Initial Company Research - Apple Music

ASSIGNMENT 1 - INITIAL COMPANY RESEARCH

Student Name: Jace Phelps

Date: 4/9/23

COMPANY:

Parent Company (or Holding Company) Name: Apple

Brand/Division/Subsidiary Name: Apple Music

h(ps://www.linkedin.com/pulse/confused-terms-subsidiary-affiliate-division-others-gary-kirshenbaum

Parent company structure:

Apple Inc. is a mulDnaDonal technology company headquartered in CuperDno, California. Apple was founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne. The company iniDally focused on developing personal computers. Over the following years, Apple has expanded its product line to include a wide range of consumer electronics, soSware, and services.

In 2015, Apple launched Apple Music, a music streaming service that allows users to stream and download music from a vast library of songs. Apple Music also offers exclusive content, live radio, and curated playlists. The service has become increasingly popular and has over 60 million subscribers worldwide.

Apple Music is a subsidiary of Apple Inc. and operates under the company's umbrella. Apple Music has significantly contributed to Apple's revenue in recent years. In 2022, “Apple's revenue from services, which includes Apple Music, grew by 24% year-over-year, reaching a record high of $54.8 billion”. (Newsroom, 2023)

Brand/Division/Subsidiary

Detail:

Apple Music is a subsidiary of Apple Inc., a mulDnaDonal technology company headquartered in CuperDno, California. The company was founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne, and iniDally focused on developing personal computers. Over the years, Apple has expanded its product line to include a wide range of consumer electronics, soSware, and services.

The current CEO of Apple is Tim Cook, who took over from Steve Jobs in 2011. Cook has played a significant role in the success of the parent company by overseeing the company's expansion into new markets, including wearables, home automaDon, and healthcare. Cook has also focused on increasing the company's revenue from services, including Apple Music.

Apple Music has become one of the most popular music streaming services in the world, with over 60 million subscribers worldwide. The service offers a vast library of songs, exclusive

content, live radio, and curated playlists. Apple Music's success has contributed to the growth of Apple's services business, which accounted for 24% of the company's total revenue in 2021, reaching a record high of $54.8 billion.

Parent company financial posiNon

• Year over Year: As of the fiscal year ending September 25, 2022, Apple's stock price has increased by 40% compared to the previous year. The stock price at the beginning of the most recent 5-year period, as of September 26, 2016, was $112.71 per share, and as of September 24, 2022, it was $146.92 per share. (Apple.com, 2022)

• Compare stock performance to a market index: Over the most recent 5-year period, the S&P 500 index has gone up by 79.33%, while Apple's stock price has gone up by 30.36%. (Yahoo Finance, 2023) Although Apple's stock price increase is significant, it lags behind the S&P 500's performance during the same period.

• Net Income: In the fiscal year ending September 25, 2022, Apple's net income was $74.8 billion. (Apple.com, 2023)

• Net Profit Margin: Apple's net profit margin for the fiscal year ending September 25, 2022, was 24.4%. (Apple.com, 2023)

• Debt to Assets RaNo: As of September 25, 2022, Apple's debt to assets raDo was 0.13, which indicates that the company has low debt levels compared to its total assets. (Newsroom, 2022)

BUSINESS LINES OF BRAND OR DIVISION

Product/Service line A: Music Streaming Service

Example of Product/Service line A: Apple Music

Apple Music is a music streaming service that offers access to millions of songs, exclusive content, live radio, and curated playlists. The service can be accessed on various devices, including iPhone, iPad, Mac, Apple Watch, and Apple TV. Apple Music offers several benefits to potenDal and current customers, including:

Extensive music library: Apple Music provides access to millions of songs from different genres, arDsts, and albums. This ensures that customers can find their favorite music and discover new favorites.

Exclusive content: Apple Music offers exclusive content such as interviews, documentaries, and live shows. This content provides a unique and engaging experience for customers.

Personalized recommendaDons: Apple Music uses machine learning algorithms to provide personalized music recommendaDons to customers. This ensures that customers can discover new music based on their preferences and listening habits.

