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  • KPB & Co Research

It has been 2 months since we spoke about the challenges that Spotify and other audio streaming companies have been experiencing when competing with Apple Inc on the App store. Spotify CEO - Daniel Ek- wrote an open letter about the company's practices, and launched a marketing offensive. Customers of the iPhone also launched a case against Apple that was taken to the supreme court where they won the ability to sue Apple. Regulators have also launched a number of probes into the company seeking whether the company is guilty of anti-competitive behaviour.

At the centre of the debate is whether apple has been using it power and influence as the owner-operator of the App Store to create an unfair advantage. Apple charges a 30% fee for selling items in the App store, while limiting the availability of select features of their devices so that company owned Apps can receive an unfair advantage from the knowledge.

At the 2019 Apple Worldwide Developers Conference (WWDC) the company announced their intension to open up the audio streaming API for external developers. With this new feature, external developers should now be able to build audio apps for the Apple Watch series. In addition Apple is also opening up its SiriKit framework to third-party music, podcasts, audiobooks, and radio apps in iOS 13 and iPadOS. This will allow developers to build applications that will allow Siri to control audio playback. This level of access is one of the key points of contention that Spotify had with the company, and it appears that Apple is prepared to give up some ground here.

Apple WWDC Conference 2019

Apple WWDC Conference 2019

On the other hand, the company has definitely up the ante for its podcasts platform, particularly since Spotify purchased Gimlet Media and Anchor to boost its podcast offering. Gimlet Media is a start-up podcast network, and Anchor provides creators with tools to build, publish, and monetize podcasts. Spotify also acquired Parcast, which is another podcasting network that specializes in crime, mystery, and science fiction.

At the WWDC, Apple also announced the Separation of the iTunes App into several components for the Macbook platform, and the creation of a search functionality for podcasts. This indicates the possibility that the company is looking to place more management focus on the podcasting segment of the market. Going forward, it is quite likely that more features will be coming on stream, as the company looks to present a more competitive product to the market. Already, the company has the largest podcast network in the world, but the company lacks the necessary offerings to allow monetization, and data analytics for content creators.

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