Spotify has had a great impact on the way consumers are able to access a wide range of music at relatively low cost. On the back of Spotify’s success, Apple released its own music streaming service during 2015 in an attempt to further stamp its position within the music industry.

HamiltonHowe’s Chief Investment Officer warns Apple (APPL) investors of the impact that Spotify’s music streaming service will have on Apple’s own Apple Music as Spotify works in preparation of its eagerly anticipated Public Offering.

“Spotify has raised in excess of $1 billion of convertible debt from a number of key investment houses, which goes a long way towards shoring up the company’s finances as it prepares for the inevitable public offering. The terms of the debt repayment structure are very favourable for Spotify, especially when we consider the way in which they are able to utilise the deep pool of cash for acquisitions and marketing purposes.”

Spotify recently announced that it had reached a significant milestone with 30 million paid subscribers on it books. With subscription fee packages starting at $9.99 the company’s cashflow from operations lends for impressive reading.

“The Spotify growth story has been very impressive so far as cashflow continues to rise with every new subscriber. In 2015 alone the company attracted an additional 10 million subscriptions, which is a remarkable achievement when we take into account the release of Apple’s rival streaming service, which has received mixed reviews from sections of it’s loyal fanbase.”

“Apple isn’t used to playing catch up where consumer technologies are concerned, however entering the music streaming scene at this late stage could mean that it has allowed the gap to become too big passing a considerable advantage onto Spotify. With such a stockpile of cash and a core product focus, Spotify’s strategy will become aggressive as the company attempts to maintain its gap ahead of the competition.”