Barron's reports on an interview with Charter Equity Research Managing Director Ed Snyder. Who is Ed Synder?
Snyder is a former telecom engineer, who has been covering the telecom industry since Alexander Graham Bell called for Watson. And I have found him mostly right about things telephony, with wires or without. One of his basic tenets throughout the evolution of wireless phones has been that music is the killer application. The key to Apple's (ticker: AAPL) strategy of linking the iPod Touch, iPhone and iPad with one operating system, the iOS family, has been iTunes' central role in managing music, applications and software updates. The easy, seamless ability to transfer music from the iPod via iTunes to the first iPhones was a huge factor in the Apple smartphone's acceptance and continued success. That, in turn, is driving iPad sales.
Ed brings up Music as the killer app for Google.
Now, Snyder suggests that music is the application that could provide Google's (GOOG) open-source Android OS the chance to leap over Apple. The analyst predicts that the next-generation music platform, which is likely to be cloud-based, will be the major battlefield in the smartphone war over the next year or so.
And mentions data centers as a key to Google's strategy.
Snyder says that Google must offer a content-delivery system similar in function to iTunes, but based in a cloud—meaning music is stored in one of Google's famous data-center clusters somewhere and delivered via the Internet and over airwaves to various devices. (ITune libraries sit on the local hard drive of personal computers). He thinks that Google should strike deals with (or, I suppose, buy) one of the many cloud-based streaming-music services already used on wireless devices.
Smartphones, Music, and Data Centers are Google's opportunity to eat Apples' lunch.
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