Why Apple Spent $80M on LaLa

Rich Tehrani : Communications and Technology Blog - Tehrani.com
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Why Apple Spent $80M on LaLa

Apple confirmed they purchased music streaming site LaLa for around $80 million and I believe the reason for the acquisition may have to do with my recent experience with Sonos, a company which makes multi-room, WiFi home stereo equipment. After you see how liberating streaming wireless radio can be in a multi-room environment you understand what a huge market this is. At a point in the future I expect to talk about my experience with the entire Sonos product line but I am waiting for their newest component to arrive before I cover them in full.

In the mean time, the endgame for Apple is to get involved with streaming TV and radio in a multiroom environment and to turn their UI magic loose on the home. This will include a tablet experience and a central server which works with iTunes, Apple TV, etc.

The smart move is to rename Apple TV to Apple iMedia Server to get ready for the transition.

In addition, Sonos has Twitter integration built into its very iPhone-like remote control and following this trend, LaLa too has slick social media integration - expect part of the reason for this acquisition to be getting Apple more deeply into the social media game.

I really think there is a multi-room opportunity with more money in it that the iPod opp of years past. And that is just for music... When you add in TV we are talking a substantially larger market.

What is unknown is how damaging this move may be to Pandora, Slacker, Sirius XM, Napster, Last.fm and others. Apple could make it difficult for the competition by allowing the LaLa app to run in the backround for example. This would mean, if LaLa was to become more of an online streaming radio service you could do things with it you couldn't do with other services unless you jailbreak your phone. Or it could integrate the app into the OS, making it preinstalled and perhaps add functionality which other programs have no access to. Then there is the potential for deep iTunes integration, etc.

Apple won't let on about what its plans are but it is worth looking at its other actions with the above in mind for future clues on what it will do in the streaming space going forward.



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