Analyst: Yahoo music service will not impact iPod market share

Posted:
in iPod + iTunes + AppleTV edited January 2014
Although Apple stock is seeing some pressure following Yahoo's recently announced music download service, Wall Street analysts believe Apple's iPod market share will remain largely unaffected by the emergence of the subscription-based service.



In a research note released to clients this morning, research and investment firm PiperJaffray said it views the pull-back in shares of Apple as a buying opportunity. "We do not anticipate the market share of the iPod will be meaningfully impacted by the emergence of Yahoo! and other music subscription services," said Gene Munster, a senior analyst at the firm.



Earlier this morning, J.P. Morgan analyst Bill Shope offered similar sentiments, saying Yahoo's new service "does little to break the tight grip that Apple has on the nascent digital music market with its iPod-iTunes link."



"We have seen over the last 2 years that the success of online music services is driven by compatible devices," Munster said. He noted that despite the emergence of new music services in the past year, Apple has maintained its approximate 80% market share in the portable audio device market. "In other words, the risk to Apple is a killer new MP3 player, not a new online music service."



Yahoo's music download service, announced last night in beta form, offers introductory pricing of $6.99 per month or $59.88 per year. But Munster believes that Yahoo will raise pricing to between $10-$15 per month once the service gets on its feet.



PiperJaffray is maintaining its "Outperform" rating on Apple stock with a price target of $52 a share.

Comments

  • Reply 1 of 4
    hmurchisonhmurchison Posts: 12,419member
    The Introductory Pricing is only going to last so long. People will flock to the service until the price goes up and then Yahoo will be where all the others are. Sharing a minority market where noone gets their bellies full.



    Poor Napster though...they just raised their guidance and Yahoo could negatively affect their remaining qtrs this year.
  • Reply 2 of 4
    For all Yahoo's hype, its just another rental option that leaves people at Microsoft's mercy. The DRM is built into hardware, for heavens sake, so even if you buy the song you are SOL if Microsoft changes formats.



    I'm glad some analysts have brains and don't buy the hype. The RIAA sure want's you to rent music, but its a rip off for customers.
  • Reply 3 of 4
    nofeernofeer Posts: 2,427member
    i like things simple, i have the best products in ipod and itunes, why then glom up my system with other stuff just to save a few cents, besides, most of my music is from my cd collection so buying is a minority of my music. but why change my habits, signins, usability etc, it's not just price. it's the total package. this will affect the other non apple players as services scramble to carve out the non ipod/itunes market. napster beware.

    itunes/ipod is like peanut butter and jelly, ham and cheese abbot and costello==apple is pure genius why stray with dunce.. sure we like to dable in change but once comfortable we don't want to learn two, three systems. if apple charged 1.25 i'd still buy i just love the interface. it's the gold standard till they replace gold.

    my wife says "if i can't use my ipod there is no sense in changing"
  • Reply 4 of 4
    sunilramansunilraman Posts: 8,133member
    Quote:

    Originally posted by NOFEER

    i like things simple, i have the best products in ipod and itunes, why then glom up my system with other stuff just to save a few cents, besides, most of my music is from my cd collection so buying is a minority of my music. but why change my habits, signins, usability etc, it's not just price. it's the total package. this will affect the other non apple players as services scramble to carve out the non ipod/itunes market. napster beware.

    itunes/ipod is like peanut butter and jelly, ham and cheese abbot and costello==apple is pure genius why stray with dunce.. sure we like to dable in change but once comfortable we don't want to learn two, three systems. if apple charged 1.25 i'd still buy i just love the interface. it's the gold standard till they replace gold.

    my wife says "if i can't use my ipod there is no sense in changing"




    hear,hear...
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