High Resolution Audio Isn't Coming Soon From Apple

Any day now Apple will flip the switch and offer high resolution downloads. That's what many people have said over the years since Apple first began requesting high resolution material from record labels and artists. The reasons given for this high resolution switch flipping have been countless and reported incestuously (yes, this is the correct word I want to use). Some tech sites will do anything for an attention-grabbing headline, even if it means citing another site who cited a blogger with no credibility. Pretty soon these sites may even cite themselves accidentally by using links that go through a number of URL shortening services. What follows is my opinion, not citing any other site, third party, or anonymous source close to Apple. Some of us have opinions and aren't afraid to share them without hiding behind the veil of "this just in from one of my sources." I could be absolutely wrong, absolutely right, or somewhere in the middle with my reasoning. I know for sure I'll be right or wrong with my conclusion that high resolution audio isn't coming soon from Apple. I'll even go one step further and opine that Apple won't release high resolution downloads for purchase or even a lossless CD quality streaming subscription service in the next three to five years.[PRBREAK][/PRBREAK]

The World's Most Valuable Company Can't Do Everything

Apple has so much cash in its reserves it could likely attempt to do what ever it wants. As everyone knows attempting to do something is far from delivering a finished product. Apple could attempt to offer high resolution downloads for purchase or subscription streaming without putting a dent in its quarterly financial results. However, here are my seven reasons why the high resolution speculation has been incorrect and why high resolution downloads won't happen in the next three to five years, if ever.

One. Wireless Carriers Don't Want High Resolution Downloads (Or Lossless CD Quality Streaming)

Apple has a tight relationship with US wireless carriers such as AT&T, Verizon, and T-Mobile. These wireless carriers would be irate if Apple offered a service that increased the use of bandwidth by a factor of roughly ten for high resolution music downloads or streaming. Even if consumers were willing to pay for much more total throughput per month, the carriers' networks can't handle the increased data for high resolution downloads or even lossless CD quality streaming for as many customers as Apple could enroll. As an AT&T Wireless customer with an unlimited data plan (no longer offered) I receive text messages from AT&T when I've used 5GB of throughput each month saying my download speed will be throttled because I'm in the top 5% of wireless data users. This quasi-data cap is easy to hit when downloading lossless CD quality music let alone high resolution. Other companies such as WiMP and Qobuz can offer this streaming because there is no tight tie to a wireless carrier. Online retailers such as HDtracks can easily offer high resolution downloads because 99% of its customers download music from a home computer using wired Internet access, and the volume isn't nearly as large as Netflix who has recently paid off Internet service providers to stop limiting traffic to its customers. In addition, synchronizing iPhones with computers, if Apple high resolution downloads were offered and purchased via a wired computer, is yesterday's news. The vast majority of iPhone customers never connect the device to a computer, not even for updates, backup, or any other reason. Also, Apple is all about the user experience and seamless integration. There is no way the company would only enable high resolution downloads via WiFi or a wired home computer. Plus, Apple's main customers are iPhone users, as evidenced by the fact that it has sold 500 million iPhones, 200 million iPads, and its Macintosh install base is only 80 million.

Two. Record Labels Want Control And Revenue Again

Ever since Apple persuaded the record labels to allow it to sell music for $0.99 per lossy track and roughly $10 per lossy album, the labels gave up control and revenue. Apple has essentially owned the music business. Record labels have one last shot at retaining control and increasing revenue from purchased content. This shot comes from sales of high resolution music. The record labels aren't going to let Apple flip the high resolution switch until they have wrung every penny out of high resolution sales through non-iTunes avenues. If Apple were to offer high resolution downloads it would likely price them near $10-$12 per album and $2 per track. Apple wouldn't shock its customers with majorly increased prices. This low priced and per track purchasing scenario would be déjà vu for the labels. Rather than allowing Apple to sell this content per track and at such a reduced price, the labels are going through online retailers such as HDtracks, Qobuz, and HiResAudio. Prices from these retailers are much closer to $20 or more. It's likely the customers purchasing high resolution right now would have purchased this music from iTunes had it been available for almost half price. Thus, the labels are wringing out every penny while they can. The PonoMusic Store will also be a major bonus for the record labels. I believe the labels will benefit more from high resolution sales through PonoMusic than any other outlet. There is a very harmonious and tight relationship between PonoMusic and the labels.

