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Amazon unleashes its latest challenge to iTunes

Adds MP3 store optimized for iOS to its CloudPlayer and CloudDrive, also lures Android users with free 50Gbytes


Published: 18 January, 2013

READ MORE: Amazon | Applications (Browser) | Mobile Content | iOS

Amazon's new year message is clear - in terms of its challenge to Apple and Google in mobile cloud services, you ain't seen nothing yet. This week it has announced an MP3 music store for iOS, targeted squarely at iTunes, and an Android cloud storage service providing a massive 50Gbytes of capacity.

The store makes clear how challengers will harness the new browser-based streaming model to chip away at iTunes' dominance. The HTML5-based MP3 store is optimized for iPhone and iPod touch (with iPad to follow), and allows consumers to use Amazon's CloudPlayer app, launched in 2012 for iOS, to buy and play songs directly on these devices, and more smoothly than with existing MP3 services. Consumers user the app to access a catalog of 22m tracks and the associated CloudDrive to store their purchases and their own music.

Amazon is addressing the dilemma inherent in Apple's closed content model. By using the browser it avoids paying the 30% commission that Apple takes for in-app purchases within iTunes (that rule has pushed many content providers, including newspapers, to withdraw from App Store or iTunes and accelerate HTML5 efforts). And by investing in optimizing the service for Apple's Safari browser, it hopes to deliver as good a user experience as a download option does.

When a user buys a track, the item is stored in the cloud and can be accessed there or saved to a library, and played from a variety of devices (not just iDevices - Android is also supported) As with other Amazon stores such as Kindle, there will be daily deals and personalized recommendations based on purchase history. Also like its other stores, there will be only cautious roll-out plans beyond the US, and these remain vague as yet.

iTunes dominates digital media download sales with over 500m user accounts worldwide and its empire will be hard to topple. Asymco analyst Horace Dediu calculates that the iTunes economy as a whole (including music, video and iOS apps) now generates $12bn in annual gross revenues, with multimedia sales accounting for two-thirds of that figure. Amazon is gaining ground on iOS, however, by optimizing many of its digital services for the Apple platform via the browser. Recently it added its Instant Video streaming service to the iPhone. CloudPlayer, originally unveiled in 2011, came to iOS last year.

"Since the launch of the Amazon Cloud Player app for iPhone and iPod touch, a top request from customers has been the ability to buy music from Amazon right from their devices," said Amazon's VP of music, Steve Boom, in a statement. Last week, Amazon offered another incentive for US customers to try CloudPlayer by offering a free digital copy of any CD they had bought in the past 15 years, and of any new CDs they buy from now on.

Cloud storage is a mundane but critical aspect of the web players' bids to dominate multi-device content. Amazon is throwing down the gauntlet to its rivals by launching MediaFire for Android, providing 50Gbytes of cloud storage for free. This app was originally rolled out last summer for iOS. It provides most of the features of competitive cloud offerings, allowing customers to view their images and documents, stream content and share files. Photos and videos can be uploaded directly if a user has limited local storage left - a nod to the full cloud model of the future - though critics point out there is no batch upload option for quick archive of existing libraries. Nor is there the kind of folder syncing and automatic uploading that Dropbox enables. However, for many users the huge free storage allowance will lure them to Amazon for the first time, and the firm will certainly add further capabilities over time.

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