At the start of May we wrote an opinion piece entitled iCloud.com: Apple's most important development in years? On Monday night it proved to be so. Steve Jobs took to the stage of the Moscone Centre for Apple's annual World Wide Developers' Conference and unveiled iCloud, a service which will fundamentally change the company's business model forever.
iCloud had long been rumoured, but for once Apple realised it was too important to play games and used the week before WWDC to declare: "At the keynote, Apple will unveil its next generation software - Lion, the eighth major release of Mac OS X; iOS 5, the next version of Apple’s advanced mobile operating system which powers the iPad, iPhone and iPod touch; and iCloud, Apple’s upcoming cloud services offering."If this was out of character then so is the theory behind iCloud itself: the beginning of a post-PC era. Until now Apple has built its iPod, iPhone and iPad product lines upon the strict practice that they must be tethered to a computer to sync with iTunes. The computer stopped these devices from being truly mobile and iTunes tied them to Apple's software ecosystem. This methodology was so strong Apple had begun to fall behind its rivals leading us to discuss in March Why Apple Runs Shy of the Cloud. As we declared at the time: "the business model which currently serves Apple so well will increasingly become a noose around its neck if it keeps refusing to evolve."
Well evolve it has and from a business perspective it has evolved brilliantly. The physical lockdown of a cable and PC has been replaced by a virtual lockdown to Apple's iCloud service. iDevice users can now setup, upgrade and sync their data without a wire or PC in sight as Apple services enter the Cloud with the help of the company's $1bn, 505,000 square foot data centre in North Carolina.
It is an approach that physically frees these products only to lock them into a new, stronger ecosystem you cannot see. To ignore iTunes was to not sync or back-up. To ignore iCloud does the same, but also sacrifices day to day functionality. Apple has created the illusion of freedom while actually tightening its grip. As the saying goes: "the greatest trick the devil ever pulled was to convince the world he didn't exist".
For Jobs' fabled "one more thing" he had an equally clever concept: the monetisation of music piracy. Naturally you will never hear anyone from Apple refer to iTunes Match in this way, but the theory is undeniable. Users can match their existing music libraries against iTunes' 18m track database and Apple will provide them with DRM-free 256Kbps AAC versions for just $24.99 per year. There is a 25,000 song limit to the service, but iTunes purchases do not count against that total. Yes, it is music laundering.