Home > Apple, Technology > The Lala and Quattro Acquisitions are All About the Apple Tablet

The Lala and Quattro Acquisitions are All About the Apple Tablet

January 26th, 2010 Leave a comment Go to comments

There has been a lot of speculation about what the LaLa acquisition could mean for a future cloud-enabled version of iTunes. Similarly, the recent Quattro acquisition has spurred a lot of conversation about what Apple might be doing with an advertising platform. While reading an article about Disney’s plans for digital content on NewTeeVee.com earlier this month, some new [no pun intended] thoughts struck me. On the eve of the event announcing a “major new product that [Apple is] really excited about” these ideas have only been reinforced by some details emerging in other rumor reports.

Disney Matters to Apple

At CES, Disney announced that they are developing a DRM technology called “KeyChest” that will allow customers to purchase a piece of digital content and unlock the ability to access that content in multiple ways. The goal is truly “anywhere, anytime” access to digital content that could be on a computer, mobile device, the web and even third-party services.  One of the possibilities touched upon by Ryan Lawler at NewTeeVee is that a purchase of a Disney DVD would unlock immediate access to stream that content to a computer or mobile phone.

Steve Jobs has made a personal fortune through Disney/Pixar entertainment. iTunes currently sells digital downloads of Disney movies and even provides the free Disney File downloads through codes that come bundled with a physical DVD or Blu-ray disc.

Is there any scenario in which Steve Jobs, as a Disney board member and the largest private stockholder, is not briefed on Disney’s plans to use this new technology to control the distribution of their media? Is there any scenario in which Steve leaves that briefing and does not decide that iTunes needs to be involved in these KeyChest transactions, including full support for streaming protected content purchased online?

Lala was not Acquired for the Lala Service

Lala was all about engineering talent and expertise. The Lala acquisition makes perfect sense if Apple wanted to bring in a team of engineers with a lot of experience in streaming content. I think that Apple is less concerned with Lala’s existing business model of syncing your own content to the cloud than it is with making sure that iTunes can still be involved in Disney’s plans to make both download and streaming protected, purchased content available online.

If this “Major New Product” (MNP for short) is a tablet, wouldn’t it be great if you could buy a movie on iTunes and immediately start streaming it to the MNP while iTunes is downloading it to your computer?

Quattro is not About iPhone Apps

When Apple purchased Quattro, there was a lot of talk about how this might impact iPhone developers who were looking to integrate ads into their products. Most arguments hinged on the idea that Apple wanted to grab a piece of the action in mobile advertising. I think Apple has bigger revenue opportunities and iPhone developers were doing just fine at putting ads into their products with some existing third-party services or even rolling their own. There’s something else going on here.

Looking at the rumors this week that Apple has been meeting with publishers like the New York Times to brief them on the “major new product” to be launched on Wednesday, what comes into focus for me is that these are the people that need help with an advertising management system. Apple is building a comprehensive platform for traditional print publishers to move online.

Newspapers and magazines were built on advertising revenue and this is a business model that print people understand. They want to hold on to their advertisers and keep that slice of the pie in the digital era. I believe Apple is courting papers like the New York Times with the message that they can offer a full service solution. AdKit (or maybe CoreAds?) will be an important piece of iPhone OS SDK 4.0 so that publishers can easily integrate advertisements into their digital content like ebooks and digital magazine editions.

Beyond the AdKit API’s, expect Apple to offer ad tracking and metrics directly into iTunes Connect so that publishers have a dashboard to track all the revenue from their products, both direct sales and display advertising within the product.

Is all this infrastructure in place after Apple acquired Quattro on January 5th? Absolutely not. But just like the Lala acquisition, Apple has bought a team that can get them a big leg up in this effort. Expect to see AdKit and the iPhone OS 4.0 SDK announced tomorrow with availability of the service to launch later in the year (think iPhone 3.0 SDK and the push notification service).

Both Acquisitions are About the “Major New Product”

Streaming media content and mobile advertising for content publishers are perfect for a tablet device. You have something to watch without requiring onboard storage of your whole library and ebooks and digital magazines have an easy way to transition content including interactive advertising. If all reports are on target, media and digital publishing are going to be big on this “MNP” to be announced.

Here’s another idea… why not show you an ad while you are waiting for Toy Story or Wall-E to stream to your MNP?

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