Apple-Spotify Competition: Is Hardware the Next Battlefront?


Mar. 22 2018, Updated 9:01 a.m. ET

Spotify testing Siri competitor

Spotify is Apple’s (AAPL) fiercest competitor in the streaming music market. With more than 70 million people paying for its music service, Spotify boasts nearly twice as many paying streaming music customers as Apple Music. Pandora (P) has a little more than 5 million paying listeners on its streaming service.

It appears that the Apple-Spotify competition could spill over beyond selling subscriptions to digital music. According to a report by The Verge, Spotify is quietly testing a voice-enabled digital assistant akin to Siri from Apple and Alexa from Amazon (AMZN).

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The HomePod barrier

Siri is the technology that enables Apple’s HomePod smart speaker to understand and respond to voice instructions. But when it comes to music operations, HomePod only works with Apple Music and doesn’t support Spotify. Amazon’s Alexa-based Echo smart speaker allows users to browse Spotify through voice commands.

By developing its own voice search system, Spotify is viewed as trying to give its customers a native voice experience instead of relying on third-party platforms such as HomePod and Amazon’s Echo speaker.

Challenging Apple for hardware revenue

Spotify’s work on a voice search feature could ultimately lead to a battle with Apple in the hardware market. With its own voice-enabled assistant, Spotify could proceed to launch a smart speaker of its own to challenge Apple, Amazon, Alibaba (BABA), and Alphabet’s (GOOGL) Google.

The global market for smart speakers is forecast to hit $2.7 billion this year and grow further to reach $11.8 billion by 2023, according to MarketsandMarkets.


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