Piper: Expect iTunes cloud, not music subscriptions, from AppleApple will likely announce a cloud-based iTunes streaming service on Tuesday, but will not offer an all-you-can-eat music subscription plan, investment firm Piper Jaffray has predicted.
Analyst Gene Munster issued a note to investors Monday after Apple teased on its website that it would have an "exciting announcement" on Tuesday at 10 a.m. Eastern. He said it's "probable" that Apple will announce a cloud-based iTunes service that would allow content streaming to Internet-connected devices.
"Apple is developing a data center in Maiden, N.C. that we believe could serve as the hub for such a service," he wrote. "The company has indicated that the data center is on track to be completed by the end of (calendar year 2010) and it will begin using it by then."
Munster is not, however, convinced that Apple will announce a music subscription service this week. The company has been rumored for years to be interested in such a service for iTunes, and even as recently as October was said to be in negotiations with record labels to offer unlimited access for a monthly fee.
The announcement on Tuesday, he said, represents a buying opportunity for investors. Piper Jaffray has a $431 price target and overweight rating for AAPL stock
"With Apple's growing family of connected devices (iPhone, iPad, iPod touch, Apple TV, and Macs), it only makes sense that Apple would deliver a cloud-based media service to leverage its competitive advantage in the space: devices," Munster said. "As part of this, the new Apple TV with limited storage, a lower price, and a focus on accessing content over the Internet would fit in nicely."
The analyst also reiterated his longstanding believe that Apple is planning to introduce an Internet-connected television in the next few years. He believes an iTunes cloud-based service is just another step toward that eventual goal.
On Topic: iTunes
- Kanye West blames conflict between Apple Music & Tidal for missing projects
- Apple's Beats 1 head DJ Zane Lowe giving music keynote at 2017 SXSW
- Apple debuts Apple Music ad touting revamped UI, custom playlists, Beats 1
- Jimmy Iovine talks past, future of Apple Music in new interview
- Apple opens up iTunes donations for Hurricane Matthew relief