Amazon's Streaming Music; Apple Puts Down Roots In China; Google, Facebook Team In Transpacific Network

| About:, Inc. (AMZN)


Amazon announced its streaming on-demand music plans and pricing for customers. Echo users will pay the least at just $3.99 per month.

Apple is opening another R&D center in China, its second, as it looks to deepen its ties in the country.

Google and Facebook partner with two other companies in a Transpacific cable network effort, as internet use is set to steadily grow going forward.

Amazon's Official Music Offering

Amazon (NASDAQ:AMZN) has officially launched its music streaming service, something that had been rumored just a short while ago. Non-Prime members will have to pay $9.99 a month, while Prime members can either pay $7.99 a month or $79 per year. Those that have the Echo subscription will pay just $3.99 per month if they want the service.

So what's the difference between the Amazon Prime music offering the company has now and its new streaming plans? The original plan, which comes free with a Prime membership, has about 2 million songs. Anyone who has used the service has likely experienced not being able to find certain artists or specific songs to listen to. The new service fixes that, with "tens of million of songs and thousands of hand-curated playlists and personalized stations."

The streaming music space is becoming pretty crowded. There's Spotify (Private:MUSIC), Pandora (NYSE:P), Apple (NASDAQ:AAPL) Music, Google (NASDAQ:GOOGL) (NASDAQ:GOOG) Play, and Amazon. I mean, these are some pretty powerful tech companies we're talking about. Will there be consolidation in the space? While the answer of, "It wouldn't be surprising," may first come to mind, one would think Google/Apple/Amazon would have bought Pandora or Spotify by now if it wanted to.

Instead, the companies have opted to build out their own listening stations for less.

As for Amazon specifically, I don't how many users will be drawn to the service. Perhaps with its Echo pricing model, it will attract users, at just $3.99/month. However, for non-Prime members, the price isn't competitive enough for many to switch, particularly if they love the service they already pay for from another company.

Even the Prime price isn't all that compelling. For instance, if I love my Spotify, I'm not going to change to save $2 to $3 per month.

There's also the free listeners. If the free listeners - for instance, on Prime music - love streaming music so much, why haven't they signed up for a service yet? It's very likely that most will continue to listen for free.

While I don't think it's necessarily a bad move, I don't think this is any sort of needle-mover at Amazon.

In an unrelated note, analysts at Cantor Fitzgerald assigned at $1,000 price target on Amazon.

Apple's Attachment to China Grows

One of Apple's most important markets has been China. Not all that long ago, CEO Tim Cook actually went to China in hopes of keeping his company at peace with the giant country.

It wasn't long after his visit that the company took a $1 billion stake in Didi huxing (Private:DIDI) and agreed to open a $45 million R&D center in Beijing.

But Apple's not finished in China. After Didi Chuxing agreed to a truce of sorts with Uber (Private:UBER), the company also gave a board seat to Apple - something many investors were not expecting.

This shows that Apple plans to be more than a check-writing silent investor. On the surface, it seemed like that's what the relationship would be, but clearly, Apple has other plans and wants to keep working with Didi going forward.

Apple's not stopping there, nor is stopping in Beijing. The company also plans to open another R&D center in Shenzhen. From the company:

"The Shenzhen center, along with the Beijing center, is also aimed at strengthening relationships with local partners and universities as we work to support talent development across the country."

The statement really says it all. Apple very clearly is not happy with its sales slump in China and in order to claw it back, the tech giant is willing to engage the country and its people. Apple wants to deepen its relationship with the people of China. It wants to be a name talked about at the dinner table, so to say, and by providing jobs and working with students, it's getting one step closer. Apple is setting itself up to be a big part of the country's technological push forward.

And it damn well should if it plans on making China one of its biggest markets in the future.

Facebook, Google In On Transpacific Cable Network

The powerful duo of Facebook (NASDAQ:FB) and Google are partnering alongside Pacific Light Data Communications and TE SubCom, a company under TE Connectivity (NYSE:TEL), in an effort to "build the Pacific Light Cable Network (PLCN), a 12,800 km transpacific submarine cable system that will provide the first direct undersea route between Hong Kong and Los Angeles, California (NYSE:USA) with ultra-high capacity transmission."

This will get a little "jargony" but feels necessary to explain what's happening:

"Scheduled for commercial launch in summer of 2018, PLCN will include TE SubCom's C+L technology, a major step forward in available cable transmission capacity that effectively doubles the available bandwidth and capacity per fiber pair over a traditional C-band-only designed system. Once completed, PLCN will be the highest-capacity transpacific route."

Some people seem to think this doesn't matter. That it's just a money-losing endeavor being taken on by some of today's most loved tech investments.

I'm of the belief that it isn't a waste of money. And let me explain why. In the next four years, the world will "gain about 1 billion new internet users and reach 4.1 billion in the next four years."

No longer are we just sending text-based emails back and forth either. We have on demand and live-streaming events, video chats, music, video game streams, YouTube and number of different platforms that take far more power and data then technology from even just a few years ago. As a result, we need a better way to transmit all of that data, particularly with Asia growing so quickly.

Internet traffic is expected to more than double by 2020, according to Cisco (NASDAQ:CSCO). I'm not saying there's pandemonium in the air. Only that as the world's internet-driven world continues to grow and become more interconnected, we will need certain infrastructure in place to keep up.

Facebook and Google are two companies that benefit immensely from a more connected world. Both happen to be banned in the country that this particular network is connecting to, (China). Maybe they're hoping that if they're even granted access, this will be a big play for them. I wouldn't bank on it, but hey, if it happened it would be huge for both companies.

If anything, in regards to this project, investors can look at it as a low risk, high reward potential. But as demand for the internet grows, it's a good hedge for two of the world's most popular sites.

Tech Tidbits

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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