Apple Server Farm and 3 Consumer Reasons For It

(MoneyWatch)  The rumors of Apple planning on a billion dollar server farm are hot and heavy. It may be so much talk, the general idea might be right but the amount grossly exaggerated, or it could be accurate. Apple certainly has need for servers -- maybe management's hoping that more hardware might fix the noted problems with MobileMe, and it does have all that iTune business. But there have been signs that perhaps the company is planning a series of new services for consumers.

My colleague Michael Hickins explored the possibility of delivering an application suite as services for a mobile device, whether iPhone, enhanced iPod, or a multi-touch netbook. After all, Intel has admitted that netbooks have already cannibalized 20 percent of the laptop market.

The interesting question to me is exactly what new services it might offer. The last few months have suggested some potential answers:

• When Michael argued that Apple would have to develop a netbook, I countered that it would be doomed to failure, because the company's strategic approach to business couldn't afford to sell one at the price it would need to reach. However, a recent promotion of offering an iPod Touch with the purchase of a qualifying iMac or MacBook. Sure, it's partly clearing out hardware to make way for new models and partly trying to jumpstart slowed computer sales. But it shows that Apple is ready to give a little to get more. So why not give away a year of extensive software-as-a-service to make the price of a netbook seem lower?
• As I and others have mentioned, there is evidence that Apple is developing a combination game and media mobile device. High-end games can take up a lot of room -- gigabytes worth. That would mean a lot more storage than the video, audio, and iPhone apps that the company already offers.
• There is also the rumor that the new Apple netbook is actually an e-book reader. Add together iTunes, games, and e-books. Maybe Apple sees itself as becoming a direct competitor to Amazon, at least on the electronic front.

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