Essay on Starbucks and Apple

707 WordsNov 17, 20123 Pages
Danielle Green IST5010 S01 Revenue Model Starbucks has agreed to a partnership with Apple to collaborate on selling music as part of the "coffeehouse experience". In October 2006, Apple added a Starbucks Entertainment area to the iTunes Store, selling music similar to that played in Starbucks stores. In September 2007 Apple announced that customers would be able to browse the iTunes Store at Starbucks via Wi-Fi in the US (with no requirement to login to the Wi-Fi network), targeted at iPhone, iPod touch, iPad, and MacBook users. The iTunes Store will automatically detect recent songs playing in a Starbucks and offer users the opportunity to download the tracks. Some stores feature LCD screens with the artist name, song, and…show more content…
Most of the benefit comes to iTunes media downloads. Starbucks’ indirectly gains revenue from paid advertisements on the Starbucks apps, as well as purchases made in the iTunes store. The Wi-Fi carrier benefit because they have contracts with Starbucks. These contracts guarantee the service will be delivered to all customers using the connection. The advertisers gain because users may click their ads and end up making purchases based off suggestions on the Starbucks applications. Starbucks now faces heavy pressure from fast-food restaurants, notably McDonald's, which invested in coffee and specialty caffeine drinks during Starbucks' time in the wilderness. Even Starbucks' switch to an all-free Wi-Fi system from a convoluted mix of free (for AT&T customers) and limited service (for stored-value card-holders) appeared following McDonald's decision to do the same. (AT&T operates Wi-Fi service for both chains.) (Babbage 2010) McDonalds could benefit from a similar partnership with Apple. It could be similar to the Starbucks partnership. McDonalds could use the apple cloud service to stream media. This would generate revenue for both the iTunes store and McDonalds. Another company that could benefit from a partnership similar to the Apple and Starbucks is Subway. Using the same model as previously stated,

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