Apple (AAPL - Free Report) is benefiting from its Services segment with Apple Music in top gear. Recently, the company announced that the music streaming service has hit 48 million subscribers.
Apple’s focus on strengthening the segment is evident from the promotion of Oliver Schusser as vice president of Apple Music and international content.
Schusser, employed with Apple for the past 14 years, has worked with studios, music labels and publishers and headed the launch of iTunes store, App Store as well as iBooks for international markets.
We believe that this key appointment will provide additional impetus to Apple Music and increase its market traction, globally.
Apple Music: A Challenge for Spotify
Spotify has been leading the music streaming market for a long time. Per a report by Statista in June 2017, Spotify (SPOT - Free Report) enjoyed 36% of music streaming market share, while Apple had 17% and Amazon (AMZN - Free Report) Prime Music had 10%.
Currently, Spotify has 70 million paid subscribers. However, the gap seems to be narrowing with Apple Music recording phenomenal growth, recently. Apple Music added 13 million paid subscribers since June 2017, taking the count to 40 million.
Earlier in February, The Wall Street Journal reported that Apple Music's growth rate in the United States is more than double of Spotify. If the rate sustains, Apple will trump Spotify by this summer.
Notably, Apple Music is available in 114 counties, while Spotify is available in just 60. There are only five countries where the Swedish service is available but Apple is not. Considering Apple’s massive cash resources, it isn’t difficult for the company to expand rapidly in newer markets.
Moreover, another player in the music streaming market Pandora (P - Free Report) , which is a late entrant in the on-demand music services arena, is bearing the brunt as well.
Further, given Apple’s proactive stance to diversify revenues, the company is well positioned to benefit from the streaming industry that is likely to expand.
Apple carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
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