This is a daily email about Apple. I am a former Wall Street analyst now focused on building Above Avalon, an Apple analysis site. For an archive of prior research, click here. For more information on becoming a member and receiving additional Apple analysis, please visit the membership page.
Happy Wednesday.

Apple has officially entered the music streaming era.

Take a look at Twitter to notice how much attention Apple Music received yesterday. I didn't see much of anything in my Facebook timeline though, which likely says more about Facebook than Apple Music.

Everyone likes the product. I am not surprised. The service combines elements from the old Beats app and then adds a brand new angle based on radio. At least for one day, Apple Music moved music culture. The difficult part is being able to do the same today, next week, and next month.  

Apple Music is designed for the music lover and it shows. It is very easy to get lost within what feels like an unlimited number of playlists, recommendations, and radio channels. What about the average consumer? Those who never tried Spotify? Those who never paid for music and stopped using iTunes years ago? Apple Music probably comes off as very overwhelming.

As we discussed yesterday, Apple Music (the product) is right on track. Trent Reznor nailed it. However, when it comes to price, I'm more doubtful. Music has been devalued for years. A nice music streaming app will not change hearts and minds overnight.

This will take time to play out. I would say a minimum of 5-6 months. Until then, Apple will keep a close eye on how adoption is trending and what changes will need to be made.

My full notes and observations on Apple Music were sent to Above Avalon members this morning. 

 


Interesting Links
 
Trent Reznor spoke with Rolling Stone about Apple Music. It was a pretty helpful interview for beginning to understanding some of the thinking behind the service. - Rolling Stone

Apple lost its federal appeal of the e-book antitrust verdict which found Apple liable for conspiring with publishers to raise e-book pricing. Here's Apple: "While we want to put this behind us, the case is about principles and values. We know we did nothing wrong back in 2010 and are assessing next steps." Those next steps could include asking the U.S. Supreme Court to review the case. - 
WSJ

Xiaomi is entering Brazil with the Redmi 2, a $160 smartphone. As a comparsion, the iPhone 6 starts at $1,130 in Brazil. It will be interesting to see if Xiaomi is able to replicate its success from Asia in other markets. Brazil has not been an easy market for Apple given very high import taxes and other local market variables unique to Brazil. - WSJ

Kantar released its latest smartphone sales share data for the month of May. After going through the data, iPhone sales trends seem to be remaining quite healthy. Strength in Europe and China continue to offset slightly weaker trends in the U.S., but overall I think Apple management would be pleased with the trends. - Kantar

 


Above Avalon Premium

Above Avalon is supported by its members who receive an exclusive premium email. Today's stories include:

Apple Music Observations (complete notes and perspective on Apple's entry into the music streaming era)  

Android Switcher Rates Bode Well for iPhone Sales

 
To read today's premium email and receive future daily updates about Apple (10-12 stories per week), sign-up at the membership page. Above Avalon is 100 percent supported by its members. Thank you for your support.
 


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