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Sangara Narayanan
Sangara Narayanan
Articles (562) 

Apple Music Still Aiming for 100 Million Subscribers

Growth is strong, and subscriber numbers continue to expand

June 09, 2017 | About:

With smartphone sales around the world slowing down, Apple (NASDAQ:AAPL), the world’s leading premium smartphone maker, needs alternate revenue streams now, more than ever. Apple Services is the one segment that has shown promising growth for the iPhone maker, and Apple Music is well on its way to becoming a stable earner for Apple for many more years to come.

Apple launched Apple Music in June 2015. Nearly two years later, Apple Music is the second-largest subscription streaming service in the world with 27 million subscribers while Spotify, the No. 1 player, has 50 million.

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The entry of Apple didn’t slow Spotify’s growth, as we can clearly see from the graph. The fact that both these products are growing at such a steady clip means that there continues to be significant demand for such products.

An Apple Music subscription costs $9.99 for individuals and $15 for a family membership in the U.S. Pricing in other countries – such as India – is much lower.

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With 27 million paid subscribers around the world – and a significant majority of them in the U.S. – Apple Music is already bringing in billions of dollars in revenue for the company.

Apple's senior vice president of internet software and products, Eddy Cue, told Billboard that "of course we want more and we want it to go faster we’re hungry!" But he added, "We can’t forget that, as an industry, we still have very few music subscribers. There are billions of people listening to music, and we haven’t even hit 100 million subscribers. There's a lot of growth opportunity."

Reaching 100 million subscribers should not be a hard task for a music streaming service considering the sheer number of people who listen to music around the world. This segment has a lot of potential, and Apple will hope to keep doubling Apple Music’s subscription base and revenues every few years.

Though the growth will never be enough to offset all its troubles in the smartphone market, having a growing segment definitely helps. Not to forget that the services segment will always be a steady earner for the company, more like a utility company. Apple Music and Apple Pay have a long way to go, but their current growth will only help Apple’s long-term future.

Disclosure: I have no positions in the stock mentioned above and no intention to initiate a position in the next 72 hours.

About the author:

Sangara Narayanan
Sangara Narayanan holds an MBA from Kent State University, Ohio, and has worked on the floor as a trader in New York. You know where. He is passionate about capital markets and specializes in business analysis, stock valuations and making chicken curry

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