Amazon looks to reduce Apple's hold on music sales with launch of MP3 web store for iPhone and iPod touch
Amazon has taken another step at reducing Apple's hold over on-device music sales, today announcing the launch of its HTML5 MP3 web store specifically for iPhone and iPod touch …
Context & Ripple Effects
Amazon has pursued digital-music differentiation since its DRM-free MP3 launch in 2007, then escalated competition with a 69-cent pricing push in 2011. Yet a 2008 assessment concluded its store was not an iTunes killer, underscoring the importance of reaching buyers on Apple’s own devices.
The iPhone- and iPod touch-focused HTML5 storefront turns the mobile browser into Amazon’s distribution route, rather than leaving iOS music purchasing solely to Apple’s native store.
First-order effects
- Amazon gains a direct music-sales channel for iPhone and iPod touch users, while Apple’s device owners receive a competing purchase option on their devices.
- Apple faces a challenge to the music revenue attached to its installed iOS base without Amazon needing a native iOS music-store app.
Second-order effects
- Amazon’s prior low-price posture gives it room to make music pricing a more visible point of comparison for iOS buyers, increasing pressure on Apple’s store economics.
- HTML5 becomes a practical route for digital merchants seeking access to iOS customers while retaining the customer transaction outside Apple’s native storefront.
Third-order effects
- If browser-based stores gain traction, device platforms’ control of ancillary digital-sales revenue weakens relative to the reach of their installed hardware bases.
- The music-store contest points toward competition for revenue per active device shifting from exclusive native storefronts to web-accessible services.
The trend: Mobile platforms are becoming battlegrounds for revenue per active device, with web standards enabling outside merchants to contest native-store control.