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Beats will likely be rebranded under iTunes, be pre-loaded with the next software update
Since Apple completed its $3 billion acquisition of Beats in August, there has been a looming question: what exactly was Apple going to do with it? There were some reports that Beats would be shut down, but that never seemed plausible to me. Why spend so much to not do anything with it? That seemed like a ridiculous rumor.
The more likely scenario is that the service would be rolled out to customers and that Apple would take advantage of its place as the one of t he largest worldwide smartphone manufacturers.
And, hey, that's exactly what they plan to do, according to a report out from the Financial Times on Wednesday.
The company is planning to bundle the service into iOS at some point next year. That would make it automatically available to hundreds of millions of users. It would be included in a software update, and it could come as early as March of 2015.
In the third quarter of this year, Apple shipped out 39.3 million smartphones, second only behind Samsung's 78.1 million. That gave Apple a 12% market share. In all, there 407 million iOS users out there right now. By putting Beats directly onto that many phones, it gives the service an automatic leg up on the competition.
Spotify, for example, recently revealed that it has 50 million members, only 12.5 million of who are paying. If only a quarter of iOS users decide to pay for Apple's subscription service, it will already double Spotify's entire subscription base.
Users will likely never actually as an app called, "Beats" though, as Apple is expected to rebrand the service under the iTunes label.
Taking a big stake in the subscription music space is important for Apple, as streaming has begun to overtake digital music sales.
Last year alone, streaming rose 32%, while digital track sales suffered their first year to year decline. And it was recently reported that iTunes sales are down a total of 13% this year so far. There have also been reports that musicians in Europe are now making somewhere around 13% more in royalties from Spotify than they are from iTunes. The music space is changing, and Apple is trying to keep up.
Apple's subscription music service will actually be its second foray into streaming; last year the company launched the Pandora-like iTunes Radio, or "iRadio."
So will pre-loading Beats, ir whatever it winds up being called, equal success? It's not a given. As the Financial Times points out, iTunes Radio also came installed on iOS 7, but has never really caught on with the public. That being said, the acquisition of Beats is also a pretty highly publicized deal, so perhaps people will pay more attention this time around.
VatorNews has reached out to Apple for confirmation of this report. We will update this story if we learn more.
(Image source: wallippo.com)
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