But a few high-profile failings have shown that the company is indeed mortal, most recently with the high-profile implosion of Maps, or the ill-fated Ping – Apple’s half-hearted attempt to shove social networking into iTunes that was mercifully cut short (in favor of integrating Facebook and Twitter).

Before weighing in on Passbook’s fate, let’s first look back at some other potentially disruptive digital commerce technologies in the past –both successes and failures – to determine what crucial elements will be required to hit critical mass with consumer adoption.

The Losers

Let’s start with the losers. Remember Flooz? (No? Exactly!) The late ’90s dotcom paid precious startup cash to Whoopi Goldberg to promote an alternative currency to be used just on the Internet, but it was offering a solution to a problem that didn’t yet exist. The need for an alternative form of payment online was simply not clear to consumers at the time. It failed to attract merchants and users and was eventually shut down after about two years amid a bankruptcy filing.

More recently Facebook – certainly another obvious pick for assured front-runner status – killed off its own high-profile foray into virtual currency. After three years of trying, the company unceremoniously shut down Facebook Credits in June, opting instead to focus on beefing up its payments capabilities.

And then there’s Google’s efforts to do away with the physical wallet. While it’s too early to dub it a loser, the company has been tight-lipped with data around transactions processed via Google Wallet. And continued media coverage points to slow adoption, and leads to questions around its necessity. While the wallet-free concept is appealing on the surface, the rub it seems is that the effort on the part of the merchant is complicated and costly.

The Winners

PayPal was among the earliest contenders to seize on a market opportunity that many major credit-card companies and traditional commerce outlets missed (or underestimated). By providing an easy way for people to pay online without having to sacrifice time or security, PayPal offered a simple solution for a problem that was emerging alongside the rise in e-commerce and especially online peer-to-peer marketplaces like eBay. PayPal will now try to extend its reach offline having partnered with Discover Financial Services and multiple retailers, including Home Depot and Barnes & Noble.

Another standout market transformer – which, notably, primarily benefits merchants – is Square. Using a postage stamp-sized dongle, Square has significantly expanded the offline commerce market by enabling anyone with a smartphone to sell anything, almost anywhere and anytime. Its traction has been measurable, and it recently announced that it is already processing more than $10 billion in payments a year, with some three million merchants using its service. A recent deal with Starbucks should help propel user adoption dramatically.

If it’s not broken…

The key with both winners is ease and convenience — both PayPal and Square require little effort on the user’s part, but offer high value in return. PayPal builds on something most people are already using, namely online commerce , but adds the critical element of security.

And Square requires a fraction of the investment on the part of the merchant compared to traditional POS card readers – which can cost $10,000 to $15,000 – and actually makes the transaction easier for all parties involved. Let’s also not underestimate the appeal of the ‘cool’ factor with Square. As an example, take your local food truck, which now has access to cutting-edge technology enabling it to deal with potentially more customers; consumers benefit by simply being able to quickly sign their bill with a finger and receive an instant email receipt. Because of these ease-of-use advantages, Square has exploded while mobile wallets have at best lingered, with none poised to catch on.

Recently, I attended the Money 2020 conference in Las Vegas where attendees and speakers were providing a reality check on the state of mobile commerce. In one session, Jennifer Schulz, head of global product strategy at Visa, summed up the issue succinctly: “There won’t be mass adoption of mobile payments until there is a better consumer experience beyond the card.” I couldn’t have said it better myself. (Full disclosure: I work at edo, a card-linked offers provider).

Duplicative vs. Daring

Companies looking for innovative ways to engage with consumers, especially around mobile payments, should first and foremost focus on building solutions that are easy for all parties involved  ̶  consumers, banks and merchants  ̶  and that tap into a long-standing need in the marketplace. In the case of Passbook, the problem I see is that it’s not layering anything new onto my iPhone experience. To the contrary, my question about Passbook is why I need it, when I already have all the apps I want on my smartphone.

