes its own folly.