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Apple (AAPL), Spotify Battle for Music Streaming Market

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With the battle for music streaming raging on, Spotify, a popular service provider has alleged Apple Inc. (AAPL - Free Report) of ‘Sherlocking’ its service. Spotify has alleged that Apple has blocked an update to the former’s iOS app in order to give an edge to its own service Apple Music.

Almost a decade ago, Apple had a search tool named Sherlock that would allow the company to incorporate tools similar to third-party providers in its own service to trump the latter.

It appears that Apple has denied the app update approval for Spotify after it started encouraging subscribers to sign through the website instead of app, thereby managing to bypass the 30% share that would have gone to Apple.

With the digital music streaming industry expected to grow exponentially over the next few years, all the players including Apple, Spotify, Pandora and Amazon (AMZN - Free Report) are striving to strengthen their presence in the industry. As per a Statistica report, revenues from the digital music streaming is projected to grow approximately 9.47% between the period 2016-2020, leading to a market volume of $2,773.2 million by 2020.

Of late, Spotify has been gaining traction. The company last week declared that it has crossed 100 million monthly active users, of which more than 30 million paid subscribers. This is in contrast to Apple’s 13 million paid subscribers (as of Apr 2016).

Though Apple’s offering is relatively new, the iPhone-maker, it appears, would leave no stone unturned in order to get a fair share. The company is also reportedly in talks to acquire Tidal, a streaming-music company owned by rap mogul Jay Z. Though Tidal is a relatively smaller player in the market, its merger with Apple would likely result in quite a strong streaming service. This is because of Tidal’s strong ties with the likes of Kanye West and Madonna and Apple’s technological strength and massive user base.

Whether Apple acquires Tidal or not, competition in the music streaming industry is going to be rife as all the players are leveraging on their strengths to get an edge.

Currently, Apple carries a Zacks Rank #3 (Hold). A better-ranked stock in the broader tech space is Internap Corporation , carrying a Zacks Rank #2 (Buy).

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