Speculation Grows over Apple’s “iRadio” Launch

In the new media world, Apple is notorious for not tipping its hand on upcoming products. As a result, handicapping (if not outright guessing about) Apple’s next move has become something of a cottage industry.

So it should come as no surprise that there is plenty of buzz regarding a rumored streaming radio service from Apple soon. This has recently accelerated due to analysis of last week’s iTunes update release (v11).

Even diehard Apple fans have long criticized the iTunes client interface for failing to live up to Apple’s normally high standards of elegant operation. iTunes 11 is more comprehensive than other recent increments, but may not soothe all the software’s critics. In fact, it has already created new ones who don’t like the new design, but in reality, iTunes 11 is not that radical a redesign under the hood, and doesn’t differ significantly in its current look and feel from other online media stores.
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Like some of those other popular online stores, iTunes now offers TV shows and movies for either download or streaming, with the latter option called “iCloud.” Probably the most important changes in iTunes 11 are new features that further integrate the iCloud service into the iTunes client. For example, the iTunes player now offers a cloud bookmarking feature, by which users can now stream a piece of content, stop it in progress, and rejoin it later, picking up where they left off.

So far, Apple hasn’t done much with music content in iCloud, but given the growing competitive context of streaming music services, the iTunes 11 set of new cloud-related features has fueled speculation that Apple is positioning iTunes to enable the launch of a new streaming music “radio” service of its own soon.

Of course, iTunes has offered streaming radio since its earliest days, but only as a means of finding and linking to existing Internet radio streams provided by third parties. In fact, iTunes has long been a popular Internet radio aggregation site, categorizing all streams by genre, and listing the data rate of each stream. Getting listed on the site has been free to any broadcaster or webcaster. Many Internet radio streams made their first connections to their subsequent fans via the site, including some radio stations that connected to listeners outside their broadcast coverage areas via listing their online stream on iTunes. Since then, however, other more interesting and sophisticated Internet radio aggregation sites have emerged (e.g., iHeartRadio, TuneIn), making the purely text-based iTunes listings seem a bit outdated – and version 11 does little to change this.

But the new service expected from Apple is quite different. Called “iRadio” by speculators (since Apple has made no announcement of what it will be called, or when it will emerge, if at all), the service is likely to be an original streaming music service offered by Apple itself, including personalization features similar to Pandora or Spotify. Whether Apple would continue its aggregation listings for third-party radio streams after the launch of “iRadio” is also unknown at present.

The new service could also integrate other features of the iOS platform for a rich and unique service. Apple forecasters have suggested that geo-location features in iOS might inform the ‘”Radio” app of the user’s current location, allowing the app to insert advertising (in the audio stream and/or on the device’s screen) from nearby businesses, and provide maps to their locations. Similarly, the system clock could generate insertion of time-based advertising opportunities.

The iOS’s new Passbook app might also play a role. Introduced in iOS 6, Passbook allows users to download or scan in and organize previously physical tokens of commerce, such as event tickets, boarding passes, retail coupons and store/loyalty cards. The app is also time and location-aware, so items can be set to pop up at appropriate times and places, such as whenever the user walks into a particular store or venue. Apple can also send notifications to update users about their stored items (e.g., gift-card balance adjustments). Such platform personalization and cloud commerce features could be coupled with the “iRadio” service to enable new advertising possibilities.

This sort of integration could differentiate an Apple music-streaming service from competitors like Pandora, but also make the service more directly competitive with local radio. It is interesting to note that Apple has activated FM receivers on a device that does not directly connect to the Web (e.g., iPod Nano), but not to those that do (e.g., iPod Touch, iPhone, iPad).

Whatever forecasters expect, Apple usually confounds them with something other (either greater or less) than what they expected, so stay tuned.