If only price was the only signal people used when buying or renting services.
But that's not the case. And Apple themselves know this as they charge premium prices for the brand alone.
If Apple drops their prices by 30% there's no guarantee that it would "destroy spotify" at all. For one, no one on android would think of switching to apple music anyway, the concept just seems so foreign. Second, Spotify is winning the marketing/cultural battle with their wrapped. It might sound silly but the advertisement feature of Spotify wrapped is worth a lot of money.
So what's more likely to happen if Apple drops the price? Well, I'd say they'd be locked into a PR nightmare everytime they need to raise prices because there's a precedent that the service is cheaper. They wouldn't really gain significant market share against Spotify and they would just end up leaving money on the table.
In these things, price is a component of the decision that is made, it's not really the deciding factor. Not to mention that a significantly lower price also signals "worse quality" to costumers. People might easily go "Spotify costs 3 dollars more because it is worth 3 dollars more". Because people will try to justify higher prices with higher quality even when that's not the case.
But that's not the case. And Apple themselves know this as they charge premium prices for the brand alone.
If Apple drops their prices by 30% there's no guarantee that it would "destroy spotify" at all. For one, no one on android would think of switching to apple music anyway, the concept just seems so foreign. Second, Spotify is winning the marketing/cultural battle with their wrapped. It might sound silly but the advertisement feature of Spotify wrapped is worth a lot of money.
So what's more likely to happen if Apple drops the price? Well, I'd say they'd be locked into a PR nightmare everytime they need to raise prices because there's a precedent that the service is cheaper. They wouldn't really gain significant market share against Spotify and they would just end up leaving money on the table.
In these things, price is a component of the decision that is made, it's not really the deciding factor. Not to mention that a significantly lower price also signals "worse quality" to costumers. People might easily go "Spotify costs 3 dollars more because it is worth 3 dollars more". Because people will try to justify higher prices with higher quality even when that's not the case.