We're Spending Less On iTunes

One of the things that might have hastened the purchase of Beats by Apple is the fact that spending on iTunes is dropping rapidly. According to data supplied by Morgan Stanley, the average user spent $1.90 on iTunes in the first quarter of 2014. That's down from $2.90 from a year ago, and $4.30 from two years ago.

Apple doesn't care about this revenue source declining as much as the fact that it shows that music fans are getting their music from somewhere else, and that may be taking a toll on iPhone sales.

At its core, Apple is a hardware company that makes software to facilitate hardware sales. If the software isn't popular, then the hardware sales suffer. Beats Music may or may not prove to be a wise decision over time, but it does show that Apple is acutely aware of the the ultimate affect of music sales on its bottom line.

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