![]() TTM = Trailing 12 month.Īpple has plenty of cash to continue paying a quarterly dividend and investing in new products. Here is a comparison of key financial metrics between the two stocks:ĭata source: YCharts. Which is the better buy?īoth companies have cash-rich balance sheets, which is invaluable when the economy goes south. The company recently reported that usage patterns have shifted during the outbreak, with people listening to different things besides music on its platform. Overall, Spotify is in a better position to weather the storm, given that it has a substantial revenue stream that comes from monthly subscriptions as opposed to expensive hardware like Apple. and Italy down even more. The analyst also found that downloads of music apps, in general, have slowed since the outbreak, as more people engage with productivity and entertainment apps instead.īut those numbers may not tell the whole story at Spotify. An analyst with Raymond James found that Spotify's top 200 streams worldwide are down 12% during the outbreak, with the U.S. On the other side, Spotify may not have a great quarter either. The analyst also expects that average selling prices for hardware products will plummet this year much like it did in the 2008 recession. Apple's Foxconn factories in China that assemble iPhones are operating again, but retail stores outside of China remain closed. Apple has already guided that its March-ending quarter sales will come in lower than its previously announced guidance.Īn analyst with Goldman Sachs has painted a dire picture for the company in the short term, predicting that lower consumer demand for pricey iPhones will cut sales by 36% in the fiscal second quarter (which ended in March). The iPhone maker's dependence on hardware sales will make 2020 a rough year, given the economic shutdown and spike in unemployment from the COVID-19 outbreak. While revenue from its services business (e.g., Apple Music, News+, Apple TV+, Apple Arcade, Apple Pay, and the App Store) grew 17% year-over-year, the segment only made up 14% of Apple's total revenue last quarter. While many people will keep their subscription to Spotify during a recession, Apple is at a disadvantage in the short term because it mostly relies on selling more iPhones, iPads, and Macs every quarter to grow revenue. It also provides Spotify a way to invest in original content that users can't get anywhere else. It should keep more members locked-in to Spotify's platform, creating a stronger competitive moat. This is beneficial for Spotify's business for a few reasons. ![]() Apple music vs spotify subscribers 2020 free#Management so far has found podcast content increasing engagement and member retention on Spotify's platform. Most importantly, podcasts are helping to convert free users to try a paid subscription. Total podcast advertising revenue was estimated at $479 million in 2018 and is expected to reach more than $1 billion by 2021, according to a report from the Interactive Advertising Bureau and PwC. The company has scooped up a handful of podcast producers recently, including Gimlet Media, Parcast, and The Ringer, which is a leading creator of sports, entertainment, and pop culture content. Spotify has been expanding into podcasts to extend its long-term growth runway. ![]() The total user base increased by 31% year-over-year in the fourth quarter. ![]() It has 271 million total monthly active users, including both paying members and users who engage with the free ad-supported side of the service. Spotify reported revenue growth of 24% year-over-year in the fourth quarter of 2019. That is much faster than Apple's total revenue growth of 8.9%. Spotify is on a mission to be the largest audio provider in the world, and it seems to be well on its way to achieving that goal. ![]()
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