As streaming music leader Spotify prepares for an initial public offering, Apple‘s (AAPL) rival service, Apple Music, is ramping up the competitive pressure.
Autoplay: On | OffThe Silicon Valley giant’s latest moves to bulk up Apple Music should sound like “battle drums” to Spotify, RBC Capital Markets analyst Amit Daryanani said in a note to clients Thursday. Apple Music is central to the company’s push to double its services revenue by 2020, Daryanani said.
Apple expects its services business to be the size of a Fortune 100 company, or roughly $28 billion in revenue, for its fiscal year ending Sept. 30. In addition to Apple Music, Apple’s services include the App Store, AppleCare, iCloud, Apple Pay and others.
Apple is currently a distant No. 2 behind Spotify in subscription on-demand streaming music. Spotify has about 50 million paying subscribers compared with 27 million for Apple Music.
Apple has taken multiple steps recently to improve its competitive position against Spotify, Daryanani said.
For instance, Apple began offering a lower price for subscribers who pay on an annual basis — at $99, or $8.25 a month — instead of its standard, pay-as-you-go plan of $9.99 a month.
Also, Apple reportedly is negotiating with record labels…