Inbound Thinking

As you may be aware, Eric Schmidt, CEO of Google, joined Apple Computer’s board of directors in August of this year. While there may be a wealth of reasons why such a move would be beneficial to both companies, I have developed my own theory as to what one of the motives of this action might be, and it could mean a digital media revolution.

Looking at Apple, in their most recent press event they released the ‘completely remastered’ iPod nano, updated iPod, redesigned Shuffle, and new version of the iTunes store. The nano was, of course, a precisely timed face lift and release of a product with peak holiday season sales. The updated iPod is likely buying Apple time to finish work on the much rumoured ‘true video iPod.’ Also, the price shift of the flagship device has left a convenient opening at $299 for the impending ‘iPhone’ release. The Shuffle redesign is a natural progression of the device, leveraging Apple’s mastery of aluminum and flash memory.

iTunes 7, however, may be the big news out of recent Apple announcements. Bringing movies into the store, increasing the size of all video to 640×480, along with a facelift and interface improvements add up to a significant iTunes upgrade. The addition of movies to the store, while not a surprise for many, is a big commitment. Not just because of licensing and distribution issues, but because of the sheer size of the files. A broadband connection and iTunes’ new download manager help the situation, but do not relieve it completely.

Google has, in the previous years, purchased ‘dark fiber,’ so-called because the light transmission cables are not being used. The investment in these lines could not have been insignificant, but with Google’s horde of spending cash, such a purchase would not raise any red flags.

Apple wants to change the way we think about media. They want to provide access to any song, TV show, or movie, wherever we want it, whenever we want it. But to provide that, they need access and bandwidth, lots of it.

Google wants to make the world’s information more accessible, and has dabbled in video distribution and sales.

Now, with the cooperation of Eric Schmidt and Steve Jobs, and a unified goal in sight, Apple will use Google’s massive network and infrastructure to provide incredibly fast downloads of media, and potentially, the ability to distribute High Definition media globally.

The ongoing battle between HD-DVD and Blu-Ray may be over before we know it if Google has the bandwidth to provide HD content, and Apple has the charisma to get the industry on board with it. iTunes and iPod already have the user base to make such a venture successful, and for Apple and Google’s competitors, catching up may be nearly impossible.

Only time will tell if this scenario can, or will, play out. I would look to the beginning of 2007 for the first indications of this alliance. When holiday iPod sales have slumped and a new video iPod is released, the demand for high quality movie downloads will peak, and we may witness a revolution.