Apple Pay

Apple’s August Anxiety Arrives

Something strange sometimes happens with Apple as summer gives way to fall. For most of the year, Apple is more or less the world’s favorite consumer brand (as you can see by looking at their stock). But for one 4-6 week period every year, the media suddenly cops an attitude.

“We Now Know That Apple And The iPhone Jumped The Shark In 2011” was cNet’s contribution in early August 2012.

Two years later it was déjà vu all over again in 2013 when the good people at TechTell were rounding out August asking “Has Apple Finally Jumped The Shark This Time…?”

Late August- early September isn’t the only time of year Apple draws negative headlines, but it seems to be the most consistent time that they do.

Maybe it’s the heat making people cranky or maybe it’s the realization that summer is nearing its end, but for whatever reason, late summer is pretty consistently the season of Apple’s discontent.

And August 2015 is falling into lockstep. Hand-wringing over Apple’s diminished stock price and Apple Pay’s lagging adoption rates have taken up lots of digital column inches during summer’s waning days. Adding to the pile this week have been reports about Apple Music services, which by some accounts is driving consumers away at almost as impressive a rate as the one at which it first signed them up. Apple – in a rare response – disputed those reports this week as “gross exaggerations.”

So who said what exactly, what’s actually going on and is anyone rocking out with Apple these days? PYMNTS has the breakdown.

Have Almost 50 Percent Of Apple Music Users Already Opted Out?

If MusicWatch is to be believed, the answer to that question is “yes.”

On Monday, the firm — which specializes in consumer research on the music industry — reported some ominous numbers for Apple’s emerging streaming service.

Of users who’ve tried the service, MusicWatch found 48 percent have already signed off. A little over half of those who are still using the premium pay-to-stream service (though they may or may not be paying depending on when they signed up – there is a free 90-day trial period – remember the Taylor Swift controversy over artists being paid for that time?) have been at least partially poached from a rival. Twenty-eight percent report also being Spotify Premium (paid) customers. Those who use the ad-supported free version of Spotify are less likely to jump on board with Apple — as only 11 percent of users report that they will buy from Apple what they get from Spotify for free.

iOS and Mac users seem to be largely aware of the service – as in 77 percent noting they had at least heard of it before, according to the MusicWatch report. But, despite that, only 11 percent report using the service.

“In terms of benchmarking Apple Music, 40 percent of iOS users are buying digital downloads from iTunes, suggesting trial of Apple Music could be higher,” said Russ Crupnick, Managing Partner of MusicWatch. “That’s the disadvantage of not being the first mover in a market where very good services currently exist.”

There were some positive trends noted in the MusicWatch report. Users of Apple streaming, for example, were not abandoning buying digital media, and some reported being somewhat more likely to download tracks or whole albums as a result of using it. And almost two-thirds affirmed they intend to continue using the service — even when the free trial period is over.

However, the headline that gained the most traction was about the low usage rates — and the high abandonment rates — with many wondering if Apple really is just too late to this particular party.

Apple Responds

Twenty-four hours after the apocalyptic headlines about the future of Apple Music made the rounds, Apple did something it is not known for doing: it responded with numbers of its own.

The notoriously secretive firm shot back, claiming that MusicWatch’s 48 percent figure is just plain wrong — and that actual number for Apple streaming abandonment is currently 21 percent, meaning 79 percent of those that signed on are still out there.

According to reports in the LA Times, Apple has also reached out to MusicWatch so that the two firms can compare their numbers, according to Crupnick. Crupnick also noted that while he stands by his firm’s figures, he does not quite understand the rush to jump to the conclusion that they indicated Apple Music is in trouble.

“We have to be sure we’re measuring the same thing,” Crupnick noted. “I do think it’s unfortunate that some color has been added to the number suggesting simply that Apple Music is struggling, or worse yet, failing. That wasn’t my conclusion at all.”

The moral of the story? August is historically not a good month to make predictions about Apple — however tempting it may be. After all, everyone who predicted that the iPhone 6 would flop last September (remember – Bendgate?) had a lot of crow to eat over the course of the year. Now that’s not to say Apple Music is a lock for success, but just that August is a notoriously bad month for predicting failure.

Now, about Apple Pay. We’ll let the numbers stand for themselves.

For more news on Apple Pay adoption, click here.


New PYMNTS Study: Subscription Commerce Conversion Index – July 2020 

Staying home 24/7 has consumers turning to subscription services for both entertainment and their day-to-day needs. While that’s a great opportunity for providers, it also presents a challenge — 27.4 million consumers are looking to cancel their subscriptions because of friction and cost concerns. In the latest Subscription Commerce Conversion Index, PYMNTS reveals the five key features that can help companies keep subscribers loyal despite today’s challenging economic times.

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