Today in San Francisco, Steve Jobs presided over one of the more product release packed press events in recent memory. We saw the entire iPod product family overhauled – new colors on the shuffle, a total redesign of the Nano (with video), larger hard drives and lower prices on the iPod Classic (as well as a new enclosure), and the introduction of the new iPod Touch with WiFi.
Jobs also had a guest on stage toward the end of the program: Starbucks Founder and Chairman Steve Schultz. Schultz was there to promote the new partnership between Apple and Starbucks, which is basically this: You walk into a Starbucks and order your latte. The song playing on the store’s stereo catches your ear. You pull out your iPhone/iPod Touch, which automatically senses that you’re in a Starbucks, and knows what song is currently playing. You can purchase the song over Wi-Fi before the barista is finished making your coffee.
Cool, but it’s certainly not going to “transform the marketplace” (to quote Steve) is it? I’m telling you that it will. And not just the coffee market, or the phone market, or the MP3 market. I mean the whole market.
Why is this such a big deal? Because the iPhone and iPod Touch are now location aware. We’ve been hearing about location based services for a while now, and there definitely some cool startups out there that try to bring people together based on location. However, this is the first time (to my knowledge) that it’s been leveraged to drive consumer spending. iPhone users can now make a purchase that is directly tied to the location they’re standing at that very second.
The feature as it stands now is not that amazing, nor is it going to radically change many people’s lives. However, imagine the ways that location based purchasing could be extended: Pre-order the DVD/MPEG of a movie as you walk out of the theater. Buy a song’s MP3 as your favorite artist plays it on stage at a concert. Receive a coupon for 10% off upon walking into a department store, encouraging you to buy more. The possibilities are endless.
Sure, all of this requires that infrastructure be built out in all of these places to notify your iPhone of its location. It will take time. But if Apple is smart (and I think they usually are), they will continue to expand the location based services on their mobile devices, and open up additional revenues for both themselves and entertainment venues and stores that did not exist before.
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