Analyst: Apple Music will average 40% annual growth over the next three years

Apple, “the world’s largest company by market value now has more than 40 million paid subscribers to its eponymous streaming service, according to an internal email last week that also announced the appointment of a new head of that business,” Dan Gallagher reports for The Wall Street Journal. “That is a gain of 11% from a number the company shared just two months earlier. It is closing the gap with Spotify ’s global base of at least 73 million paid subscribers as of the end of March.”

“Ben Schachter of Macquarie Capital estimates that Apple Music will average 40% annual growth over the next three years, making it the fastest-growing part of the company’s services segment,” Gallagher reports. “Apple is expected to report total service revenue of $8.3 billion for the fiscal second quarter being reported on May 1 — up 18% on year.”

“Mr. Schachter estimates that Apple Music commands a gross margin of around 15%,” Gallagher reports.

Read more in the full article here.

MacDailyNews Take: Apple Music doesn’t exist to generate big margins on its own. It’s part of the ecosystem that helps to sell Apple hardware with margins about which the rest of the smartphone, personal computing, and CE industries can only dream.

Let’s wait to see where Spotify is in 36 months, shall we?MacDailyNews, April 18, 2018

Apple needs to reconsider its HomePod strategy – April 18, 2018
Apple Music hits 40 million paid subscribers milestone – April 4, 2018
Apple Music hits 38 million paid subscribers – March 12, 2018
Apple Music expands student membership pricing to 82 new countries – February 13, 2018
Apple Music poised to knock off Spotify – February 12, 2018
Apple Music was always going to win – February 6, 2018
Apple Music on track to overtake Spotify, become No. 1 streaming service in U.S. this summer – February 4, 2018
Apple Music and Spotify now account for the majority of music consumption in the UK – January 3, 2018
Spotify files for its IPO – January 3, 2018
Spotify hit with $1.6 billion lawsuit from music publisher – January 2, 2018
Apple Music passes Pandora and Spotify in mobile usage – March 29, 2017
Spotify hits 50 million paid subscribers – March 3, 2017
Apple Music surpasses 20 million paid members 17 months after launch – December 6, 2016
Oh ok, Spotify listeners are upgrading to Apple Music – July 19, 2015
Spotify CEO claims to be ‘ok’ with Apple Music – June 9, 2015


  1. Then spend so money on improvements.
    How about a folder system for organizing playlist. How about stations based on a playlist; every time I like a song on a station, it’s added to the playlist the station is based on. Ability to see/edit and manually add to the songs that are “liked” on a station.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.