Apple is slowly realizing that its walled garden is no longer working in its interest. After last month’s agreement between Apple and Amazon to sell iPhones, Apple Watches and iPods on Amazon.com, the two companies have now decided to integrate Apple Music into Amazon Echo, the voice-controlled smart speaker.
This is the first time Apple Music is moving out of the Siri voice ecosystem. You can now choose and play your Apple Music tracks using Alexa, Amazon’s virtual digital assistant.
The two moves by these giants of tech are a sign that Apple is looking at ways to increase its revenue base. With iPhone demand having reached peak demand, the outlook is not very bright for iPhone sales during the crucial holiday quarter.
Apple Services is one segment to watch in terms of revenue contribution, and that includes Apple Music. The company didn’t see much success with the HomePods that compete directly with the Amazon Echo line-up and the Google Home, and sales estimates for 2018 show that the iPhone maker is far behind its rivals in the smart speaker space. Apple expects to sell a mere 3.5 million HomePod units, while the Echo line will sell an estimated 28.5 million units and the Google Home will sell 16.2 million devices.
Apple needs to move out of its iPhone-heavy revenue model, and Apple Music is one of the best ways to go about it. The increase in user base that is likely to come from its partnership with Amazon will go a long way in bolstering its top line.
Source: Business Times