Apple To 'Aggressively' Combat Spotify's 75 Million Users With Apple Music Trial
Spotify has also raised more than $500 million from a number of investors, which have reportedly valued the company at $8.53 billion – more than twice the price Apple paid for Beats Audio.
'We're At The Beginning'
Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, told Benzinga how he expects Apple to combat Spotify's dominance.
"We're at the beginning of this market," Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, told Benzinga. "I think the 20 million number is really, really impressive…[but] it's too early to count Apple out given their presence at retail, their presence on devices and their tenacity. I really think it's way too early. I think that Apple has set up their service to really be for the next wave of people who want to enter the market, as opposed to moving people from Spotify – or, for that matter, Pandora."
Moorhead said that Apple's free trial period should not be ignored.
"I would expect Apple to use that aggressively and maybe even extend it for people to try or experience," he said.
Global Equities Research analyst Trip Chowdhry told Benzinga that music is fundamentally a "very specialized experience."
"If somebody or some company thinks they can take over the whole world, probably they are drinking their own Kool-Aid," he said.
Chowdhry expects there to be several regional winners, such as Gaana in India.
"I think if somebody is thinking there will be one music service that will be all things to all people, that optimism is pretty much out of sync," he said. "The way to think of it is, on your device, you will have multiple applications of music. And the user may pick one of those based on their needs or where they are or what occasion they are and what mood they are in."
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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