Declining iTunes sales highlighted by Morgan Stanley’s Katy Huberty and reported by Fortune appear to underline the need for Apple to move beyond sales of music downloads and into the subscription music business. iTunes sales are down 24 percent year-on-year.

While the slack is being picked up by app sales – a trend previously noted by Asymco’s Horace Dediu – that falling blue line reflects the wider shift in consumer behaviour from purchasing downloads to subscribing to streaming services noted last year by Billboard magazine …

It’s widely assumed that the excellent Beats Music service is one of the reasons behind Apple’s negotiations to acquire the company. While there have been conflicting rumors about whether or not the deal is going ahead, most sources suggest that it is, though possibly for a slightly lower amount than the $3.2B initially indicated.

Spotify CEO Daniel Ek recently said that he had always assumed that Apple would launch a subscription music service.

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