Mystery Apple iTunes Announcement Won't Be Music to Investors' Ears

Apple has scheduled an iTunes announcement Tuesday. As Apple (AAPL) gears up to make an iTunes announcement, the front of its Web site bragged that it would be a day that "you'll never forget." But at least one analyst predicts that the news won't be so memorable for investors.

"It'll be a big yawn for investors. They're trained to expect big things from Apple like an iPad, or an iPhone or some kind of gadget," says Trip Chowdhry, an analyst with Global Equities Research. "It'll likely be an iTunes enhancement and that's a nonevent for investors."

He expects enhancements such as an iTunes video service or usability improvements. "I don't think investors will be excited by usability and service enhancements, but customers should be," Chowdhry says.

More Speculation

Other analysts are predicting more radical changes. Some say they wouldn't be surprised to see Apple's iTunes service move up into the cloud, meaning it would be an Internet application instead of an offering that gets downloaded to a device or computer. Others speculate that iTunes could become a subscription service.

Meanwhile, Billboard.biz is predicting Apple will announce it's offering the Beatles catalog at its music store. The collection has eluded the company for years, and rumors abound that Apple may finally be about to unveil a licensing agreement for Beatles songs. But even a Beatles deal would be unlikely to boost iTunes enough to trump Apple's iPhone sales or make a significant impact on the company's overall revenue.

Chowdhry notes that Apple's software sales, which includes iTunes and transactions from its App Store, usually generate a mere $400 million to $500 million out of its billions of dollars of quarterly revenue. In the third quarter, for example, Apple posted a whopping $20.3 billion in sales.


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