Even at this early stage of its functionality, Passbook should be more than simply an aggregator of digital cards and instead offer something truly unique. Currently, users must first download the brand’s mobile app (Starbucks, United Airlines, Sephora, and so on) and then connect the app into Passbook. Early users are finding this process confusing and duplicative, expressing frustration around the manual work needed to add different cards and services into Passbook, with limited return. In addition, the number of participating merchants is still very limited, and even those that exist often offer restricted availability. For example, McDonald’s has integrated with Passbook, but (curiously) only in France.

Passbook then is at best a novelty at this point. While there’s certainly the possibility Apple will revamp the app wholesale, and in turn gain meaningful traction, I’m more inclined to put my money on the bet it’s destiny is to join poor Ping in the ignominious Apple Graveyard. I think that nothing will replace ubiquitous credit and debit card payment systems until a service comes along that is a dramatically simpler solution, or offers compelling additional functionality that encourages people to leave their cards (and wallets!) at home. Given Apple’s dominance as the mobile device of choice around the world, Passbook has as strong a shot of success as anyone, but only if they figure out how to overcome these limitations. Until then, plastic will still be king.

Jeff Fagel is Vice President, Marketing and Brand Development at edo Interactive. You can find Jeff on Google+ and Twitter.

Photo courtesy of Shutterstock/Pressmaster.

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This is not a huge surprise. Ping never gained much traction, and was hurt by its lack of Facebook integration from the get-go.

CEO Tim Cook hinted the end was near for Ping when he spoke at the D10 conference in June, when he said, “We tried Ping, and I think the customer voted and said ‘This isn’t something that I want to put a lot of energy into.’”

This doesn’t mean Apple has given up on social. Since the Ping disaster, Apple has heavily integrated Twitter into iOS and Mac OS X, and Facebook into iOS 6. As Cook put it at the same D conference earlier this year, “Apple doesn’t have to own a social network, but does Apple have to be social? Yes.”

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Shazam has gotten a lot of mileage out of its music tagging application, which has been snapped up by 165 million users since launching in 2008. But now the company is rolling out its first new app, called Shazam Player, a free replacement for the iOS music player that provides a deep set of features, including synced lyrics, social sharing, smart playlists, bios and more.

Shazam isn’t just content to help people recognize music on the fly; it now wants to be at the heart of people’s everyday listening experience. It is applying some of the lessons gleaned from its audio identification experience to a user’s existing music library, giving them a more interactive and powerful experience with their own media.

“This is a replacement for the music player on iOS devices. We have great technology and features we can wrap around any track, but it’s been so far limited to music you can discover out and about. We thought we’d bring the feature set and technology to music you have on the device already,” said David L. Jones, Shazam’s EVP of marketing.

The most eye-catching feature is LyricPlay, which was first introduced on the Shazam app back in June after Shazam bought Tunezee. Instead of accessing lyrics while tagging a song, now users can pull up lyrics for many popular songs in their own library. Jones told me last month that there were about 50,000 songs available for LyricPlay, which requires licenses from the rights owners.

Shazam Player will also feature social sharing on Twitter and Facebook, fulfilling some of the promise of what Ping was supposed to do for iTunes. There is also quick access to related YouTube videos, concert and ticket information, as well as bios and reviews about artists.

Shazam Player also tries to help people discover more music with a “top tracks” feature that lists top songs with LyricPlay functionality. Users can buy songs from the list using links to iTunes. Likewise, people can browse artists in their library on iTunes to discover more albums from their favorites. There is also a playlist function, so users can choose their favorite songs but also hide ones they don’t want to hear. Shazam has included a button that launches the original Shazam app for music tagging, but for now, the two apps will remain separate. Jones said the company is looking to see how the stand-alone app performs. It will get help from a cross-promotion link in the original Shazam app. An Android app is in the works for the near future.

