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Apple to Open Curtain on Beats Music by Month End

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Apple Inc.AAPL is finally shutting down its Beats music service from Nov 30 onward. The company will be cancelling the subscriptions for this service, allowing users to shift to Apple Music, which was launched in June this year.

Apple had acquired Beats Music in 2014 for $3 billion to boost its music streaming service. Beats was popular for its consumer electronics (primarily headphones) and human-curated playlists (a feature that has been incorporated in Apple Music). In fact, the top leadership at Beats including Jimmy Iovine, Dr. Dre and Trent Reznor has contributed immensely to Apple Music.

It was expected that the company would likely close the Beats Music division as it has a track record of closing the acquired companies, after introducing their features and technology in its own offerings. However, it seems that this time the company wanted to get a clearer picture about the performance of Apple Music before shuttering Beats Music.

As per the latest statistics, of Apple Music's 15 million total users, 6.5 million are paid subscribers. In less than four months, the music streaming service has amassed nearly a third of the paid subscribers that its main competitor Spotify has enrolled in seven years. And importantly this was only from the iOS user base! Apple has recently launched the service for Android devices, which is further expected to add to its user base, given the fact that the market share for Android users is much more than iOS, in terms of volume.

The move will likely strengthen Apple Music and the company will have its focus on developing the service furthermore, thereby gaining an edge over its peers.

Currently, Apple has a Zacks Rank #3 (Hold). Some better-ranked stocks in the tech sector include Facebook, Inc. FB , Shopify Inc. SHOP and LendingClub Corp. LC . All three stocks have a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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