Apple’s iCloud music storage service could draw millions of users when it launches, spelling trouble for companies like Google and Amazon that are trying to compete with their own services.
The Royal Bank of Canada, or RBC, is predicting Apple could see as many as 150 million users join the company’s iCloud music storage service when it debuts this fall. RBC found nearly three-quarters of the 1,500 iPhone users surveyed said they would sign up for the service.
Apple’s iCloud, set to launch free with iOS 5, will allow users to upload music, photos, books calendars and other files to Apple servers. They can use the service to access their data on a number of different devices, including iPhone, iPad, iPod Touch and both PC and Mac computers.
“This high response rate affirms the growing interest in storing, syncing and sharing music, photos and documents across multiple devices such as smartphones, tablet, PCs and TVs,” said Mike Abramsky of RBC.
If RBC’s prediction comes to pass, iCloud would become an instant rival to other networks that have been around for several years. Google’s Gmail and related services have about 200 million users; Apple could receive 150 million users through iCloud, basically overnight.
Though this is great news for Apple, it could spell disaster for competitors like Amazon’s Cloud Player and Google Music, both of which allow users to store and stream music like Apple’s iCloud. Both of these services lack the features and functionality offered by Apple.
Amazon and Google’s cloud services, as an example, force users to upload music to the cloud themselves, which could take days depending on the size of library. Since both services don’t offer the level features found in Apple’s service, consumers may choose Apple over other options.
RBC also discovered about 30 percent of those surveyed would sign up for iTunes Match, which allows users to upload music not purchased through iTunes on the cloud for $25 a year. This revenue would boost Apple’s profits $1.5 billion annually, according to RBC.
Amazon charges $50 for every 5,000 songs uploaded to its service. For a user with a music library of 20,000 songs, it would run them an annual fee of $200. Apple charges a flat rate of $25 per year, much cheaper than Amazon. If consumers choose their service with their wallet, Amazon may not be able to compete with iCloud.
Abramsky believes iCloud’s ability to link several Apple products together could cement customer loyalty, which is already very high.
“Because it stores user data, iCloud, along with iTunes, is expected to enhance loyalty and stickiness of Apple’s customers against threats from Android, helping grow a defensible install base of users who continually upgrade to next generation Macs, iPhones, iPads and iPods.”
Apple appears to have won over a strong majority of people to its customer base, who are already excited about iCloud, and could draw in even more users to the ranks of Apple loyalists through its cloud services. Google and Amazon must scramble to get their respective services up to par with Apple’s if they wish to succeed in the cloud.