It will be interesting to see how many people take up Shazam Player as their main music player. I have been turning to Spotify lately, so I don’t play much from my own iPhone library. Shazam has a deal with Spotify to play tagged music via Spotify in Shazam’s premiums apps, so that alternative is already covered. I like my fair share of karaoke, so I do think I would get some use of out of LyricPlay, though it sounds like it wouldn’t cover many of the tunes in my library. SoundHound has a much larger selection of songs in its LiveLyric feature on its music recognition app.

But being able to share my music and interact with it more does seem appealing and like something Apple should consider for future versions of iOS. It has a way to paste in lyrics through iTunes; and it tried to get more social with Ping, but there is still a lot of room to grow, especially as apps like Spotify raise the expectations of what you can do with music.

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According to a report from the Wall Street Journal, the music service Google is close to launching will include sharing features via integration with its Google+ platform, which isn’t that surprising, since Google has said the new social network will be part of everything it does. For Apple, however, the new social features in Google’s offering will reinforce what Spotify and other music services have already made obvious: Apple and iTunes are falling behind in the social-music race, which could have significant consequences for the company as the music industry continues to evolve.

By any measure, iTunes is still the 800-pound gorilla of the digital-music industry: More than 10 billion songs have been downloaded since Apple launched the service in 2001, and some record labels and music publishers now get a huge proportion of the revenue they make on their artists from iTunes. By launching the service — along with the iPod, which turned 10 years old on the weekend — Apple effectively re-engineered the entire music industry, convincing the major labels to use it as a conduit to reach music lovers who were busy downloading whatever they could get their hands on.

Obviously, that kind of power means iTunes isn’t going away anytime soon, and it will continue to be the main choice for record companies who want to monetize an artist. But the music business is changing — along with virtually every other form of media and content — as a result of the increasingly social nature of the web. And in that particular race, services such as Spotify are winning, in part because of their integration with networks like Facebook and their focus on streaming over buying.

Streaming and sharing is the new downloading

Facebook and Spotify have gotten a lot of criticism since the social network launched its “frictionless sharing” features, which allow services like Spotify to publish sharing info to a user’s Facebook page without having to ask permission every time. Many users have complained about this behavior — and that Spotify requires that anyone signing up have a Facebook account to connect to — and some have no doubt cancelled their accounts, but they are likely in the minority. In the end, this new kind of sharing, which shows links to what friends are listening to in the “ticker” stream on a user’s page, could be a hugely powerful driver for the industry.

And what kinds of weapons does Apple have? It has its massive market dominance — and it has Ping. Remember Ping? Apple’s music-based social network launched last fall, and was designed to do something similar to what Spotify and others are now doing: make it easy for users to share their activity and convince others to buy music. Except that Ping almost instantly looked like a social network from the late 1990s rather than a contender for the music-sharing future: as GigaOM’s Cyndy Aleo argued at the time, it looked lame in part because it wasn’t connected to anything else, and it made sharing surprisingly cumbersome (for his part, Om said that he thought Ping was part of “the future of social commerce”).

Ping shone a spotlight on one of Apple’s major weaknesses, which is a lack of knowledge or experience with social networks or social behavior. The company’s products are famous for their brilliant design and usability, but virtually none of that applies to things like Ping or Apple’s Game Center network (or to iTunes itself, arguably) since both seem more like ghost towns and afterthoughts than powerful competitors.

Twitter integration may not be enough

In an attempt to bolt on some form of social behavior, Apple added support for Twitter to Ping, and more recently it has integrated Twitter into many of its apps and services through iOS 5 — a ground-breaking move, since it rarely gives that kind of preferential treatment and real estate to a third party. (It tried to negotiate a Facebook deal but was rebuffed, presumably because of Spotify). This was a smart decision, since Twitter accomplishes much of what iTunes and Ping do not: Users can easily send out links to what they have bought or are listening to, and those links appear in the “media pane” at Twitter’s website and can be easily clicked on.

