Beats And Apple’s Love Affair With Money

Despite Apple’s much deserved reputation for successful industry disruption, the company has a long list of failures, too.

Yes, the Mac, Apple Stores, iPod, iTunes, iPhone, App Stores, and iPad are big money makers and dominate the profits of their respective business segments, but Apple continues to miss the mark where more nimble competitors roam. Why? Money. Apple loves money.

Follow The Money Trail

This may seem like a crass analysis, but the facts will back up the premise. Apple prefers products that help the company to make money

To be fair, Apple is willing to try new products, and some of those fail because the company takes a ‘money first’ approach.

Two perfect examples come to mind and both are harbored in iTunes, Apple’s cash cow media mall.

First up is iTunes Ping. Ping? Yep. Nearly four years ago Apple launched Ping as a social network for music.

Steve Jobs described Ping as “sort of like Facebook and Twitter meet iTunes.” Barely two years later Ping was unceremoniously shuttered. Why?

Ping was less a social music service than it was a haven for spammers and way for Apple to make money by including the all-important Buy option on songs. The service didn’t attract enough users and they didn’t buy enough songs for Apple to consider it worthy of continued support.

Pandora vs. iTunes Radio

Further proof that– unlike Google, Microsoft, Amazon, Spotify, Pandora and others– Apple prefers to make profits, is iTunes Radio.

Launched nearly a year ago, iTunes Radio hasn’t been much of a competitor to Pandora, which has roughly five times as many as Apple’s tepid step into internet radio.

Why can’t Apple get these second tier products to work properly?

It’s obvious. Apple can’t figure out how to make any money in social networking or internet radio, so doesn’t support products that don’t bring a investment return with instant profitability. To be fair about it, both Spotify and Pandora haven’t figured out how to make any money, either.

What about iCloud?

Steve Jobs once called Dropbox a feature and and not a product. As a product, iCloud would need to be profitable for Apple to continue. As a feature, iCloud helps to sell hardware, and provides both a barrier to entry and differentiation from competitors.

For all of Apple’s design prowess, history of disruptive innovation, the company won’t stick with a money losing product. What about Beats Electronics? Beats is a company with some of what Apple needs. Talent, a cool music subscription service, and a load of popular hardware.

And, importantly, Beats is profitable.