Three. Beats

Apple purchased Beats for its streaming service. Period. Apple is now a streaming company. Period. Apple has needed a lossy streaming service for years. As Steve Jobs said, "If you don't cannibalize yourself, someone else will." Tim Cook should have heeded this advice and started a streaming service earlier, even though it would have cannibalized the iTunes purchasing business. iTunes Radio was a terrible attempt at boosting sales of purchased music. It failed and most people should have known it would fail. The Beats purchase is all about streaming. Apple is going to let its purchase model die a slow death as it attempts to migrate users to Beats. It's a no-brainer for users. Pay $10 per month for 25 million albums or $10 for a single album or $10 for six to ten tracks. Apple will have no trouble migrating users. Apple is a streaming company now. High resolution music doesn't make sense for its business model when considering its move to streaming and its aforementioned relationships with wireless carriers. Apple didn't buy Beats for the hardware. Apple could have created its own headphones by outsourcing the audio design to a great company like Sennheiser and having Jonny Ive design the look and feel of the devices. Apple has talked to well known engineers from high-end audio companies and dangled job opportunities in front of these engineers as well. Apple could have its own headphones and components easily. Apple didn't buy Beats for Jimmy Iovine or Andre Young (Dr. Dre). Dr. Dre doesn't even have a role at Apple. He isn't a company guy who is used to working for somebody. In fact, he said he'd do "as much as it takes" for Apple. Talk about a noncommittal answer and unenforceable agreement. Apple could have hired these guys for far less than $3 Billion dollars. It would also have made more sense for Jimmy and Dre to accept a huge signing bonus and the paycheck from Apple to work for the company, and continued to shop Beats around for a different $3 Billion dollar deal if the two wanted to sell. Or, just hang on to the company and collect from Apple and Beats. Maybe nobody else would have paid $3 Billion for Beats and the other companies rumored to be in the Beats sale discussions wouldn't have been interested without Jimmy and Dre. I don't know the answer to this one. In addition to this Apple purchased Beats for streaming because Beats gives it much needed Cloud credibility. Like it or not, Apple is a failure with its Cloud services and needs credibility. Remember Mobile Me? Steve Jobs admitted this was a failure. Think iCloud is the answer? After three years iCloud Document synchronization still doesn't work. Apple history shows they don't get the Cloud. In fact its Cloud based services thus far run on Microsoft Azure? Thus, Apple purchased Beats for the streaming service and this doesn't lend itself to offering high resolution music downloads or even CD quality streams.

Note: It's entirely possible Apple purchased Beats to use up $3 Billion dollars. The company's shareholders have been clamoring for years about Apple returning money to them and using some of its huge cash reserve. The Beats acquisition could have been one way to take $3 Billion dollars off the shareholder discussion table. I believe this is a great additional reason for the Beats purchase rather than the sole reason. Apple has to do something with Beats. Apple can't just let it linger because it wanted to spend some money.

Four. Apple Has The High Resolution Content Only Because It Can

Apple has asked labels and artists for high resolution content, for its mastered for iTunes program, for several years. The company may have had an idea for high resolution offerings when it started collecting this content. However, I believe it's more likely Apple views it as simply better to have high resolution material in case you want it some day, even if there are no plans to use it. Thus, Apple doesn't have its massive internal library of high resolution content in order to flip the high resolution switch and begin offering this music to customers. A high resolution master in the hand, is worth two still at the record label.

Five. Apple Isn't A Specs Company

HTC recently released its new HTC One (M8) mobile phone and has been touting the ability to play 24 bit / 192 kHz music on the device. Apple doesn't care. Apple isn't a specs based company like all the companies selling Android devices. Apple has too many other selling points to worry about specs. Plus, specs aren't related to emotions. Apple sells by appealing to emotions much more than other tech companies. Beautiful looking devices, a genius bar, it just works, sleek looking iOS and OS X, etc… That is what Apple is all about, not touting chip specs as a major selling point. Apple doesn't even have specific model names for its computers other than something like Mac Book Pro retina mid 2012. Even though I'm typing on a Mac Book Pro version 10,1, most consumers will never know their Macs have such a number. How does this relate to high resolution downloads not coming soon? Apple won't increase music resolution to play the specs game if most of its customers don't care. Even if the iPhone 6 supports high resolution playback, this won't be an indication of anything other than Apple did it because Apple can or the chip the iPhone 6 will use likely doesn't come in a standard resolution version.

Note: Apple certainly offered the upgrade to iTunes content several years ago, moving music from 128 kbps to iTunes Plus 256 kbps. This step wasn't about specs. It was about sound quality audible by a large percentage of Apple users. But due to the size of high resolution music and all the aforementioned reasons, there won't be an iTunes HD upgrade path.

Six. Not Enough Apple Customers Care

High resolution music takes longer to download, that's a fact. Switching from 4 MB downloads to 100 MB downloads will impact the user experience for something about which iTunes users don't care enough. The same can be said for lossless CD quality streaming. There can be a delay compared to lossy MP3 quality streaming. High resolution and CD quality lossless streaming is coming to the US already and Apple won't join in because its customers don't care. Its customers won't wait the extra few seconds to load the content. Apple customers may like quality, but the majority doesn’t like taking a step backward in convenience and usability.

Seven. iTunes Doesn't Support Native Automatic Sample Rate Switching

The shrinking percentage of mainstream Apple customers who still use iTunes on the desktop, rather than iOS device, wouldn't be happy to learn they purchased high resolution content, but it's being resampled to a different rate because iTunes was locked in to something like 44.1 kHz. Yes, Apple could enable auto sample rate switching, but that would go against its reasons for not offering this feature. Macs need to play all kinds of audio at all times. Apple won't give iTunes exclusive access to USB DAC audio output because it causes confusion with end users when no sound comes out from a different application. Without exclusive access the sample rate could be changed by any app playing any sound at any time. It doesn't appear that Apple wants to make a change to enable auto sample rate switching. This could / would have been done long ago. Resampling everything is just a simple way to do things for Apple.

Conclusion

Apple isn't going to flip the high resolution download switch. There are too many reasons why Apple won't offer these downloads, including but not limited to, wireless carrier push back, record label desire for control and revenue once again, and my belief that the Beats acquisition is all about streaming and so is Apple. Sure, some of my seven reasons are weaker than others, but nonetheless there is some validity to each of them. There are also counterpoints to be made to each of my reasons. As a lover of music and sound quality I hope I'm incorrect. However, I stand by my conclusion that Apple won't release high resolution downloads for purchase or even a lossless CD quality streaming subscription service in the next three to five years.