After months of waiting, users in mainland China can now finally access AppleAAPL Music, iTunes Movies and iBooks.
When Apple Music was rolled out earlier this year, against all expectations, the service excluded mainland China, though it was made available in Hong Kong and Taiwan.
Apple finally announced yesterday that Apple Music will be available to Chinese users from today for the usual three-month trial membership, following which a subscription fee of approximately $1.57 (10 RMB) will be charged for each month per individual.
Apple has kept the pricing strategically low compared to other markets like the U.S. ($9.99), Indonesia ($5.00) and even Hong Kong ($6.20). However, the service is more or less priced on par with markets like India ($1.80) and Philippines ($2.99).
Apple is trying to attract users by offering them a mix of both international and local music. The service will include titles from popular Chinese figures including Eason Chan, Li Ronghao, JJ Lin and G.E.M in addition to Hollywood artists like Taylor Swift.
We believe that in the initial trial period, the service can witness robust demand given the huge online user base (650 million in 2014 per International Federation of the Phonographic Industry report).
But Apple will face the real challenge once the free period is over as users are not only price sensitive, but also have easy access to pirated content. As Apple is a late entrant, the local players have already captured most of the paid market.
Whether it is able to attract users or create new demand based on its strong ecosystem is something to watch out for in the near term. However, the company remains optimistic, given the rising demand for its other offerings like iPhones and App Store despite a slowdown in the economy.
The service that is now available only for iOS devices will be made available for Google's GOOGL Android-based systems from this fall itself.
Currently, Apple carries a Zacks Rank #3 (Hold).
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