Apple + Starbucks = Money

iPod Touch

I’m watching some of the live feeds for today’s Apple press event, and they’ve just announced (among other things) the iPod Touch, essentially an iPhone without the phone, shown above. I’ll almost certainly be getting one immediately; It looks real slick.

The biggest announcement to me though, is this new partnership between Apple and Starbucks that will let you buy tracks currently playing in Starbucks from the iTunes Store on your iPod. This is just the first step, but will surely change the way people shop for media. Location and context-based digital shopping is now here, in a small way, but it’s here nonetheless.

I do have an issue with this, though (as does Ryan Block at Engadget). While they’re giving you ‘free access to the iTunes Store’ on your iPod (goodie!), it doesn’t sound like they’ll give you free WiFi access as well. That’s pretty shady for a company that’s clearly going to massively benefit from this arrangement. Giving people the ability to surf the Web while on the store is only going to keep them there longer — potential for more sales, both of product in store and through the iTunes WiFi store.

Extend the ability to buy songs playing in Starbucks to other retailers, movie theaters for instance, where you could buy the soundtrack to the movie or even the movie itself immediately on the spot. This would absolutely clean up, but would require Apple to make partnerships with a ton of movie theaters, film producers, and so on. In other words, lots of red tape.

Go further with the idea.

Let me browse a retail store’s inventory from my iPod, from anywhere with WiFi. Let me add things to a cart, purchase them with my iTunes account, and then pick up the pre-paid items in store.

Embed an RFID chip into the iPod and link it to my iTunes account. Allow Starbucks, or any other retailer to let me use my iPod to pay for stuff like you can already do with the Mastercard touch-n-go and so on. The possibilities are really endless with this when you have such a ubiquitous device.

What’s in this for Apple? Commission. Just like they get sales from every song and video they sell on the iTunes Store, they could charge retailers a fraction of each purchase, generating huge revenue.

September 5, 2007 | Filed Under Uncategorized