Despite this, however, it still feels like Apple is fundamentally playing catch-up in an industry that is moving rapidly towards sharing and streaming of music rather than simply purchasing, a la iTunes. With social services like Spotify and Rdio and MOG — not to mention Turntable.fm and Soundtracking — it is all about sharing music with friends rather than just acquiring it to keep forever. So how is Apple going to compete in this new kind of landscape? It will soon launch a streaming feature called iTunes Match, but the social element continues to elude it.

For the time being, at least, iTunes will remain the store of choice for many when it comes to buying music. And those who see their friends listening to music via Spotify and want to buy the same track may go to iTunes to do so — but then again, they might not. And if Google and Facebook integrate support for instant payments via Google Checkout or Facebook Credits, what kind of draw will Apple or iTunes have for new users then? The market dominance that Steve Jobs so brilliantly executed continues for now, but that dominance looks more and more precarious every day.

Post and thumbnail photos courtesy of Flickr users Josh Lindsay and Yodel Anecdotal

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Exfm is the free iPhone client for an existing service that started life off as ExtensionFM, a Chrome extension that lets you grab and build playlists out of free MP3s posted to blogs. It also lets you both listen to those and share them on Twitter, Facebook and other social networks.

The iOS app doesn’t let you collect music tracks itself, but it does grab songs you mark as “noted” using the Chrome extension, letting you play them back on your iPhone via streaming over Wi-Fi and 3G.

Exfm scratches a couple of itches that Ping doesn’t: It doesn’t depend entirely on users having a strong network to function, since it gathers tracks for your consideration from music blogs, and it also actually lets you play music from your built-in iPod app and “note” those songs, which means you can share your musical tastes with your social network contacts as you listen.

One of Ping’s greatest weaknesses is that it doesn’t plug in to a user’s actual music library or let her use it easily while she’s listening to music. If I have to go to my library, find the track I’m hearing, and mark it as Liked in the desktop version of iTunes, most of the time I’m not going to bother. If, on the other hand, I can just unlock my iPhone (where I do the vast majority of my music listening, anyway) and, using a single tap, recommend a track, I’m much more likely to participate.

To be fair, Apple did introduce the ability to Like and post comments about songs in the iPod app in iOS 4.3, but it works with tracks purchased from the iTunes Store, which leaves a lot of uncovered ground for many users. Exfm works with anything in your library, and it connects you to Facebook, Twitter and Last.fm friends in addition to those who also use Exfm.

Apple partnering with Twitter to make iOS more generally social is a good idea. If Exfm’s early efforts with its iPhone app are any indication, Cupertino should think about cutting its losses with Ping and teaming up with theses guys to shore up that side of its mobile business, too.

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For the past few months, I have been hearing about Facebook and Spotify getting a lot closer as companies, with a much tighter integration between the two services. However, Facebook’s musical ambitions go beyond Spotify and include other music services and applications. The company is currently working on lining up more partners for the 2011 edition of f8, its annual developer conference, which is most likely to be held in August 2011.

It seems that Facebook, after consolidating its position in three major Internet sectors – retailing, news and games – is now getting serious about music and media. At The Cable Show held recently in Chicago, Comcast CEO Brian Roberts extolled the values of cloud-based services and explained why cloud-based guides and interfaces are going to be key to television’s future. He showed off a deep integration with Facebook that can make television more social with recommendations from your social graph.

Just like Comcast, Spotify already allows you to share the information about the song that you are listening to on Spotify with your Facebook friends, but the next level of integration is going to be much deeper. And it won’t be just Spotify – my sources tell me that Facebook has been reaching out to other online music services and much of the attention at f8 should be focused on music. Facebook Connect and Facebook Likes are key components of this effort.

Facebook Music Features

Whether it is Pandora, Turntable.fm, SoundCloud or iTunes, listening to music, sharing music and then talking about is inherently a social activity and it makes perfect sense for Facebook to encourage this social behavior. Also, as we become an always-connected society, the idea of downloading and buying music is slowly giving way to the idea of “subscribing” to a giant library of music.

