Apple Inc. held its earnings call yesterday, revealing record quarterly revenue ($57.6B), profit of $13.1B, record iPhone sales breaking the 50-million mark for the first time, record iPad sales of 26-million units — yes, yes, enough of all that. Tell us about iTunes Radio!
Crickets.
For those focused on music and online audio, it’s easy to forget that Apple is not a music company, but a hardware vendor. Because mobile consumer hardware is necessarily about media delivery, Apple and Google and Microsoft are media companies also, but secondarily.
Apple did brag about iTunes sales, but the figures lumped apps, video, and books with music. The company also broke out mobile app sales, making it possible to extrapolate a percentage — app sales of $2.9B represent over 60 percent of total $4.7B iTunes income. The phrase “iTunes Radio” was not uttered during the call.
iTunes Radio and Pandora are framed as competitors in the media, and they do compete, but the two companies handle metrics marketing differently. Pandora compiles proprietary measurements of audience size, hours listening, and share of total U.S. radio listening. That monthly drumbeat of reporting keeps the company in the news and charts relentless (though decelerating) growth.
Unlike Pandora’s highly verticalized business, Apple is a horizontal ecosystem of related devices and services, in which iTunes Radio is merely a feature. Apple brought a streaming product to market rather late (though it led the new wave of U.S. competitors that will eventually include Beats Music, Deezer, and YouTube), and iTunes Radio can be considered a “plug” service — filling a product gap to retain existing users. Apple followed the market to streaming; Pandora helped lead the market to streaming.
So, no call-out of iTunes Radio in this earnings report.
After missing on iPhone projections, I’m not sure anyone would have heard the regardless.
For the investors on the call, I’m sure that’s true.