Analyst: iCloud Will Make iTunes More Valuable

| Apple Stock Watch

Sterne Agee analyst Shaw Wu believes that Apple’s iCloud, which will be unveiled at next week’s World Wide Developer Conference, will make iTunes more valuable. In a research note obtained by The Mac Observer, Mr. Wu told clients that it could be “a very big deal.”

“[Apple’s] new ‘iCloud’ service will likely be the company’s most aggressive (to date) move into the emerging cloud computing space,” the analyst wrote. He said he believes it will make, “iTunes even more powerful and useful by allowing access to content from any device, anywhere.”

He also argued that in the past, “every time a major new feature is added to iTunes (like TV and movie rentals), its utility value increases, which in turn drives more hardware sales, i.e., iPhone, iPad, and Macs.”

The analyst maintained his 12-month price target on AAPL, which is set at US$460 per share. He also maintained his “Buy” rating on the stock.

Shares of AAPL moved higher in the late morning session Wednesday, trading at $349.43, up $1.60 (+0.46%), on strong volume.

*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.  

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7 Comments Leave Your Own

Tiger

I’m curious. Are hard drive makers concerned at all about cloud services? What will be the point continuing to develop consumer grade HDs beyond current capability if storage will be remote instead of local?

geoduck

Seems like a safe prediction. However, I’m waiting to see what iCloud does. So far I’ve not seen rumored additional services that would be of any use to me.

Tiger:
As long as the Cable/Cell providers throttle content and charge high rates there will always be a drive for local storage.

aardman

Are hard drive makers concerned at all about cloud services?

Where do you think all the data in the cloud will be stored?

In fact server farm operators will probably look to the cheapest form of storage which means, ta-da, hard drives.  Cloud computing should actually be welcomed by hard drive makers because it would slow down the pace at which SSDs replace HDDs.

cb50dc

What will be the point continuing to develop consumer grade HDs beyond current capability if storage will be remote instead of local?

I see your point, and I expect that the answer may sound similar to the question of print for books, news, etc: whereas digital/cloud will surely continue to grow, it’ll be awhile before either printed material or personal hard drives truly goes away. Whatever I may store in the cloud, I’ll always want my own physical storage in my Mac and/or on the desktop.

geoduck

(bad analogy warning)
I see the cloud like a bus.
Buses are useful and a lot of people find them very handy but GM did not stop making cars . In fact a lot of people that ride the bus have a car too, for those times when the bus isn’t going to work.

The cloud is going to be useful. A lot of people will find it very handy, but it won’t do away with the need and the desire for personal storage. A lot of people who store stuff on the cloud will want a copy at home for safekeeping, or for when the cloud is out of reach, or for those documents they just don’t want to trust out of their own control. (The cloud is great but I would never think of keeping my financial records out there.)

So I see the cloud as being an alternative to not a replacement for big honking personal storage media.

{/bad analogy}

Tiger

Aardman,

As I stated, I foresee a slowdown in “consumer” hard drives, versus production for enterprise. They’re not always the same. I agree that it will likely slow down SSD demand. I think there may be a lot of unpredicted consequences in fact. And as Geoduck points out, the “pipes” being throttled will always be a problem for consumers. Imagine trying to download over the air a 600 mb update for iPhone and it freaking/bricking in the middle?

Somedays, there just may be stormy iClouds!

Jamie

Exactly. I’m someone that actually buys music, my collection is ridiculously huge, and bandwidth limitations would make something like this decidedly inconvenient for me. I already don’t use iTunes rentals for movies or tv, I can’t fathom jumping on this either. Additionally, I don’t work in corporate or IT, so my personal work will never reside in the cloud either.

I think the bus analogy is apt, actually - even in the 21st century, not every place has buses. I swear it seems more and more of late, to a larger extent than usual, the entire culture of business thinks California is the only state on the continent, no provisions anywhere else are necessary. wink

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