As you are aware, Apple dominated the download music market. However, of late, the listening habits are changing fast. The trend of streaming music is catching up, and the downloads are dropping. The activity happens in ad supported streaming, e.g. YouTube and Spotify free version. But still the revenues growth comes from paid subscription services. At present, Apple makes money from music downloads everyday that far exceeds the revenue the digital music industry makes in a month. This means that rivalling Spotify and Pandora is not a top priority for Apple. However, that does not mean Apple can be complacent about the new trend.

To Apple, music is a complementary product to sell its iPhones. It prevents its customers from using the other devices.

Apple might go in for a free trial service for its streaming service. It may put an act togethter by stitching its disparate parts such as iTunes, Pandora radio service, Beats which has streaming service. The question is how many subscribers will be ready to pay up once the service is priced. The service can be sustainable if a base of 100 million paid subscribers is created. Apple can be rope in its iTune users to contribute to this.