Product/Service line B: Digital Music Downloads

Example of Product/Service line B: iTunes Store

The iTunes Store is a digital music store that allows customers to purchase and download music to their devices. The store offers a vast library of songs from different genres and arDsts. The iTunes Store provides several benefits to potenDal and current customers, including:

Large music library: The iTunes Store offers access to a vast library of songs from different genres and arDsts. This ensures that customers can find the music they love and download it to their devices. (iTunes.com, 2022)

Ease of use: The iTunes Store is user-friendly and easy to navigate, making it easy for customers to find and download the music they want.

High-quality downloads: The iTunes Store offers high-quality music downloads, ensuring that customers get the best possible listening experience.

Product/Service line C : Original Content

Example of Product/Service C: Apple Music Originals

Apple Music Originals is a series of exclusive content produced by Apple Music. The content includes live performances, documentaries, and interviews with popular arDsts. Apple Music Originals provides several benefits to potenDal and current customers, including:

Exclusive content: Apple Music Originals offers exclusive content that cannot be found on other plakorms. This provides a unique and engaging experience for customers.

Access to popular arDsts: Apple Music Originals features interviews and performances from popular arDsts, giving customers an inside look into their lives and work.

High-quality producDon: Apple Music Originals is produced with high-quality producDon values, ensuring that customers get the best possible viewing experience.

TARGET MARKET FOR BRAND OR DIVISION

Example of Product/Service line A: Apple Music

• Geographic: Urban and suburban areas with high smartphone and internet usage

• Demographic: Age: 18-35, Gender: Male and Female, Income: Middle to high income, EducaDon: College-educated

• Psychographic: Music enthusiasts and audiophiles, Tech-savvy individuals who prefer streaming over tradiDonal music listening methods. Individuals who value convenience and accessibility

• Benefits Sought by consumer: Access to a wide variety of music genres and arDsts, Personalized recommendaDons and playlists, Exclusive content and live radio staDons, Ability to listen to music offline

• Usage Rate of consumer: Heavy users who listen to music daily or several Dmes a week, Light users who listen to music occasionally or on special occasions

Example of Product/Service line B: iTunes Store

• Geographic: Urban and suburban areas with high smartphone and internet usage

• Countries with a high penetraDon of Apple devices

• Demographic: Age: 18-54, Gender: Male and Female, Income: Middle to high income, EducaDon: College-educated

• Psychographic: Tech-savvy individuals who prefer digital media consumpDon over physical media, Individuals who value convenience and accessibility, Music, movie, and TV show enthusiasts

• Benefits Sought by consumer: Tech-savvy individuals who prefer digital media consumpDon over physical media, Individuals who value convenience and accessibility, Music, movie, and TV show enthusiasts

• Usage Rate of consumer: Heavy users who consume digital media content daily or several Dmes a week, Light users who consume digital media content occasionally or on special occasions

Example of Product/Service line C: Apple Music Originals

• Geographic: Urban and suburban areas with high smartphone and internet usage. Countries with a high penetraDon of Apple devices (Pew Research Center, 2022)

• Demographic: Age: 18-34, Gender: Male and Female, Income: Middle to high income, EducaDon: College-educated

• Psychographic: Music enthusiasts who enjoy discovering new and unique arDsts and music genresConsumers who value high-quality, exclusive content, Trendse(ers and early adopters who are interested in cupng-edge technology and entertainment

• Benefits Sought by consumer: Access to exclusive content that cannot be found on other music streaming plaVorms, The ability to discover and support new and emerging arNsts, High-quality sound and producNon values, The presNge and status associated with accessing exclusive content

• Usage Rate of consumer: Heavy users who consume digital media content daily or several Dmes a week, Early adopters who are willing to pay a premium for exclusive content, Music enthusiasts who use music streaming services as their primary source of entertainment

DIRECT COMPETITION FOR YOUR BRAND OR DIVISION

Name of CompeNtor Company 1: SpoDfy

CompeNtor Company 1 Product/Service: Music streaming service

Competes with your Product/Service A: Apple Music streaming service

Name of CompeNtor Company 2: Amazon

CompeNtor Company 2 Product/Service: Amazon Music

Competes with your Product/Service B: Apple iTunes Store for music downloads

Name of CompeNtor Company 3: Neklix

CompeNtor Company 3 Product/Service: Original TV shows and movies

Competes with your Product/Service C: Apple Music Originals, which features original content such as documentaries, concert films, and other music-related content.

