The fourth part of our end-of-year roundup, originally published in the Music Ally report. New to the series? Start from part one.Apple never did make its money from music, but (partly) from hardware sold to store and play that music. Yet in 2010 it became clear that now, what’s driving those hardware sales isn’t music any more. It’s apps.Apple sold 14.1 million iPhones, 9.05 million iPods and 4.19 million iPads in the third quarter of this year alone. More than 300,000 apps are available in its App Store, but here’s the important stat from Music Ally’s perspective: The iTunes Store generated revenues of more than $1 billion in the third quarter of this year, yet in the same period, the company’s recognised revenue from iPhone handset and accessories sales was $8.82 billion. Much of that down to the promise of apps.However, this year also saw the music industry jump willingly onto the apps bandwagon, usually with the admirable goal of experimenting to see how apps could provide new revenue streams and/or marketing channels for music artists. And sometimes with the less-admirable result of, frankly, pissing money away.What’s important are the lessons. Universal Music Group launched social location apps for Short Stack and Soulja Boy, set itself up as a games publisher with Six-String and Rock Guru, dabbled in augmented reality with French artist Empire Isis, and ended the year with a new app publishing sub-brand, ‘U-Apps’.That said, when it came to launching an app for Take That, the UK man-band expected to be one of its biggest releases of the year, UMG opted to go with apps platform Mobile Roadie instead. Mobile Roadie supplied a welcome note of realism during the year, talking about the effect of its apps for artists in terms of metrics like amount of music sold and email addresses harvested – tangible measurements of return on investment.Elsewhere, music game developer Tapulous cashed in on its 35 million player community by selling out to Disney, big-name console music game franchises Guitar Hero and Rock Band both appeared on iPhone with in-game download stores, and even ABBA launched their own karaoke iPhone game, seemingly modelled on Sony’s SingStar games for PS3.Apps were the story of mobile music in 2010 – which detracted from the decline of other forms of mobile music. These were represented most clearly in Japan, where sales of ringtones have fallen steeply without being made up for by full-track sales. In the US, Verizon Wireless has also confirmed that its content sales have been slipping since 2009, and elsewhere in the world there was markedly little talk about full-tracks.What was big, though, were streaming music apps. Iphone fuelled record growth for Pandora in 2010, accounting for as much as half its usage by the end of the year. Spotify’s iPhone, Android and Symbian apps were crucial ingredients in the growth of its premium subscribers, while Rhapsody, Thumbplay Music, Slacker Radio and others all made a splash with their apps.Smartphone users might not be buying songs from the iTunes Store, but they were certainly looking to consume music on their devices – on an on-demand basis with the option of cacheable playlists ideally. Even on iPad, music indexed highly as a desired use for the device repeatedly in studies, ahead of the more-vaunted e-publications that were so hyped within the newspaper and magazine industries.It turned out that people really do value mobile music – just not in the way the mobile or music industries expected back in the days when full-tracks were the next saviour of the music biz.Music Ally Trends of 20101. Growth and Decline2. Pressure on ISPs3. Pirates Under Attack4. Mobile Apps Mania5. Clouds and Silver Linings6. The Economics of Streaming Music7. Music Gets Socialised8. Google versus the Music Industry9. Music Investment10. Music TV Makes a Comeback

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