Just 3% Of Apple Users Subscribe To Apple Music: Room For Growth or Failed Service?
A new analysis by Amit Daryanani of RBC Capital Markets looks at the revenue that Apple Music and iTunes returns to Apple. But tucked within the findings is a stat that must make Apple wondered about the wisdom of putting their music plans in the hands of Jimmy Iovine and his $3 billion Beats/Apple Music team.
Just 3% of Apple users (those that have installed an Apple iOS) have subscribed to Apple Music, according to a new study by analyst Amit Daryanani of RBC Capital Markets. Some would conclude that Apple Music was not resonating with Apple's customers; but Daryanani calls streaming a "very unpenetrated" sector in relation to the installed user base, and a "very attractive opportunity" for growth.
Even at its current levels Apple Music is contributing 12% of the revenue pouring into Apple's Services division (the App Stores, iTunes and Apple Music, AppleCare and Apple Upgrade Program, Licensing, and the Genius Bar). iTunes is still contributing 22%
But Apple Music contribution to the bottom line looks less rosy when considering the low gross margins that it delivers.