Apple’s 800+ million iTunes Store users’ spending down 24%; Time for iTunes for Android?

“Last quarter, each of Apple’s (AAPL) iTunes accounts spent an average of $3.29, down 24% year over year,” Philip Elmer-DeWitt reports for Fortune.

“At a high level,” Morgan Stanley’s Katy Huberty writes in a note to clients Wednesday, “this raises concerns about Apple’s ability to monetize the new base of emerging market customers.”

“But by the end of the year, App Store sales will have more than taken up the slack, Huberty predicts,” P.E.D. reports. “And she sees several ways Apple could tap into one of the company’s great unheralded resources: 800 million iTunes accounts, most of them attached to credit cards.”

She ticks off three new opportunities:
• Streaming music
• Mobile payments
• iWatch

P.E.D. reports, “To these three new revenue sources, Asymco‘s Horace Dediu adds a fourth… ‘Why not bring iTunes to Android?'”

Read more in the full article here.

MacDailyNews Take: Well, Apple already makes iTunes for the world’s preeminent Mac knockoff, so why not for the iPhone/iPad knockoff, too?

[Thanks to MacDailyNews Readers “Sarah” and “Dan K.” for the heads up.]

34 Comments

  1. There is a fundamental difference between Windows and Android.

    There are many people who use Windows because that is on their desktop in their office. They have a Mac at home, but they like to have iTunes on their office desktop and (if their IT doofuses allow the installation) they occasionally use it to purchase music.

    Android users are NOT Mac users (very, very few are, and after iPhone 6, even fewer will be). As we all know, Android users are for the most part cheap. There is no point of having iTunes on Android if all these people will “buy” is free song of the week.

    1. Except Android users are not cheap, they pay just as much for their flagship phones as an IPhone, but do so because they want the best phones with a better and more useful operating system. Android phones are now so far ahead of the iPhone I am doubting the iPhone 6 will even get close to the existing models, let alone match those now being released and those coming out in the next few months.

      1. Yeah. They’re 32 bits short with a cheap plastic case, on a phone so big it looks absurd next to one’s head, with a hopelessly fragmented system that gets worse by the year. The imitators in the Android world will never catch up. Buy hey, the choice is yours.

        1. 64 Bit means nothing at the moment, just a spec. advantage probably the only one the iPhone has. Really nothing to shout about at this time.

          Plastic who cares, most metal iPhones end up in cases anyway as they are so fragile. Durability is far more important in real use, something the iphone badly lacks.

          Fragmentation, yes but that comes with offering greater choice. In real terms it does not affect users in day to day use.

          Imitation …. right now Android phones are setting the pace in both hardware and software and Apple are following and have been for a while now.

          To big …. utter rubbish, the bigger smartphones makes for a vastly improved smartphone experience in so many ways. If you just want a phone, why pay way over the top for an iPhone? The significant change for the iPhone 6 is (hopefully) going to be a bigger phone (Ironic yes!), will it still look silly then? No, its using a tiny phone to view video, browsing etc. that is absurd.

          So I come back to the point, people buying flagship phones (Android and otherwise) do not worry about cost, they want the best phones and at the moment the iPhone is a long way from being the best phone. I use a Mac as does a lot of other Android users, but they too buy Android for this sole reason.

          1. Have not got an S5 nor do not want a fingerprint reader either, not a key feature for me. I want important improvements like battery life, durability, better screen …….

      2. Nobody here actually answered to the initial inaccuracy of this post, so I will.

        Android users ARE cheap. Numerous surveys confirm this. Vast majority of Android market share is built on models that are considerably cheaper than the cheapest currently selling iPhone (4S, which is now three years old model!). In the market space of Androids where price is similar to the iPhone, Apple’s market share dwarfs Android’s (which includes not just Samsung, but HTC, LG, Motorola and all other no-name brands).

        So, yes, while there are very few people who choose a flagship Android over an iPhone, and vast majority of those falls into two groups: those who need (or really want) a large-screen phone (and iPhone is just too small for them), or those who hate Apple. The first half will likely disappear soon, if rumours about the screen size of iPhone 6 prove correct.

        1. Just because there is a lot more choice in the Android market does not make their users cheap. it means customers buy the phone they want. Surveys do not confirm Android users are cheap, they confirm people buy phones of different types and costs. I have many wealthy friends who own so called cheaper phones because they are just not interested in the more expensive ones.

          Surveys also show that many millions of people buy none Apple flagship phones not very few, that’s a blind and stupid comment. People buy them for many reasons other than those you state better operating system, better features on hardware, more robustness, significantly better battery life, more customization, more sharing options, dislike of Apples closed system (different from hating Apple), removable batteries, SD card storage, dislike of iTunes, small selection of compatable music and video formats …… I could go on.

          The iPhone 6 will not remedy most, if any of the above it’s just following a trend it should have set, but failed to do so some years ago now.

