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.
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