“This isn’t a fanboy assessment of AAPL or its positioning in the music space,” Dallas Salazar writes for Seeking Alpha. “I’ll acknowledge that Spotify, the Unicorn that is close to becoming a Decacorn, does stand to be a hurdle on the way to AAPL yet again revolutionizing a platform and yet again being the single most dominant force in a space.”

“Just one day post-WWDC15, Spotify closed a Series G round worth $526 million that values the company at $8.53 billion – up from a prior valuation of $8 billion. That’s 2X current Pandora’s valuation and ~3X what AAPL paid for Beats By Dre,” Salazar writes. “So, to think that Spotify is going to fold up and go away is to not realize the reality of the situation. Spotify is smart, it’s agile, it has 60 million users (15 million or 25% of which have been converted to paying subscribers), and it did $1.3 billion in full year 2014 revenues (91% subscription revenue based). Spotify is real and it matters. BUT, Spotify did report a net loss of $197 million and that my friends is its chink in its armor.”

“AAPL will gut and publicly execute Spotify using two methods – creating a race to zero (read: pricing pressure) and having a better content distribution platform for music,” Salazar writes. “How long will Spotify investors continue to throw money into a fire of greater and greater size when AAPL undoubtedly decides to put as much pressure on Spotify’s model via lower pricing, longer free trial periods – which already stand at 3 full months, etc.? How long? How long will it be before AAPL can example to the music industry the greater levels of efficacy of using its platform and its unique ability to allow for free video and/or music to be distributed without cost to the artist/label/consumer via its Connect platform? How long?”

Read more in the full article here.

MacDailyNews Take:

Oh ok. – Spotify CEO Daniel Ek upon learning of Apple Music, June 8, 2015

We are not at all worried. We think we’ve got the one mobile platform you’ll use for the rest of your life. [Apple] are not going to catch up. – Microsoft Mobile Communications Group Product Manager Scott Rockfeld commenting on the iPhone, April 01, 2008

SEE ALSO:

Spotify CEO claims to be ‘ok’ with Apple Music – June 9, 2015
Jimmy Iovine and Eddy Cue: Apple Music gunning for Spotify, YouTube, and terrestrial radio – June 9, 2015
Something about Apple Music betraying Apple’s brilliance by ignoring ‘The Harry Potter Theory of Marketing’ or some such nonsense – June 9, 2015
Bob Lefsetz on Apple Music: What team is Jimmy Iovine on? – June 9, 2015
Apple Music’s huge advantage over Spotify – June 9, 2015
Apple Music is a major mess and it won’t beat Spotify or something – June 9, 2015
When Apple Music arrives, what happens to iTunes Match? – June 9, 2015
What Apple Music says about how Apple views musicians – June 8, 2015
Apple’s revolutionary Apple Music just might prove its skeptics wrong – June 8, 2015
Apple unveils revolutionary Apple Music service – June 8, 2015