Apple Music has 50 million subscribers? Hang on, didn’t it have 56 million in November 2018? Well yes, but that was a figure that included trials. Now Apple’s music-streaming service has 50 million people actually paying for a subscription. “I’m very proud to say that nearly 16 years after launching the iTunes Store, we generated our highest quarterly music revenue ever thanks to the great popularity of Apple Music now with over 50 million paid subscribers,” CEO Tim Cook told analysts last night, in Apple’s latest quarterly earnings call.
This was part of the bigger story of Apple’s growing revenue from ‘services’ – a business category that includes its App Store, Apple Pay and cloud services as well as Apple Music. “Services revenue set an all-time record at $10.9 billion in the December quarter growing 19%,” said Cook. He and Apple didn’t have much more to say about Apple Music during the earnings call, but the milestone is a significant one – three and a half years after the service launched in June 2015.
There were some interesting numbers around the hardware business that is supporting this growth. “The installed base continues to grow very nicely. It has reached 1.4 billion active devices at the end of December,” said Cook. “Within this installed base the percentage of users who are paying for at least one service is growing very strongly… our subscriptions are becoming a very large portion of our business and they’re growing very well above services average.”
Apple’s CFO Luca Maestri also revealed that Apple’s global active install base of iPhones is now 900m, having added almost 75m in the last year. Which, if you’re talking conversion rates, means only 5.6% of iPhone owners are paying for Apple Music. The important question is how many of the other 94.4% are ripe for choosing Apple Music as their first music-streaming service, or switching from a rival.
As for the bigger picture: Apple’s quarterly revenues were down 5% year-on-year to $84.3bn, with a 15% decline in revenue from iPhone sales (as trailed in Apple’s recent forecasts-restatement) a key factor. “While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide,” said Cook.