Facebook’s music plans are aimed at capitalizing on just such a future. Here is what Facebook is planning to launch as part of its music efforts, based on pitches it has made to some of the music services:

• In the left-hand column, right where Facebook lists Photos, Friends, Places, Groups, Deals, Pages, and Games, you will find a new tab called Music. This tab will show up if a user has listened to music with one of Facebook’s partner music services.
• Clicking on this new tab will open a page called Music Dashboard.

• The Persistent Playback/Pause Button at the bottom of the Facebook page, where currently you have the chat icon. This button essentially is like a quick snapshot and controller of the music experience. Mouse over it and you can see what is playing on whatever service you might be logged into using Facebook Connect. It also allows you to play or pause a track once you discover it on Facebook. It is also linked to the play buttons in the news feed.
• A page with snapshot of all the songs you have listened to on any specific service and also your top tracks and the number of times you have listened to those tracks.

Facebook’s push for integrating deeply with music services is understandable. The company wants everyone to keep coming back to their website – if they don’t, then they cannot sell the ads they need to keep those revenues growing.

Music Equals Social Commerce

In addition, this could also be the start of a new kind of social-powered e-commerce business, something I discussed in one of my Om Says newsletters – So what comes after Social Commerce.

When Apple launched its Ping service, I was pretty excited by the idea of that service and what it meant for the future of commerce. Here is what I wrote then:

This click-and-go-somewhere-to-download model of affiliate links can never match a unified experience. Amazon, for example, encourages bloggers and others to link to things they like and then get a piece of the action. This separates social from commerce and treats them as two discrete activities. On the post-Facebook Internet, I don’t think anyone can afford to keep these two actions distinct.

Ping, from what little I saw during Steve Jobs’ demo, allows a similar level of social interaction. It can tell me who my friends think are cool and the top 10 favorites of people in my social graph. Some of my friends are famous deejays. Others just have eclectic musical tastes. They can collectively sift through over 10 million songs and help with the discovery of music.

Unfortunately, Apple never did things right with Ping and it seems Facebook is on its way to becoming a worthy challenger – without even having to deal with the record labels.

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Is 2011 the year of online music? It sure seems that way. From the introduction of iCloud and cloud music offerings from Amazon  and Google  to Spotify’s rapid growth in Europe to this week’s public offering by Pandora , digital music has never seemed more interesting.

Or more social. As Om wrote in his post earlier in the week, hot new social music site Turntable.fm is proving to be highly addictive for many lucky enough to get a beta invite, and it is a sign that a more immersive, more alive web has arrived.

There’s no doubt that music is the most social of all media online. Even before the Internet, music has always been as much about who you listen with as what you listen to. P2P sites like Napster hinted that online music had a social side, but it wasn’t until just a few years later, when Myspace  became the center of the online music universe, that the first era of social music had arrived (see the table below for the three “eras” of social music).

In the span of a few short years, it became necessary for almost any music artist — big or small — to have a Myspace page, and users loved to express themselves by uploading MP3s and creating playlists.

Over time Myspace declined, but the social playlist arrived. While Myspace was limited to one social network, sites like Last.fm — and later iLike and Rdio — enabled users to create playlists and share them with their friends through integration with popular social networks like Facebook and Twitter, taking social music outward.

Social playlists proved extremely popular, and they continue to form one of the foundations of success for companies like Spotify. But as Turntable.fm has shown, a new era of social music may be upon us, one that’s less about scaling wide (as is the case with social playlists) but more about going deep.

The third era of social music is about immersion, as sites like Turntable.fm and Outloud.fm make online music seem more like off-line social music sharing (remember that?) by adding more immediacy and intimacy to the experience.

But it’s not just about immersive social curation (which defines Turntable.fm). It’s also about more-immersive social creation. Users of social music creation and collaboration sites like SoundCloud  — which allow immediate feedback from your community down to the details in an individual track — are growing very fast, proving that the act of making music can be just as social as consuming it.

