Why? Because Apple is the world’s largest purveyor of music, thanks to iTunes and the iPod, and the aforementioned Ms. Swift is a shrewd operator. Wait a minute. Isn’t the iPod mostly dead? Mostly. But half a billion iPhone users also have iTunes and shred artists today still want good deals to promote themselves and their music and who does it better than Apple?
That brings up an interesting question. Why do Apple, Google, Microsoft– all technology companies of sorts– need to be doing everything from search engines to software to hardware to self driving cars?
Fear And Greed
These three technology titans are more than what they appear on the surface. By way of gargantuan revenue and enormous profits, Apple has been outed as a hardware company. By comparison, Google, which gives away software, is a search engine company that sells ads. And Microsoft, admittedly a software company, now pushes hardware onto the masses.
Why don’t technology companies stick to doing what they do best? Two words. Fear and greed.
Much of Amazon’s profits these days come from selling access to the technology the company invented and built, rather than by selling products online. Every company seeks to diversify itself beyond its core competence and therein lie the seeds for problems. Google is a search engine advertising company. 90-percent of revenue and profits come from that core– ads. So, why does Google give away software for free? Because the software comes with a hook which allows the company to track users which helps them collect data which is used to make more money through… insert drum roll here… advertising.
Microsoft’s claim to fame is Windows and Office, and most of the company’s revenue and profits come from those sources, despite money-losing ventures into hardware and search engines and who know what else the company has spent tens of billions of dollars on that have yet to provide a return on investment.
Apple isn’t immune from the same diversification issue, though the company remains more disciplined about keeping the products– revenue and profit streams– well integrated into a secure ecosystem. iTunes came first and was Mac only. Then the iPod, which needed iTunes to work, came along, and it, too, was Mac only. Then Apple expanded iPod, iTunes, and then iTunes Music Store to encompass Windows and that venture brought the company great riches which allowed it to expand into retail, design and launch the iPhone, iPad, Apple TV, and Watch.
One of the great well known secrets of the past few years is that both Apple and Google are working on self-driving vehicles. What does Google have to do with autonomous vehicles? The company’s bread and butter is advertising? Such ventures into the unknown are common, particularly with technology companies where software runs everything and everywhere, but often the reason is more obvious and time-honored.
Fear and greed.
The fear is that the company’s cash cow will one day dry up, so keeping all the eggs in a single basket is not prudent (it’s Monday; mixed metaphors are heavily discounted). The greed is more the nature of humanity. Enough is never enough. More is better. And if there’s a possibility that revenue and profits may diminish or disappear, then a little greed is needed to help bolster the company’s fortunes in the future. Call it greed or pragmatism, but it’s everywhere and it explains why modern technology companies, especially those with tens of billions of dollars burning a hole in their executive’s pockets, feel a need to spend some of that hard earned money on ventures which might, maybe, possibly, could translate into ever more riches.