WWDC 15 – In the crosshairs.

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Apple targets Spotify, Rdio, Pandora and Flipboard at WWDC.

• Apple Music was the biggest event at Apple’s developer conference where incremental updates to its operating systems and Apple Pay UK were also launched.
• With the exception of Apple Music and News, almost all of Apple’s announcements were incremental in nature.
• OSX El Capitan and iOS9 are upgrades to the existing code focusing on better performance with lower overheads.
• These upgrades also showed off a few new tweaks that bring Apple’s functionality into line with features that have been developed by Google and Microsoft.
• News is a new service from Apple that replicates Flipboard in terms aggregating news in an easy and fun to use way.
• News will now be default on every iOS device which has just made Flipboard’s life significantly more difficult.
• The big news of the day was the launch of Apple Music which offers music streaming, radio and curated playlists for $9.99 a month.
• Apple promises to offer 30m songs available for streaming as well as curated playlists and suggestions based on the user’s preferences and history.
• Apple Music also gives artists a medium through which to communicate with their fans but Apple will not be sharing the usage data with the artist.
• RFM’s research strongly indicates that this is not what artists want.
• Artists want to know who is buying or listening to their music, when and why.
• They also want to be able to communicate with them directly to be sure that their fans have all the information about that artist, new releases, concerts and so on.
• Apple Music is a reasonably closed system where users have a relationship with Apple but not with each other.
• This is the big difference between Spotify and Apple.
• Spotify is much more open in that users can follow other users’ playlists meaning that the selection of playlists is much greater than anything that Apple is going to be able to offer.
• Spotify already has much more data than Apple Music and it can use this data to make better and more relevant suggestions to users as well as enhance the user experience further.
• The danger for Spotify, Pandora and Rdio is Apple’s installed base of 330m users and the very long free trial period.
• Every user that updates to iOS8.4 will automatically be able to trial the service for 3 months at no charge.
• Additionally, subscribing to the service will be easy given that every user already has a credit card relationship with Apple.
• However, the initial view of the user experience looks no better than anything offered by Spotify, Pandora or Rdio and Spotify in particular has a raft of cool features (such as track preview) in its experience that Apple Music does not have.
• Furthermore, all of these companies have a huge head start on Apple and Apple will have to convince users to switch rather than try music streaming for the first time.
• This is a much more difficult proposition to make.
• The most dangerous time for all of these companies is the free trial period.
• They need to find a way to keep their users happy during the free trial period and make sure that their users stay with them rather than defect to Apple.
• Apple does not have a good record in this area with the quality of services like Ping and Maps being well below alternative services from third parties.
• The jury is out on how good the Apple Music service really is but it will have to be superb in order to get paying customers to switch.
• Hence, I think that as long as the competitors can keep their users happy during the initial roll out, hype and free trial period, they should not be too adversely affected by the presence of this service.
• Finally, Apple has never had to compete with “free” before and I suspect that it might find it much harder than it thinks because it is here where most of the users are to be found.
• The end result of WWDC 15 is an evolution and improvement of Apple’s software that does not make life any more difficult for its main ecosystem competitors.
• In that vein I continue to prefer Microsoft and Google for upside in the digital mobile ecosystem.