Apple’s forthcoming streaming music service will be cheaper, more deeply integrated into Apple’s operating system, and smarter than all of its competitors, according to a report in 9to5 Mac. The site listed a number of key details Wednesday on a service that people have been waiting for ever since the device maker acquired Beats Music along with headphone maker Beats Electronics for $3.2 billion in May, and it sketches the outline of a product that wion't fight fair in its battle for subscribers.
“Apple is going to use all the assets at its disposal to make asymmetric warfare in the streaming market,” said Mark Mulligan, co-founder and analyst at Midia Research.
According to the report, the as-yet-unnamed service boasts a number of features that will differentiate it from streaming competitors like Spotify and Rdio, and price is chief among them. Though premium services like Tidal cost as much as $19.99 per month, most streaming music services on the market charge $9.99 per month for unlimited access to their catalogs. Today’s report says Apple’s service will cost just $7.99 per month, which, while higher than a $5 price point that was reportedly under discussion, will have a massive effect on competitors, already making do with razor-thin profit margins.
“If Apple does go to market at $7.99, it will bring the price points down elsewhere at some point or another,” Mulligan said, noting that Apple’s agreement with its record label partners may involve a higher price per subscriber than the $7.99 price reported. “Apple could quite happily stomach losing a dollar a month per subscriber to gain a dominant position,” Mulligan said. Such a strategy would essentially mark a continuation of the one employed with the iTunes Store, which the device maker has long used as a loss leader designed to drive purchases of its products.
“Apple is in the business of music to sell hardware,” Mulligan said. “Spotify is in the business of music to sell music.”
Yet the service reportedly will not be exclusive to Apple customers. An Android version of the service reportedly is in the works, the first time the device maker has developed an Android application in-house. Back in 2013, Apple CEO Tim Cook said there was “no religious issue” with building an application aimed at Android.
The service also is likely to contain a robust array of insights and tools for the artists and labels whose music Apple will need to round out its catalog. In March, Beats bought Topspin, an insights dashboard that gave artists insights into who and where their music was most popular, and in January, news surfaced that Apple had purchased the music analytics platform Semetric.
Apple revealed it turned an $18 billion profit in its most recent quarterly earnings report. Its as-yet-unnamed music offering is likely to launch in June.