          1. Yes, many millions buy non-Apple flagship phones, but when you put the numbers in perspective, they are significantly lower than iPhone numbers. Any one single iPhone model outsells ALL other non-iPhone phones combined (including Android, Windows, Blackberry and other platforms). That says that when people want to spend $450 or more on a mobile phone, they prefer to buy from Apple. While all the reasons listed are legitimate to some people, vast majority don’t care about removable battery, customisable options, concept of open systems, etc. As for better hardware and battery life, that is a well known (and long debunked) canard. The only way Android phone outlasts an iPhone is when all services are turned off and all apps are terminated. Feature-for-feature and function-for-function, iPhone battery will outlast almost every android out there (for reasons that are very easy to understand).

            1. You use a moving goal in your comments “very few people who choose a flagship Android over an iPhone” now equates to many millions. You used Android not a particular model to compare with.

              As for battery life you live in a different world. I have both iPhone and Android, have for a few years now. My Note 3 with lots of widgets running, major customisation and internet use lasts twice as long as an Iphone which is pretty basic. In a straight comparison, a larger screened, more powerful Android phone, in an Iphone type setup, would outlast it significantly longer. Times have changed its not like a few years ago!

              No one I know turns off all the services on Android to conserve battery life, although I know those who used to on the iphone including myself. One of the reasons they prefer Android is it does thing the iPhone cannot, these do use battery life but their phones easily outlast the iPhone. So what your reasons are that are so easy to understand, I do not know, maybe you can enlighten me.

  2. It probably doesn’t help that so much music is crap. In terms of classic stuff if I’ve not bought it now I’m not likely to buy it in the future. I occasionally buy the odd individual song, but to be honest there’s so much other media out there and I own so much music already that I just don’t have the time. All my music is rated and I have iTunes only load music I like and haven’t listened to in the last year and I still have 2000+ songs at any given time. Whether I buy or subscribe I don’t have the time. Especially as I’m currently listening to every episode of Comedy Bang Bang and the myriad of other quality podcasts I subscribe to. With so much choice and so many avenues to get free and legal content there’s just less and less reason to pay for stuff.

      1. Only because millions of Windows users can attach and sync iOS devices to them. Apple gets revenue from iOS device sales, iTunes/app store sales is just an added benefit.

        iTunes on Android though, Apple can’t benefit at all. The peanuts they’d get from any iTunes music/movie sales (doubt there’d be any apps) would be greatly outweighed by the development and ongoing support costs.

  3. 1. iTunes ecosystem and content is Apple’s differentiator for iOS devices.
    2. Android users are poor paymasters.
    3. Stupid analyst wanting to raise iTunes revenue/ ARPU for god knows what purpose. Apple does not need this kind of money. It can earn money in other ways that it agrees with.

    1. Just what I thought, too. The percentage drop in the average spent by an iTunes user would have a tremendous knock-on effect from the typically frugal chinese customer (who have adopted iPhones and iPads in volumes).

  4. no! absolutely no! that’s like visiting the thief who stole your best china and washing his dishes. or like the pervert who broke into your house in the middle of the night, stole your entire drawer of panties and then you offer him your vs bras. either way, it’s like rewarding bad behavior. or something like that.

  5. Apple has a bit of a dilemma here. Music industry really doesn’t like the streaming as digital downloads are far more profitable but like the cdrom before it streamed music is rapidly becoming more popular. For example Google Play allows up to 5 devices to simultaneously stream as much music as you want. Granted the content could be better but its still pretty good. Spotify also is a threat. That is why Apple is going after Beats as its the cheapest to aquire (though I wouldn’t call 3+billion cheap) than either Spotify or Pandora. Apple needs to get into this game right now. The itunes radio isn’t enough. Also Apple will need to further integrate streaming music as part of the Iphone/Ipad experience for it to truly be a game changer right now its just another app so it doesn’t appear as anything special to users that Google Play/Spotify. Apple users want to be wowed here and more important need to see that a “Streaming Itunes” is something great (see Siri as an example) not like mobile.me (which sucked).

  6. Disc jockeys are instrumental to increasing music sales. They are extremely effective for generating interest in every aspect to the music culture.

    Without these musical oracles creating atmosphere and personalizing the music with historical context and back story, how would we value music?

    iTunes Radio needs DJ’s and who better than professional musicians playing the music that inspires them. Apple should hire musicians in every genre to create remixes of their favorite music.

    I would love to hear music played by my favorite musicians, talking between songs or over them or whatever. The point is, I would love to hear what my favorite musicians listen to and why.

    iTunes Radio should hire current and former musicians to record one hour segments of their personal favorites. Perhaps music that inspired them when they were growing up. Music they listen to when they are engaged in a particular activity. Our favorites have favorites too.

    These DJ podcasts would inspire us all to revisit all manner of music with new purpose and meaning. This, I believe, would increase music sales.

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