Column: If iTunes Radio won't be profitable, what's the point?

When Apple got into the music business in April 2003, the company didn’t actually expect to make money at it. The iTunes store launched with only “break-even” ambition as far as Cupertino was concerned, merely acting as a hook for the real profit center: The iPod.

So much for self-fulfilling prophecies. Five years in, iTunes had unseated Wal-Mart as the country’s leading music vendor and assumed the top spot in the global market by 2010. Last year’s sales hit $13.5 billion, with Apple generating up to 15% operating margin on gross revenue while commanding 64% of the world’s online music sales.

Now, as Apple takes its next bite out of the music industry with the upcoming iTunes Radio - launching as soon as September - “aim low” is, once again, the M.O.

When Apple got into the music business in April 2003, the company didn’t actually expect to make money at it. The iTunes store launched with only “break-even” ambition as far as Cupertino was concerned, merely acting as a hook for the real profit center: The iPod.

So much for self-fulfilling prophecies. Five years in, iTunes had unseated Wal-Mart as the country’s leading music vendor and assumed the top spot in the global market by 2010. Last year’s sales hit $13.5 billion, with Apple generating up to 15% operating margin on gross revenue while commanding 64% of the world’s online music sales.

Now, as Apple takes its next bite out of the music industry with the upcoming iTunes Radio - launching as soon as September - “aim low” is, once again, the M.O.

Full story at Minyanville.