earnings

Apple’s iPhone Sales Drop Again, but Services Are a Bright Spot 

The introduction of the 4-inch iPhone SE earlier this year appeared to hurt revenue and profits as some customers bought that device instead of Apple’s bigger, more expensive models.

“Apple is moving from only iPhones matter to iPhones and services matter,” said Ben Schachter, an analyst with Macquarie Securities, who estimated that nearly one-third of the company’s quarterly profits came from services like App Store purchases, Apple Music subscriptions and the iCloud storage business. Revenue in the segment rose 19 percent to $6 billion.

Source: Apple’s iPhone Sales Drop Again, but Services Are a Bright Spot – The New York Times

Spotify financials raise questions about streaming economics

The concerning thing here is the margins involved: sales and marketing costs alone sucked up more than three quarters of Spotify’s €321.7m gross profit. In a market where Spotify’s key rivals are now Apple, Google/YouTube and Amazon – tech giants with hefty cash reserves and built-in marketing platforms to take advantage of – Spotify’s marketing costs are only going to increase.

Bright spots? Spotify’s subscription income grew by 78% in 2015 to €1.74bn, as it ended the year with 28 million subscribers. Its advertising revenues grew faster though: up 98.2% to €195.8m, although ads remain just over 10% of Spotify’s overall turnover compared to nearly 90% for subscriptions. That 10-90 ratio of ads-to-subscriptions hasn’t changed since 2013.

Source: Spotify financials raise questions about streaming economics

Spotify lost more money than ever last year — which is great news for Spotify 

Filings show that Spotify, based in Sweden and the U.K., generated revenue of $2.12 billion last year, up about 80 percent from the $1.18 billion it brought in the prior year (all prices in the story converted from euros to dollars at the exchange rate from December 31, 2015). Losses, meanwhile, hit $188.7 million — but that number was only up 6.7 percent from the previous year’s total of $176.9 million.

That’s a much, much better performance than 2014, when Spotify’s losses ballooned by 289 percent, and its revenue was only up 45 percent.

Source: Spotify lost more money than ever last year — which is great news for Spotify – Recode

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