As a new era of social music arrives, it’s a fair question to ask whether these sites are too immersive as compared to more-lightweight, more-passive experiences like Pandora or Spotify. For some, they are, and they may require too much of an investment of time and interest to ever see the same wide popularity of basic social playlist and streaming sites.

But for those looking for deeper interaction around music online, don’t worry. You may become less productive in this new era, but your time has arrived.

For more analysis on the new era of social music, see my weekly update at GigaOM Pro (subscription required).

Image courtesy of Flickr user Denim Dave

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While Microsoft’s “Welcome to the Social” advertisements were often derided, it’s ironic that Microsoft, and not Apple, has a better history with social media interactions. Here are the three areas Apple tried to make a play with social media, and instead fell just “a bit outside.”

Sharing Music

I thought the Zune’s idea of “squirting” music, while poorly named, was a brilliant idea. How often have you been out with someone, talked about music and had the inevitable, “So, have you hear the new song by so-and-so? No? OMG, you gotta hear it” moment? The idea of beaming songs between iDevices is something I’d love for Apple to introduce. if Microsoft can make this happen, why can’t Apple? Sharing playlists via iTunes could be the mix tapes of the 2010s, and not in the way that’s currently allowed via Ping, where you basically just provide a list of things to buy for your friends.

Game Center

Microsoft’s Xbox division has nailed interaction between gamers. When I look at my friends on the Xbox Live Dashboard I can see what games they’ve played, how many achievements they’ve earned, and basically how far through games they’ve progressed. If they’re online, I can use the dashboard to start a game with them.

Game Center is a mess; it doesn’t really behave in the way I’d expect. For starters, it doesn’t seem to auto-detect what Game Center-capable games I have installed; I need to run games at least once to get it to register. If I open my friends list, it will tell me what games I have in common with a friend, but not allow me to compare high scores, achievements and the like. I can open up a game from my Games tab, but all I can compare is leaderboard information. Also, it’s not Apple’s fault, but a lot of games aren’t compatible with Game Center. It would be a lot easier to start a Words With Friends game with people already on my Game Center friends list.

It’s too bad Game Center falls as short as it does. Apple hinted when it first introduced the feature would be the center of the iOS game experience, but that’s not the case. Maybe iOS 5 will bring some improvements, but as it stands right now, it’s pretty much useless.

Ping… Ponged?

At least with Game Center’s early demos, it looked like Apple had its head on straight. When Apple talked up Ping, even the famed Reality Distortion Field failed to Distort.

The first problem with Ping is that it’s way too broad with music categories. Sure I like rock. but I’m more of a heavy metal guy, which isn’t an option. The second, and real, problem with Ping is that it’s one of the few things Apple does that really, transparently, is all about the money.

Even as a money-grab, it’s not very effective. Jim Dalrymple at The Loop has musical tastes similar to mine. When I follow him on Ping, all I see are the people he’s followed and his last purchases. What I’d really like to see, though, are all the songs in the Heavy Metal genre he’s ranked five stars, or metal songs he’s played recently. I’d be much more likely to actually buy those.

Ping also seems a natural choice for Genius integration. Why not use my Ping connections as an additional means of filtering results? In theory at least, it could provide much more interesting and personally relevant results.

Going Social

It’s a little weird that while Apple pays close attention to the overall user experience of their devices and OS, when it comes to any sort of social interaction, the company has been a gigantic failure; just look at how long proper Flickr and Facebook sharing took to come to iPhoto. The best explanation I can come up with is that Steve Jobs just doesn’t get social media, so all the social media aspects of Apple’s business aren’t subject to his scrutiny, leaving unfinished and poorly planned services allowed to ship. Now that Phil Schiller is a Twitter user and Jobs is taking some time off from steering the ship, maybe we’ll start to see Apple getting over its social media ineptitude.