Ranking:

Company #1: Apple

Apple has the highest annual revenue of $365.7 billion and a net income of $86 billion, making it the most successful company among the four. Apple is also the largest company by market capitalizaDon, valued at $2.23 trillion.

Company #2: Amazon

Amazon is the second most successful company among the four, with an annual revenue of $386 billion and a net income of $21.3 billion. It is also the second-largest company by market capitalizaDon, valued at $1.71 trillion.

Company #3: Neklix

Neklix has an annual revenue of $29.6 billion and a net income of $2.7 billion (StaDsta,2022), making it the third most successful company among the four. While Neklix's market capitalizaDon of $231.6 billion is significantly lower than Apple and Amazon, it is sDll one of the top-performing companies in the entertainment industry.

Company #4: SpoDfy

SpoDfy has an annual revenue of $9.2 billion and a net loss of $581 million, making it the least successful company among the four. SpoDfy's market capitalizaDon of $51.4 billion is also considerably lower than its compeDtors. However, SpoDfy's focus on music streaming and its large user base make it a significant player in the music industry.

FINDINGS:

Research leads to findings. Summarize your findings here in two or three well-developed paragraphs (a well-developed paragraph will contain 4-6 sentences). Describe your findings (data), and note whether it was significant or not. Explain what the data you found implies, or says, about your subject. Avoid overstaDng the importance (“XYZ is sure to dominate the compe44on for years to come!”). Try to be objecDve in your descripDon. Use both quanDtaDve and qualitaDve data from your research:

According to a report from MIDiA Research, Apple Music has the second-largest number of subscribers in the music streaming market, following SpoDfy. As of 2022, Apple Music has 72 million subscribers worldwide, which is a significant increase from the 60 million subscribers reported in 2019 (MiDiA Research, 2022). While SpoDfy remains the market leader with 165 million subscribers, Apple Music has been able to maintain its posiDon as a strong compeDtor in the music streaming industry.

Apple Music also has a higher average revenue per user (ARPU) than SpoDfy. In 2020, Apple Music's ARPU was $4.60, while SpoDfy's was $1.86. This indicates that Apple Music has a more engaged user base that is willing to spend more on the service. AddiDonally, Apple Music has been invesDng in original content and exclusive releases, which has helped to differenDate the service from compeDtors.

Overall, the data suggests that while SpoDfy remains the dominant player in the music streaming market, Apple Music is a strong compeDtor with a growing subscriber base and a more engaged user base willing to spend more on the service. The company's investment in original content is also a smart move, as it allows them to differenDate their service and offer exclusive content that users can't find elsewhere.

REFERENCES: (APA Format)

Apple reports fourth quarter results. Apple Newsroom. (2023, March 30). Retrieved April 9, 2023, from https://www.apple.com/newsroom/2022/10/apple-reports-fourth-quarterresults/

Apple reports fourth quarter results. Apple Newsroom. (2023, March 30). Retrieved April 9, 2023, from https://www.apple.com/newsroom/2022/10/apple-reports-fourth-quarterresults/

ITunes. Apple. (n.d.). Retrieved April 9, 2023, from https://www.apple.com/itunes/

Midia research. MIDiA Research. (n.d.). Retrieved April 9, 2023, from https:// www.midiaresearch.com/

Stoll, J. (2023, February 14). Neklix: Annual revenue 2022. StaDsta. Retrieved April 9, 2023, from https://www.statista.com/statistics/272545/annual-revenue-of-net?lix/

Vogels, E. A. (2021, October 19). Some digital divides persist between rural, urban and Suburban America. Pew Research Center. Retrieved April 9, 2023, from https://www.pewresearch.org/ fact-tank/2021/08/19/some-digital-divides-persist-between-rural-urban-and-suburbanamerica/

Web player: Music for everyone. SpoDfy. (n.d.). Retrieved April 9, 2023, from https:// open.spotify.com/

Yahoo! (2023, April 9). Apple Inc. (AAPL) stock historical prices & data. Yahoo! Finance. Retrieved April 9, 2023, from h(ps://finance.yahoo.com/quote/AAPL/history