Apple (AAPL) and Amazon’s (AMZN) shares traded in the red on Wednesday morning as their music streaming rival Spotify (SPOT) confirmed the launch of high-quality lossless music streaming audio on its platform. Apple shares changed hands more than 2% lower at about $228, while Amazon’s stock dipped by 1.85% to around $234 as of 10:36 a.m. EDT.
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Moreover, the fall in Apple’s stock price builds on the failure of the company’s annual September product launch to impress investors. On Tuesday, Apple’s shares fell by 1.48% to $234.35. One top analyst called the event “disappointing”.
Spotify Joins the Lossless Stream
Apple Music, Apple’s streaming platform for audio and video, introduced lossless audio quality in addition to the spatial audio standard, Dolby Atmos (DLB), in 2021. Amazon Music (AMZN) has also been offering a similar audio quality since 2019 and even made streaming in that quality free four years ago.
Spotify, the largest music streaming service provider globally, has been seeking to up its game in this regard for several years. The Swedish streaming giant is now ready, as it announced that the high-fidelity audio quality will be gradually rolled out to all its Premium subscribers in over 50 markets.
Already, subscribers in countries such as the US, UK, Sweden, Denmark, Germany, and Japan now have access to the CD-quality-like audio standard. Spotify noted that users of its app can listen at the quality level via Wi-Fi, cellular, and downloads. However, listening on devices powered by Bluetooth connection will not provide the best listening experience, the company further noted.
Media reports of plans by Spotify to launch a high-fidelity audio feature first made the news in 2021, with the rumor re-emerging in 2023 that the feature will come with a more expensive premium subscription plan. Again, reports appeared earlier this year that a new code in Spotify’s app could indicate that the lossless audio quality was coming.
The announcement of premium audio quality comes more than two weeks after Spotify introduced a new messaging feature to its app. It also trails Apple’s recent partnership with digital radio platform TuneIn to reach the 75 million monthly listeners outside its ecosystem.
Is Spotify a Buy, Sell, or Hold?
Turning to Wall Street, analysts on TipRanks hold a Moderate Buy consensus recommendation on Spotify’s shares. This is based on 19 Buy and seven Hold ratings over the last three months.
The average SPOT price target is $765.40, which implies a 7.08% growth potential from the current level.
