Apple plans to make an iTunes announcement that has Wall Street hoping the company will introduce a subscription-based version of the music and video store or to offer some other service to drive more revenue from the business.
In a typical Apple marketing ploy, the company posted on its homepage Monday a cryptic message that read: "Tomorrow is just another day. That you'll never forget." The message goes on to advise visitors to check back at 10 a.m. Eastern time for "an exciting announcement from iTunes."
Shortly after Apple's announcement, The Wall Street Journal reported that the company was preparing to announce that it would soon start selling music from the iconic pop band The Beatles, answering Chief Executive Steve Jobs' longtime wish to bring the Fab Four to the world's largest music retailer. Quoting people familiar with the situation, the newspaper said an agreement had been reached between representatives of the Beatles and their record label, EMI Group Ltd. However, there was no indication when the announcement would be made and the newspaper warned that Apple could change plans in the last minute.
Meanwhile, Wall Street hoped that Apple would be announcing some way to boost revenues from iTunes, which is essentially a breakeven business for the company. The software is used primarily to provide an online store and services to Apple products, making the iPhone, iPod and iPad more valuable to customers.
"We would like to see an announcement that allows Apple to better monetize its iTunes assets, further strengthen the Apple ecosystem or push the company further into the cloud," Brian J. White, managing director of equity research at Ticonderoga Securities, said Monday in a note to investors.
Speculation that Apple could be getting ready to launch a music subscription service has been circulating on the web since last December, when the company bought an online music service called LaLa. Apple has never said what it plans to do with the service.
However, there are indications that an iTunes subscription service could be popular with Apple fans. Of the 50 million iTunes users in the United States, between 7 million and 8 million would be willing to pay a monthly fee of $10 for either streaming music or access to their personal music libraries on Apple's and other manufacturers' devices, according to a survey by The NPD Group.
Offering more cloud services, such as access to a music or movie library online, is another possibility for Tuesday's announcement. Apple already has a cloud service called MobileMe that syncs data between Apple devices and also includes 20 GB of online storage. The service costs $99 a year. Apple sparked speculation that it was planning to expand its cloud services when it invested $1 billion in a new 500,000 square-foot data center in Maiden, N.C.
Lesser potential announcements could include expanding its Ping social networking service for music in iTunes. The service is closed to iTunes users, but Apple could decide to connect the service to Facebook, tapping into that network's 500 million users.