In the past two years, Apple’s three major hardware (computers, tablets, mobile phones) all fell into the downturn and downturn, at the same time, Apple’s Internet business has made good growth, allowing investors to see some hope.
Apple’s most successful Internet business is streaming media services “Apple Music.” According to the latest news from foreign media, an analyst said the market value of Apple Music has reached 10 billion U.S. dollars.
After Cook served as CEO of Apple, Apple reduced the number of product sales figures released, such as Apple Watch has never been announced until today, sales, but it is rare that Apple will often announce changes in membership of Apple Music, which also shows that Apple Music Senior executives are satisfied with the development.
In early February, Apple released fourth quarter earnings, Apple Music, part of the service business, but the specific financial data is unknown.
According to a U.S. media quoting technology market research firm Bear Stearns, Apple’s service business increased by 24% in total last year, while Apple Music’s revenue growth was 91%, reaching 2 billion U.S. dollars.
However, Apple Music is still a startup, accounting for only 4.1% of Apple’s service revenue, but Apple Music has earned 36 million paid members after two years of development.
Toni Sacconaghi, an analyst at Bear Stearns Research, said Apple’s current revenues have been declining due to the declining revenue from its iTunes music download business, which analysts predict has halved since 2014.
Fortunately, however, Apple introduced Apple Music Services, to make up for the decline of the music download business.
In the music streaming market, Apple, a late-arriving company that transformed the Beats music business it acquired, reintroduced its name after a change of name, at a monthly subscription of $ 10. However, the difference is that with the adversary, Apple Music only membership service, there is no free service, which has also become a competitive disadvantage.
Analyst Sarkar predicts Apple Music’s revenue will grow 70% in FY 2018 (as of the end of the third quarter of this year) and 50% in FY 2019, which will make Apple’s music business a pillar of Apple’s service business.
According to Spotify, the global music service leader, the market is valued at about $ 10 billion and accounts for about 1% of Apple’s market capitalization.
Apple Music, according to the analysis, also has a negative impact on Apple, which has a profit margin of around 18% to 20%, below the profit margin of the electronics business, which will drag down the profitability of the entire company. Lower profit margins have also affected the valuation of Apple’s music business.
There are voices that start from the iPod player and iTunes music store, Apple has brought a revolution in the global digital music market. In order to continue to exist in the music market, Apple must enter the music streaming service.
In the era of smart phones, enjoy unlimited music through the Internet has become commonplace, the purchase of single spending patterns have been eliminated. From China to the United States, there have been a lot of music streaming services.
Globally, more and more music download stores have been out of the market. Up to now, Apple still operates the iTunes Store. It is not clear how many songs were sold last year and how much it slipped.