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Here's Why Apple Had No Other Choice But Bring Its Music Service To Amazon Alexa Smart Speakers

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In a surprise announcement on Friday, Amazon and Apple unveiled that Apple Music will start playing on Amazon Alexa speakers.

Starting the week of December 17, the 50+ million Apple Music subscribers (including the ones still in the free 1-month trial) will be able to ask Alexa to play their favorite songs, artists, and albums—or any of the playlists made by Apple Music’s editors. Customers will also be able to ask Alexa to stream expert-made radio stations centered on popular genres like Hip-Hop, decades like the 80s, as well as music from around the world, like J-Pop or K-Pop.

Music listening is smart speakers' most popular use

To turn on the service, users will simply have to enable the Apple Music skill in the Alexa mobile app (iOS or Android) and link their account to start listening.

“Music is one of the most popular features on Alexa—since we launched Alexa four years ago, customers are listening to more music in their homes than ever before,” said Dave Limp, senior vice president of Amazon Devices. “We are committed to offering great music providers to our customers and since launching the Music Skill API to developers just last month, we’ve expanded the music selection on Alexa to include even more top-tier services. We’re thrilled to bring Apple Music–one of the most popular music services in the U.S.–to Echo customers this holiday.”

According to Amazon, Alexa users stream tens of millions of hours of radio per month driven by the simplicity to request a content and have set tens of millions of music alarms since the Music skill feature launched less than a year ago.

Atherton Research

In addition, a recent study by Adobe Insight reveals that 70% of what users ask their smart speaker is related to music, followed by weather questions (64%), fun questions (53%), online search (47%), alarms or reminders (46%) and checking the news (46%).

Atherton Research's Take

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Apple has finally bowed to its music subscribers by letting them play their favorite songs on Amazon Echo smart speakers. So far, only the tech giant's own smart speaker, the HomePod, was able to stream content from Apple Music.

According to Apple CEO Tim Cook, the company's music streaming service has more than 50 million subscribers, which is about the same number of Alexa speakers shipped by Amazon so far.

Although, on a note to clients, my firm, Atherton Research, indicated that there is very little overlap between Apple Music and Amazon Music subscribers, a large number of Apple Music users are also Amazon Prime subscriberswhich includes Prime Music, a limited version of Amazon Music which also works with Alexaas well as Echo speaker owners and have been frustrated for not being able to use their Apple Music subscription on their smart device.

Out of frustration, some actually subscribed to the $4 a month Amazon Music Unlimited plan for their Echo speakers to stream music on their smart device, before opting for the full Amazon Music Unlimited service ($8/month for Prime subscribers and required if you have more than one Alexa speaker), cancelling their Apple Music subscription ($10/month).

Apple Music is expected to support Google Home too

Clearly, despite leading the music streaming market in the U.S., Apple was on the defensive going into this deal: As the popularity of Amazon smart speakers surgeApple Music is trying to pre-empt the switch en masse of its subscriber base to either Amazon Music or worse, to its top rival, Spotifywhich is also available on Alexa.

For the Swedish music streaming service, which has more than 87 million paid subscribers (including the ones currently on a free trial), we don't believe this deal will have a significant impact. Spotify is offering a free ad-supported subscription tier which Apple does not, that already attracted more than 100 million subscribers. Furthermore, the Stockholm-based company plans to make its Spotify Free service also available on smart speakers.

For Amazon, the Apple Music deal is huge as it's a clear differentiator with its main rival, Google Homea close second to Alexa.

According to the latest Canalys report on smart speakers sales in the third quarter of this year, Amazon Echo has 32% global market share, reclaiming the top spot after 2 quarters behind Google Home, now at 30%.

Finally, in its effort to catch up to Spotify, we expect Apple to soon expand its music streaming service to Google Home speakers as well. Apple Music is already available on Android, Windows and Sonos wireless speakers.

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