Apple tends to not care much about price competitiveness. Without telco subsidies, which typically occur only in rich countries, consumers looking to buy an iPhone 6 in Asia will have to shell out as much as $600.
But the company is taking a different approach with Apple Music, its new music streaming service. Over a hundred countries will get access to the service today, but whereas prices for iPhones tend to stay high even in poor countries, in the case of Apple Music they’re lower—indicating the company is serious about courting emerging markets with digital media.
In the US, Apple is charging monthly fees of $10 for an individual Apple Music account, and $15 for a family account that can be shared with up to six people. In poorer countries, the pricing is much lower. In India, for example, the monthly fee is $2 for individual and $3 for family plans. In Brazil, Indonesia, and Thailand, it’s $5 and $7; in Hong Kong, $6 and $10; and in Singapore, $7.50 and $11 (in US dollars).
In rich countries Apple must take on Spotify, whose premium-level customers pay about $10 per month for unlimited streaming. But it faces strong competitors in emerging markets, too. While Spotify doesn’t operate in India and parts of Southeast Asia yet, local players do, often catering to users with little money but a big appetite for local music.
In India, Rdio acquired a local streamer for its Indian licenses and began offering a subscription service for just $0.60 a month, on top of a free ad-supported service. Guvera and KKBox, meanwhile, have targeted Southeast Asia by incorporating local payment options and aggressively building out catalogs of local music. Apple knows that if it charges more than such incumbents do in price-sensitive markets, it’ll get cooked.
Will Apple Music help sell iPhones the way iTunes did? Apple did offer iTunes on Windows to boost hardware sales, after all. The streaming service will be available to Android users, which some might interpret as an attempt to lure them to iPhones, particularly in emerging markets.
But iTunes usually offered a superior experience than competitors. Most streaming services, on the other hand, are just as easy to use as Apple Music.
Apple remains a healthy outlier in Asia’s smartphone market, even as other brands slash prices and products grow commoditized. But in music streaming it’s a latecomer—albeit one with a cool brand name.