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Apple Makes Rare Cross-Platform Play With Apple Music

By Evan Niu, CFA - Nov 30, 2018 at 1:30PM

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Apple Music is coming to Amazon Echos.

Apple (AAPL 1.62%) isn't usually all that great at sharing its offerings with other platforms, typically preferring to keep as much as it can within its own proprietary platforms -- that whole "walled garden" thing and all. It's extremely rare for the Mac maker to offer its services on other platforms, but that's precisely what is being announced today. Amazon.com (AMZN 3.15%) has just confirmed that Apple Music will come to its incredibly popular line of Alexa-powered Echo devices starting the week of Dec. 17.

That's a huge win for both companies.

Amazon Echo on a kitchen counter

Apple Music, coming soon to an Amazon Echo near you. Image source: Amazon.

Breaking down the news

It's worth noting that Apple Music has long been available on Android, so it's not unprecedented for the company to make its music-streaming service available on other platforms. It's unclear how many Android users subscribe to Apple Music, although the app's listing notes it has been installed over 10 million times.

Amazon's own music-streaming services have never been that popular. While the e-commerce giant said earlier this year that it had "tens of millions" of music subscribers, that likely includes anyone subscribed to Amazon Prime, which has the more limited Prime Music that only has 2 million songs.

The more important figure -- that Amazon won't disclose -- would be how many subscribers Amazon has for Amazon Music Unlimited, which is more comparable to Apple Music and Spotify (SPOT 3.93%). Spotify is also available on Echo devices, along with just about any other smart speaker you can think of. Amazon had merely said in April that Amazon Music Unlimited subscribers had doubled over the prior six months. The company has always enjoyed using those types of context-less comparisons.

While Apple Music is coming to Echos, it's just as interesting what's not happening. Apple isn't bringing other music-streaming services to its own HomePod smart speaker, which still only supports Apple Music. If the company were to bring Spotify to the HomePod, that would dramatically expand the addressable market to include Spotify's massive user base and potentially boost sales of the $350 high-fidelity device. Spotify now has 191 million monthly active users (MAUs) and 87 million premium subscribers. (Not all premium subscribers are MAUs, though.)

More coopetition

The news is the latest collaboration between Apple and Amazon, which have been increasingly working together over the past year. After a yearslong impasse, Amazon Prime Video finally became available on Apple's tvOS platform late last year, signaling that the relationship between the two rivals was warming up.

Just this month, Amazon finally started to sell Apple products (notably excluding the iPhone and HomePod) directly on its site, the largest e-commerce platform on the planet. That adds a massive distribution channel for Apple, while ensuring Amazon customers can get Apple products directly from the Mac maker. Historically, that void has been filled by third-party resellers, many of which Amazon will no longer allow to sell Apple products effective January.

With Apple and Amazon increasing their coopetition, consumers win.

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Stocks Mentioned

Apple Inc. Stock Quote
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