EXCLUSIVE: Apple is exploring the concept of entering the premium wireless audio market with the real possibility that the US Company could use the Beats brand to launch a series of wireless speakers insiders have said.
What we have been told by sources in Asia is that Apple has developed prototype Wireless speakers that easily connect with Apple products, now the Company is exploring the concept of using the Beats brand to launch the speakers globally.
Key is believed to be new software that allows the speakers to be easily managed while giving users access to both video and music content from the iTunes store.
Sources claim that Apple has seen the success that Sonos and Beats have achieved and that internal research reveals that Apple customers are prepared to pay a premium for both headphones and wireless speakers.
Apple is reportedly close to finalizing a $3.2 billion deal to acquire Beats for its line of high-end headphones and it’s recently launched streaming music service, with insiders claiming that the Beats brand could be used to launch a range of wireless speakers because “they are a brand that is associated with sound”.
Piper Jaffray analyst Gene Munster says the real key that Apple may be buying Beats is Lovine, who is the co-founder of Beats and reportedly owns 25% of the privately held company.
Munster said overnight that Apple’s “motivation” to acquire Beats appears to be bringing in Iovine to the company to lead Apple’s content strategy.
Market Watch in the USA said that ‘Apple, of course, is well known for re-inventing the music industry with the iPod and iTunes Music store. And while iPod sales are declining, and there is talk about iTunes music sales stagnating, it’s clear that music remains one of the key business areas for Apple. Part of that might be sentimental, as it can be argued that it was the runaway success of the iPod that saved Apple and started it on the path toward its current market capitalization of more than $500 billion’.
New information reveals that Beats Music attracted 110,992 subscribers in March, according to a leaked royalty report obtained by The Guardian.
The service launched in the US in January, but by March had managed only 49,371 individual accounts and 61,621 family accounts. Since family accounts cover up to five people that may imply many more listeners, but US carrier AT&T has also been offering 90-day free trials of the service, which could potentially make the number of paying subscribers extremely low.
Spotify, for comparison, had 1 million paying US subscribers in March. Globally the service currently has over 24 million active listeners, of which more than 6 million are paying. Spotify has been around for several years though, giving it a distinct advantage. It’s thought that Beats may be doing better now that its iOS app includes in-app subscription purchases; the change has pushed Beats higher on App Store charts.
Nevertheless the numbers support the view that Apple’s reported acquisition of Beats for $3.2 billion is more about technology and platforms than subscriber bases. It’s speculated that Apple may be hoping to revamp iTunes Radio with new features and paid subscription options.
Another fact exposed by the leak is that Beats Music is currently paying artists just $0.00126 per play, less even than Spotify, which pays rights holders between $0.006 and $0.0084, still often considered too little. Beats has however been seeing high use among subscribers: the 49,371 individual customers played 116.4 million tracks in March alone, or about 76 per day per person.